At the end of three quarters of 2021, the turnover of the Russian jewelry market reached 205 billion rubles, which is 35% higher than last year’s result and 26% higher than the figure for 2019. The reason is the increase in average prices for products due to the growth of exchange quotations for gold. Market participants expect positive dynamics to continue until the end of the year, hoping that the effect of deferred demand from the upcoming store closings will coincide with the pre-New Year rush.
Jewelry sales in Russia in January-September 2021 increased by 35%, to 205 billion rubles, year-on-year. Compared to January-September 2019, the market turnover increased by 26%. Such data were provided to Kommersant by the Sokolov analytical center. In physical terms, jewelry sales in the first nine months of 2021 increased by 10% yoy, but are 7% behind levels two years ago. As explained in Sokolov, the growth of the market in money is due to an increase in average prices by 20% year-on-year and by 35% against January-September 2019 against the backdrop of an increase in exchange quotations for gold to historic highs. According to analysts’ estimates, 60% of the revenue of jewelry chains comes from gold products, 35% from silver. Sokolov adds that against the background of a decline in the exchange value of gold, prices in jewelry retail have already slowed down to 10-15% yoy.
The general director of the 585 * Zolotoy chain, Alexei Feliksov, says that in general, the demand for jewelry has stabilized after last year’s restrictions due to COVID-19, currency surges and rising stock prices. But, according to him, online consumer traffic remains 35% below the 2019 level, and a 20% increase in the average check does not compensate for this dynamics. Miuz Diamonds says sales for the first half of the year are up 110% in monetary terms yoy and 40% over the 2019 level.
With the introduction of non-working days in Russia from October 30 to November 7, due to the worsening situation with COVID-19, the work of jewelry stores, like other non-food retail, should stop. In Moscow, restrictions are in effect from October 28 to November 7, while online shopping is allowed for non-food stores. Artem Sokolov, Managing Partner of Sokolov, expects that as a result, the traditional peak in demand before the New Year holidays this year may coincide with the deferred demand that has developed during the period of closed stores. And the share of online in jewelry retail against this background can grow from the current 15% to 17-20%, he predicts. According to Sokolov’s forecasts, by the end of the year, the turnover of the entire market may grow by 10%, to 270 billion rubles.
The general director of the Russian Jewelers Guild, Eduard Utkin, says that the effect of deferred demand will depend on the duration of store closings. For example, the market that is idle for several days is unlikely to be noticed, and last year retail in a number of regions did not work for two or four months, he notes. According to Mr. Utkin, the growth of the online share will primarily support the business of jewelry manufacturers and large chains with a wide range of products.
Infoline-Analytica CEO Mikhail Burmistrov agrees that jewelry retail can again count on an influx of buyers and an increase in their costs. According to him, the Russians, apparently, have not yet spent all the funds saved in 2020. And the costs of tourist trips will be less than they could have been, since, despite open borders with a number of countries, prices for air tickets and hotels in key destinations are growing, and the need to submit QR codes does not suit some potential travelers, the expert notes. In addition, Mr. Burmistrov continues, a number of durable goods, such as cars or expensive smartphones, remain inaccessible due to production and logistics constraints.
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