GIT Information Center

Gem and Jewelry Business Transformation for the Next Normal

Apr 1, 2022
633 views
0 share

            Unraveling Covid-19 pandemic has prompted several nations to relax their border controls and start to allow foreigners’ entry. This has prompted numerous business sectors to resume their businesses. Entrepreneurs have accelerated adaptations during the pandemic by exploring new trade channels and modifying company strategy to take advantage of opportunities presented by digital technology. As people’ perspectives and way of living have changed after the pandemic, the technologies have increasingly played a vital role in society and lifestyles. Entrepreneurs have opened up to new digital service technologies as well as online platforms in order to fulfill consumer demand for convenience, focus on sanitation safety, and reduce environmental impacts. Such movement has brought about the Next Normal living trends, which began to expand widely and become influential to future life and economy.

From New Normal to Next Normal

            “Next Normal” is a new way of living which will emerge after the pandemic is subdued. It is expected that new technology or innovations would be introduced to effect improvements in practically all enterprises.  Main trends which will incite changes in gem and jewelry business are as follows:-

            Stay-at-Home Economy

            The grave Covid-19 pandemic has forced people to spend more time at home. They worked, attended meetings, and shopped online more. These activities have been conveniently done through online platforms. This tendency has developed an economic model called Stay-at-Home Economy, which included meetings via applications, e-commerce business, and shopping technologies through virtual reality. As a result, the e-commerce industry has been booming significantly since 2020. According to Statista, in 2020, worldwide e-commerce business value reached USD 4.28 trillion, a 28% jump from the previous year. As for Thailand, data from KKP Research reveals that e-commerce market value was around USD 9 billion, an 80% surge compared to that of 2019.

            Touchless Society

            The Covid-19 outbreak has led people to perceive that touching could increase infection risk. Way of living in the Next Normal era will focus mainly on safety and sanitation. Thus, technologies have been developed to reduce touching, for example, touchless retailing in retail businesses which reduces direct touch between buyers and sellers; cashless payment and e-payment; a non-contact delivery option which deliveries packages by putting them on a container or at a location pre-specified by customers; and business space design concept enabling touchless services through voice recognition or augmented reality (AR). They not only make life easier for users, but they also keep infections at bay.  

Changes in Gem and Jewelry Business

            Boosting Sales Through E-commerce Channels

            Lockdown restrictions, social distancing, and public health protection guidelines compelled the jewelry business to migrate to digital world after consumers have progressively shifted to buy products online. According to McKinsey & Co. has assessed that worldwide jewelry industry will grow at 3-4% rate annually from 2021 to 2025, with retail value of around USD 340-360 billion. Rising demand will come from younger generations as well as domestic markets since travel restrictions will still in effect. The firm has also anticipated that by 2025 online jewelry trade value will account for 21% of worldwide jewelry trade value. Meanwhile, according to a research study of Research and Markets states that worldwide online jewelry trade market hit USD 21,500 million in 2020. It is estimated to reach USD 58.9 billion by 2027 with an average annual growth rate of around 15.5% from 2020 to 2027.

            Furthermore, a McKinsey & Co. survey of European customers’ jewelry buying during the pandemic conducted in the first quarter of 2021 discovered that around 48% of survey respondents in the UK, Germany, Italy, Spain, and France purchased jewelry online since the pandemic began. After the pandamic, 17% stated that they would continue shopping online. The majority of buyers intend to continue their behaviors in digital usage, which include engaging in more online shopping and using technology integrated tools in jewelry shopping.

            Augmented reality software technology or AR has increasingly become more important in gem and jewelry industry. The technology helps customers to design their jewelry by choosing gemstones, metals for settings, and other desirable components before converting a design into a 3D image using AR. The image is, then, sent to a 3D printer at a jewelry shop to instantly produce a wax model or sent to a company’s factory to produce a finished jewelry. According to Statista, there will be 2,400 AR users through mobile phones by 2023. Therefore, customized jewelry and digital channels for customer communication have cut down a gap between online selling platforms and brick-and-mortar shops. Furthermore, online payment has been gaining more share in the market during the pandemic. It will remain significant in the new way of living as people have become more confident in e-wallet system and increasingly shopped online. 


