Despite ongoing challenges escalated by the Covid-19 pandemic, platinum jewellery retailers and manufacturers report a sustained recovery across three of four key markets in the latest ‘Platinum Jewellery Business Review' (PJBR) report for the first quarter of this year.
The strong momentum is also evidenced by a recent consumer survey which highlights continued positive consumer sentiment and strong appetite for precious jewellery that marks special moments in difficult times, Platinum Guild International (PGI), which publishes the report, states.
“The jewellery industry has seen precious jewellery demand return in the first quarter of 2021, but the recovery could slow in some markets as subsequent waves of Covid cloud the outlook.
“Other than accelerated trends within the industry, PGI says that the last year has seen a renewed enthusiasm for platinum and that 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 PGI CEO Huw Daniel.
The PJBR found that Chinese consumer confidence has picked up as the pandemic has been brought under control. It states that this upward sentiment has created a good foundation for the consumption recovery of precious jewellery.
PGI has seen the jewellery category increase sharply in the first quarter of the year, against a low base in the same period affected by Covid-19 last year, with platinum fabrication having increased by 65% year-on-year.
PGI retail partners, meanwhile, reported a 52% growth compared with the same period of 2020, driven by newly launched or refreshed platinum collections, coupled with promotional activities.
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 among the participating stores.
In the US, owing to the decline in Covid cases, vaccination rollouts and government subsidies, the market has continued its strong rebound since the third quarter of 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 US’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 owing to postponed weddings and engagements.
PGI USA also recently announced a new initiative, the Platinum Business Development Grant, to support partners that are committed to make platinum a strategic focus of their business to target future growth.
Japan, which has historically been the strongest market for platinum jewellery, experienced a 5.5% year-on-year decline in platinum jewellery retail sales in the first quarter.
Still, PGI says 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 nonstore channels rose by 15% year-on-year in the first quarter, with both e-commerce and TV shopping expanding the target audience during the home-bound year of Covid-19.
The Indian market, meanwhile, 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 the first quarter.
However, PGI says that as the pandemic regained momentum towards the end of March, the outlook for the second quarter looks uncertain, and that the sustained recovery indicated in the PJBR first quarter 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.