f Jewellery Industry's Pivot to Platinum Aids Recovery After a Disrupted Year in 2020 – Beranda Kaltim
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Jewellery Industry's Pivot to Platinum Aids Recovery After a Disrupted Year in 2020

By focusing on meaningful relationships and significant moments, platinum has quickly bounced back and created a strong platform for continued growth in the post-pandemic era

HONG KONG, May 18, 2021 /PRNewswire/ -- Platinum is one of the first jewellery categories to reverse the downward trend caused by COVID-19, despite being a highly discretionary purchase with a relatively small market share. Today, Platinum Guild International (PGI) released the annual Platinum Jewellery Business Review (PJBR), revealing how jewellery retailers and manufacturers deployed platinum in their recovery efforts, deftly expanding platinum's customer base to increase margins and profitability and return to growth in key global markets.

From left to right: Pt Moment (China), Platinum Evara (India), Platinum Woman (Japan), Le Vian Chocolate Diamonds® branded jewellery (USA)
From left to right: Pt Moment (China), Platinum Evara (India), Platinum Woman (Japan), Le Vian Chocolate Diamonds® branded jewellery (USA)

 

Consumer research throughout 2020 tracked a change in consumer attitudes and behaviour in platinum's four key markets of China, India, Japan and the US. The pandemic led to a re-prioritisation of meaningful relationships and moments. In tandem, jewellery topped consumer wish lists resulting in a willingness to pay a premium for platinum to mark important moments and relationships. Platinum's stature as the metal of meaning enabled the jewellery industry to captivate consumers with a more compelling brand story.

"At PGI, the challenger mindset is central to an approach that has enabled platinum to punch above its weight in a jewellery category dominated by gold and diamonds. From the outset, we approached the pandemic as an opportunity for platinum to be a key driver of the industry's recovery efforts. Platinum's unique story and contribution to industry margins and profitability made it a natural to lead industry recovery as consumers returned to stores," says Huw Daniel, Chief Executive Officer of PGI.

A market-by-market platinum jewellery industry review and outlook

USA

Despite significant disruptions, jewellers were able to benefit from diverted consumer spending, as consumers' shifting priorities found an outlet in jewellery for signifying value and meaning. PGI experienced a significant increase in requests for support from retailers seeking to capitalise on the more accessible platinum price as they pivoted away from white gold. Platinum jewellery retail sales in the US finished the year with an increase of 3.4% year-on-year based on PGI's annual trade survey. While pandemic measures shut down factories and impacted sales of new metal to manufacturers, retailers used this as an opportunity to sell aged inventory, resulting in a net increase in business. 

The jewellery trade fared well with both bridal and diamond fashion jewellery set in platinum performing strongly. This led to the prioritisation of platinum jewellery by partners such as Le Vian, a leading jeweller in the US famous for popularising Chocolate Diamonds ® branded jewellery. Le Vian recently launched a new platinum collection at Jared, a division of Signet Jewelers, in over 130 stores. The Le Vian Platinum Collections have since expanded to 180 additional jewellery stores, as well as being featured in 3,500 trunk shows across the country. As a result, Le Vian's 2020 platinum sales exceeded projections by an impressive 62% and platinum was named the '2021 Metal of the Year' in the highly regarded Le Vian 'Red Carpet Revue Trend Forecast'.

This uptick in growth is expected to continue as more retailers promote platinum in their product offerings and platinum jewellery retail sales are projected to have modest growth for the eighth consecutive year in 2021.

JAPAN

The industry was recovering from the sales tax hike in Q1 but saw significant disruptions from Q2 onwards due to the pandemic and postponed Olympics. However, despite declining consumer sentiment, there has been a generally positive mood among more affluent Japanese consumers, which has benefited high-ticket jewellery, platinum's stronghold, and increased asset-based non-gem-set jewellery. In the world's most mature platinum jewellery market, where platinum has the highest per-capita consumption and share of market, business was relatively sustained with platinum jewellery retail sales down only 10% year-on-year, despite a year of disruption. 

With platinum beloved by the older generation in Japan, PGI and leading industry partners turned their attention to the younger consumer with "Platinum Woman", a new collection-based marketing initiative that positions platinum as the metal that reflects their lives and aspirations. It was the first time Japan's most prestigious competing retailers agreed to partner on a shared sales platform. The programme reached over 10 million of the younger generation of consumers aged 18 to 34, with the collection being carried both on retail partners' e-commerce channels and in 200 physical stores, and will be expanded in 2021.

