Worldwide marketing organisation Platinum Guild International’s (PGI’s) Insight August 2020 report indicates that, during the Covid-19 pandemic, affluent buyers have been less reluctant to decrease jewellery buying and that regions most impacted by Covid-19 have despondent views on buying jewellery.
The PGI states that while the long-term effects of the ongoing Covid-19 crisis on the precious metal jewellery industry will depend on a number of factors, it is possible to envisage three overall scenarios – a fast and conclusive V-shaped recovery, a slower but conclusive U-shaped recovery and a slow, unsteady L-shaped recovery.
To gain insight on potential trajectories, PGI and consumer segmentation organisation the Sinus Institute designed an international flash survey among jewellery buyers. In late April and May, the survey was used to interview over 1 000 jewellery buyers and wearers in each of platinum jewellery’s four key markets – China, Japan, India and the US, to understand areas of insight.
This included information about jewellery-specific and general consumer attitudes and behaviours under the current Covid-19 crisis and in the near future, as well as the impact on everyday life and relationships and expectations for economic recovery.
According to PGI, precious jewellery buyers tend to possess the economic resources to maintain a higher standard of living, even during an economic slowdown.
Therefore, PGI states that it is unsurprising that nearly all consumers in the top four markets surveyed believe the impact of Covid-19 will be moderately less severe on their personal lives compared with the financial strain on their country overall.
According to PGI, Covid-19 has resulted in an important and universally positive impact by encouraging consumers to re-evaluate their life in a positive way and focus more on family and friends and other personal relationships.
This was a key finding in all four countries, with 93% of Chinese, 87% of Indians, 83% of Americans and 82% of Japanese reporting a re-evaluation of their personal lives in a positive way as one of the key responses to the pandemic crisis.
A secondary result found by the report is a renewed desire to check up on friends and family with whom they had not been in regular contact before, led by India (85%).
In keeping with their overall optimism relative to the other three markets, the report points to Chinese jewellery buyers tending to look for the “silver lining” in the Covid-19 crisis. In this regard, the report reveals that 84% choose to dress up and look their best even during social isolation.
PGI says this suggests a high degree of self-motivation in Chinese consumers’ “style personas”.
PGI states that the jewellery industry could take advantage of this, inviting Chinese consumers to reinforce personal relationships with precious objects and beloved brands, driven by self-appreciation, rather than merely the desire for display.
Despite an overall negative impact on personal finances and spending perceived by consumers, there will also likely be increased spending as soon as the markets safely reopen, as the survey results also indicate some consumers in all four markets are looking forward to spending money that was saved during the pandemic period, especially in India (67%).
Looking at the reasons why consumers are willing to spend more after the Covid-19 crisis, the survey shows a higher willingness by consumers to purchase precious jewellery for themselves and as a gift for loved ones after the pandemic.
China represents the most promising market for near-term jewellery sales, according to PGI. Over 80% of respondents in China intend to purchase jewellery both for themselves and as gifts after Covid-19, which is much higher than the levels in the other three markets.
In India, 69% of consumers surveyed are willing to buy precious jewellery for themselves post Covid-19, considerably higher than those willing to buy for gifting (59%).
In the US and Japan, meanwhile, consumers appear more willing to spend on precious jewellery as a gift post-crisis than for themselves.
Looking ahead, PGI posits that jewellery pieces that are personally meaningful and will maintain value long term are the key drivers among consumers who intend to spend more than usual on jewellery for themselves after the crisis ends in all four markets.
The report finds that personal meaning is the most important reason and ranks notably higher than the other two reasons in the US and Japan, whereas maintaining value is slightly more important in emerging markets, although personally meaningful also ranks high in India and China.
Where consumers indicate they intend to spend more on buying jewellery as a gift post-Covid-19, personal meaning is the most crucial driver in all four markets.
Since the outbreak of the pandemic, consumers in many markets were largely shut-in at home as a result of government measures to control the spread of Covid-19, thereby leading to shopping in physical stores decreasing significantly in all countries.
Consequently, PGI states that consumers in the US, China and India all reported an intention to increase their online jewellery purchases during Covid-19, compared with before the pandemic crisis, with China leading the largest jump of 18%.
This is also reflected in online sales data from two major e-commerce platforms in China – Tmall and JD.com – during the first quarter of the year, when precious jewellery sales jumped by 71% in value compared to the first quarter of 2019, and 29% in pieces during the same period. This is the result of consumers still being willing to spend on jewellery even though they were not able to shop in stores.