While the industry is staring at humongous losses this year, the need of the hour is sustainability in the long run driven by a well-laid-out plan writes Sanjay Kothari, Vice Chairman, KGK Group.

The diamond and jewellery industry welcomed 2019 with an accelerated growth that only lasted in the first leg of the year. The slow pace dipped significantly as 6-10 carat diamond pieces and high-end chunky jewellery, which are widely popular in the middle east, suffered a major downfall. As the businesses lost its profitability, the management of key players duly intervened to combat every curve ball with a full-fledged strategy in place.

Industry was enduring an extreme slowdown prior to the pandemic, the players were aiming to achieve realistic objectives instead of anticipating robust growth in 2020. Before the industry could resurrect to its initial form in 2020, the new wave of COVID-19 hit the world and left businesses across industries in a vulnerable state. A never-seen-before phenomenon, COVID-19 is a highly infectious and contagious disease known to humankind. This led to a complete shutdown of industries and markets in India to cease the spread of Coronavirus. Thus gems and jewellery industry has suffered a colossal blockage in its operations across the globe. While the businesses are still navigating financial challenges, the aftermath of Coronavirus on the gems and jewellery industry seems to be daunting.

The pandemic outbreak has only worsened the feeble state of this industry. Technically, the rough diamond prices from the miners were predominantly high while polish diamond prices in the market were nominal leading to a noticeable gap. Hence, the businessmen were already incurring huge losses in the Asian market. The existing trade war between China & US has further triggered the fallout of the diamond business. In Hong Kong, almost half of 2019 was sacrificed owing to the riots in the city that largely affected the business. As China and Hong Kong contribute to 25-30% in world's consumption of diamonds, the business undoubtedly witnessed a major breakdown. These factors coupled with COVID-19 in the beginning of 2020 has brought the operations to an absolute halt across the globe. The three main hubs of diamond market, China, Europe and USA have been either completely or partially under lockdown owing to the preventive measures undertaken by the government.

As the corona scare has gripped potential buyers and existing clientele, the gems and jewellery industry has lost its shine. As a precautionary measure, the government has encouraged the citizens to postpone wedding functions and only venture out for essential commodities during lockdown. The Indian jewellery market is heavily influenced by weddings, and the wedding shopping has become completely stagnant. The industry further lost its lustre on Gudi Padwa which fell during the lockdown and again a great opportunity to score impressive sales was wiped off.

While the industry is staring at humongous losses this year, the need of the hour is sustainability in the long run driven by a well-laid-out plan.