How COVID-19 Affected the Diamond Jewelry Market in 2020
The year 2020 has indeed made a massive impact on our lives.
We can say that the COVID-19 pandemic is probably the worst and the most crucial calamity on global health.
In December 2019, the coronavirus disease outbreak started in Wuhan, Hubei Province, China, and no one thought it would turn into a pandemic that will affect the whole world.
With our current situation, people are either limited in their activities, lost their job or business, and some have even lost their loved ones.
Like most industries, the diamond jewelry industry is also suffering from this health crisis’s consequences.
In this article, we will learn how the COVID-19 affected the diamond jewelry global market sales, how it affected its revenue, and how they are adjusting to the online world.
How COVID-19 Affects the Jewelry Market?
Mining companies and major jewelry stores worldwide have been affected by the COVID-19 pandemic due to financial and social closure.
Major mining companies have reduced their operations in production, causing a significant drop in demand worldwide.
On the other hand, organizers of jewelry fairs have decided to postpone their events to control the virus’s spread.
Gems, including diamonds worth billions of dollars, are stuck at diamond mining companies as very few people want to buy them.
Some reports say that diamond jewelry sales have dropped by 82% during the pandemic’s early days.
That’s when most people are home quarantined, and retail shops weren’t allowed to operate.
In February 2020, Edahn Golan sales were at $2.65 billion, and due to the pandemic, their sales went down to $470 million in April.
Usually, the jewelry business is lowest during April, but this is very unusual for this kind of drop.
The good thing is, there has been an increase in sales in May, and as per the experts, the jewelry business will finally bounce back moving forward.
What Is The Value Of Jewelry During Covid-19?
Diamond prices during the early pandemic went down between 15% to 27%. That is because of the decrease in demand, and diamonds are piling up the stocks. However, in May 2020, it seems that the jewelry market has increased in sales. So expect that the demand and prices will rise again, moving forward.
How Can Businesses Adapt To The Challenges?
Different jewelry store owners have started to make adjustments to be able to operate during this crisis.
They even call it the “New Normal.” At this stage, this is the only option that they have to continue making sales somehow.
- Virtual Selling
Most of them have started to rely on online sales. Since online selling has become the biggest trend since the pandemic began, a lot of business has already shifted to virtual networking.
They took the time to improve and boost their web and social media presence.
For example, by making connections using social media platforms such as Instagram, Pinterest, and Facebook, they now have the opportunity to connect with their clients and future customers.
They began showing it via YouTube videos for their customers to see since they can’t show the stones in person.
- Direct to Consumer Selling
As the jewelry market is somehow going back to normal, jewelers found a new way to sell their products.
They began selling directly to potential customers, which works as they will feel important and valued.
That’s why most experts say that this way of transacting will continue even after the pandemic.
What Are The Challenges For The Jewelry Market During a Pandemic?
Despite the different strategies these jewelers have made, the aftermath of the COVID-19 will still be quite a challenge to them.
Losing a few months of sales has significantly affected their financial standing.
Even when the diamond and jewelry sales are somehow spiking up, it will still be hard for some small jewelry store owners to bounce back even until next year.
It could also be hard for some investors to resell their diamonds since diamonds’ demand has decreased. Or, they may not be able to resell lower than its original price.
At this stage, the jewelry market has faced the worst. It’s already wedding season, and no one has set foot in any jewelry stores. No mass shopping means no sales at all.
Points to Consider
Since there is no clarity about when the vaccine for COVID-19 will be released, our only choice is to wait and stay home.
Despite the pandemic, businesses are still trying to keep afloat. While some have opened their doors to the public, others are setting up online services, Shira Diamonds being one of them.
As much as we want to make the best out of this year, it seems that this crisis may last longer than we expected.
And as long as it exists, the diamond jewelry market will still be affected globally.