Platinum jewellery retail sales are likely to have a modest increase over 2021 and PGI will continue to work with retail partners to enhance platinum's position as the "personally meaningful metal of choice" among younger consumers while still engaging affluent older consumers.

CHINA

Despite a lost Q1, from Q2 onwards the platinum jewellery market grew, resulting in a relatively small decline in platinum jewellery fabrication for 2020 of 8% compared to 2019. Major manufacturers prioritised product innovation and developed new designs for collection-based products. Improvements in manufacturing technology made bolder designs possible, which together with process efficiencies and favourable metal pricing made platinum more cost-competitive for gem-set jewellery, and altogether more attractive to the industry. Recovery in platinum jewellery fabrication will continue, albeit at a lower rate in 2021.

PGI retail partner sales declined by 11% year-on-year, and platinum jewellery's growth in the second half was driven by the leading retail chains which made a strategic choice to shift their focus towards the platinum category, together with their continued expansion into lower-tier cities. Jewellers in mainland China approached last year's disruptions as an opportunity for platinum to be a key driver of the industry's recovery efforts. PGI launched 'Reboot' a province-by-province initiative to drive re-stocking of new products accompanied by large scale sales activation. The programme was designed to fast track the distribution of more contemporary designs curated by PGI coupled with omnichannel sales events to increase store traffic and conversion. The programme covered 1,277 retail stores and reached 13 million consumers, delivering positive results with year-on-year sales increasing over 40%.

INDIA

In the market most severely disrupted by extended lockdowns from March to September 2020, the industry only started to gain sales momentum from October. Therefore, PGI retail partner sales saw an overall 36% year-on-year contraction in 2020. Large chain retailers who are prioritised partners for PGI performed better under these challenging conditions than the smaller unorganized players, and PGI strove to maintain platinum's top of mind awareness, empathy and relevance leading up to a full-blown recovery programme in Q4.

Starved of floor traffic, PGI India quickly adapted its existing social and digital media strategy to provide messages of solidarity and initiated the 'Season of Hope' programme to encourage consumers to return to stores. Participating retail partners across 300 cities reported a staggering 33% year-on-year increase in platinum jewellery sales during the promotional period. The programme also donated a relief package through Oxfam to 4,500 families benefitting over 22,500 lives.

During Q4 2020 and Q1 2021, PGI's strategic retail partners posted a healthy recovery of double-digit year-on-year growth. However, as a severe second wave of COVID-19 continues to impact India, consumer demand has stalled, and retailers remain cautious for the immediate term.

Although the pandemic continues its unpredictable course throughout the world, when it comes to jewellery, platinum will remain firmly entrenched at the top of the jewellery metal hierarchy. According to the Platinum Jewellery Business Review 2021, the success of platinum in the jewellery industry is a result of the industry's long-standing collective efforts to differentiate it as the metal most associated with love, celebratory moments and meaningful gifting.

PGI predicts platinum has a K-shaped outlook for 2021. Active players who invest now will be able to gain market share relatively inexpensively while passive players who rely on the market to lead recovery may be in for a challenging post-COVID environment.

About PJBR

The Platinum Jewellery Business Review is an annual report published by PGI based on surveys conducted among PGI's manufacturing and retail partners, together with industry surveys conducted by independent sources, specifically analysing fabrication ounce demand, retail sales, and trade sentiment in the four major platinum jewellery markets of India, China, the US and Japan.

About Platinum Guild International:

Platinum Guild International is a worldwide marketing organisation dedicated to creating, expanding and strengthening consumer and trade markets for platinum jewellery. Through various programs both to consumers and in collaboration with jewellery retailers and manufacturers, PGI creates consumer ounce demand by identifying and developing platinum jewellery opportunities with its partners. Jewellery development has a strong track record in delivering results. Since PGI was founded in 1975, platinum jewellery has contributed over 80 million ounces of demand. PGI is headquartered in Hong Kong and has offices in China, India, Japan and the US.

Website: www.platinumguild.com    
LinkedIn: https://www.linkedin.com/company/platinum-guild-international-2901/

For more media enquiries, please contact Gusto Luxe:
Daniella Lopez/ daniella.lopez@gusto-luxe.com
Alicia Yung/ alicia.yung@gusto-luxe.com

 



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