Platinum Jewellery Sales Continue Strong Rebound
Credit: Chow Tai Fook's G&W collection (China)
(11 June 2021, Hong Kong) – Despite ongoing challenges escalated by the pandemic, platinum jewellery retailers and manufacturers report a sustained recovery across three of four key markets in the latest Platinum Jewellery Business Review (PJBR) Q1 2021 report by Platinum Guild International (PGI). The strong momentum is also evidenced by a recent consumer survey which highlights continued positive consumer sentiment and strong appetite for precious jewellery that mark special moments in difficult times. For the full PJBR Q1 report, please visit: Platinum Jewellery Business Review Q1 2021.
“The jewellery industry has seen precious jewellery demand return in the first quarter of 2021, but the recovery couldslow in some markets as subsequent waves of COVID cloud the outlook. Other than accelerated trends within the industry, what we’ve seen in the last year is a renewed enthusiasm for platinum. Jewellers are increasingly engaging with this precious metal, which has been effectively marketed as a metal of meaning and become important as consumers look for ways to symbolise and mark occasions in restricted and unprecedented times,” says Huw Daniel,Chief Executive Officer of PGI.
A market-by-market platinum jewellery industry review
Chinese consumers’ confidence has picked up as the pandemic has been brought under control. This upward sentiment has created a good foundation for the consumption recovery of precious jewellery. PGI has seen the jewellery category increase sharply in Q1 2021, against a low base in the same period affected by COVID-19 last year, with platinum fabrication increasing by 65% year-on-year.
PGI retail partners reported a 52% growth compared to the same period of 2020, driven by newly launched or refreshed platinum collections, coupled with promotional activities. For instance, PGI collaborated on the addition of futuristically styled sub-collections for Chow Tai Fook’s refreshed “G&W” collection, resulting in 103 SKUs of products through 3,500+ stores targeting tier two and three cities. During Chinese New Year, PGI rallied 33 small-to-medium retailers with a combined retail footprint of 325 doors to host promotional activities for platinum. With PGI supplying customised promotional mechanisms and sales incentives, retailers were encouraged to stock up on their platinum inventory. Good crowd turnout at malls and tremendous efforts from retailers resulted in significant increases, both in sales volume and value amongst the participating stores.
Due to the decline in COVID cases, vaccination rollouts and government subsidies, the US market has continued its strong rebound since Q3 2020. Success has been further attributed to retail partners’ engagement with platinum and PGI’s efforts at enhancing platinum’s position with diamond jewellery, a dominant category in the US market.
Platinum jewellery sales of PGI USA’s strategic partners experienced robust year-on-year growth of 11%. This increase is mainly attributed to growth in gemstone fashion jewellery and strong demand for bridal jewellery due to postponed weddings and engagements.
PGI USA also recently announced a new initiative “Platinum Business Development Grant” to support partners that are committed to make platinum a strategic focus of their business to target future growth.
Japan, historically the strongest market for platinum jewellery, experienced a 5.5% year-on-year decline in platinum jewellery retail sales in Q1. Still, platinum is regarded as the best performing white metal used for precious jewellery, which can be attributed to sales of bridal and asset-based jewellery, especially via non-store sales channels. Platinum jewellery sales from non-store channels rose by 15% year-on-year in Q1, with both E-commerce and TV shopping expanding the target audience during the home-bound year of COVID-19.
The Indian market began the year on a positive note following a five-month decline in the number of new cases. Leveraging on festivals and the wedding season, PGI partners saw success with a “Platinum Days of Love” campaign alongside an in-store activation programme, “Month of Love”, which drove conversions to platinum from gold and diamonds. In fact, PGI strategic retail partners with 642 stores reported 17% year-on-year growth in platinum sales in Q1. However, as the pandemic regained momentum towards the end of March, the outlook for Q2 looks uncertain.
The sustained recovery indicated in the PJBR Q1 report reflects an overall positive momentum across key markets, buoyed by pickup of consumer interest and trade confidence, but future growth could be hampered by surging coronavirus cases in some markets and the returned competition of spending on other categories.