Using AR technology in jewelry business

Source: https://jewellerynet.com


            Traditional stores, on the other hand, are still significant. Though online sales have been growing and people prefer to look for online information before buying a product, most of the consumers still like to buy jewelry at brick-and-mortar shops. This is because they realize importance of seeing and experiencing a jewelry piece in person. With the shopping style, they can also get personal consultation and other customized services. Meanwhile, a product quality certification, guarantees, reviews, free product delivery and return services, an opportunity to try on a jewelry piece before paying, and discounts or additional offers can effectively boost online retail sales for business operators.

            Valuing New Things

            After the pandemic, consumers’ brand loyalty has changed as well. According to a report of McKinsey& Co., plenty options available on online platforms have prompted buyers to extensively explore different brands. Despite holding quality and value as key shopping criteria, customers, particularly millennials and Gen Z, have increasingly focused on value of different aspects. They concentrate on brands that adhere to the same values, which usually include those relating to sustainability, being responsible to society and environment, and good governance.

            According to a survey of Bain & Co., 60 – 70% of young consumers in China, India, and the US will consider sustainability while purchasingfor diamond jewelry. Social impacts are the primary issues concerning sustainability which consumers in the US take into consideration. Consumers in China and India primarily prioritize environmental conservation, conflict-free supply chains, and low carbon footprint while purchasing jewelry.

            Changing Jewelry Styles

            Covid-19 crisis has greatly influenced jewelry design trends. Digital communication has boosted demand for jewelry products suitable for online meetings such as stud earrings, hoop earrings, and short dangle earrings, brooches, chockers, and pendants.


Platinum jewelry

Source: https://jewellerynet.com


            Furthermore, jewelry has evolved into a means for expressing one’s personality.  Many buyers have searched for jewelry which represents characters and adjustable according to preferences. New shapes, designs, and materials have been influential in jewelry collections. Asymmetrical gemstone cutting, flawed or dull gemstones with uniqueness reflecting buyers’ personalities, and jewelry focusing on diversified usage enjoy rising demand from women who buy jewelry for themselves without waiting for special occasions and festivals. 

Thai Business Transformation in the Next Normal Era

            The pandemic has urged Thai gem and jewelry business sectors to revisit their operational process. They have shifted increasingly toward digital platforms, e-commerce and social media. Thus, new business models which are in line with the Next Normal trend have emerged. Jewelry online trading has been flourishing through marketing strategy focusing on customers’ access to products from various channels or Omni Channel. Small and large Thai entrepreneurs have shifted to online marketing through social media platforms. Furthermore, the rising trend of livestreaming is another channel boosting jewelry sales by presenting products and special price promotions to reach younger generations, notably millennials and Gen Z.

            Jewelry Business

            Ten Fingers Factory & Design is a jewelry manufacturing company of 40 years. Apart from manufacturing jewelry for different brands, Ms. Khajee Wongpanich, the second generation of the company, has expanded the company by building a jewelry brand called Mirror Mirror. The brand has altered its strategy toward online marketing as well as establishing a network of young entrepreneurs from different brands to cooperate in marketing via livestreaming on Facebook. Meanwhile, the brand also concentrates on being responsible to society and environment, remodeling business toward sustainability to meet demand of younger consumers to conform with save-the-planet trends. Consequently, the brand has created jewelry from upcycling to add value to used materials. The attempt resulted in a sustainable jewelry collection, which won the Design Excellence Award (DEmark) 2021, which was awarded by the Department of International Trade Promotion, Ministry of Commerce. Moreover, it has also pursued opportunities to enter China market to expand jewelry trade. The brand has participated in trade fairs and fashion shows, for example, the recent Shanghai Fashion Week in October 2021. In addition, it has been seeking business partners for product placing through showrooms in Shanghai.

            Colored Stone Business

            Regarding colored stone business sector, according to an interview of Mr. Adisak Thawornwiriyanont, the president of Chanthaburi Gem and Jewelry Traders Association, overall colored stone businesses witnessed constant trading activities. Although foreign buyers were unable to travel to Thailand, Chinese and Indian buyers’ demand for premium rubies and sapphires was relatively high. Thus, business operators sent detailed images of products to Chinese buyers for their consideration. Following the placement of orders, products were delivered to Hong Kong before being transferred to Chinaor were directly exported to China. However, as imports of rough stones have declined lately, especially those of rubies and sapphires (despite ruby purchasing through gemstone auctions). Therefore, sellers were unable to find premium quality products as demanded by buyers, for example, rubies were not of pigeon’s blood color. As a result, Thai gemstone traders had to sell gemstones at moderate prices. 

        Gold and Gold Jewelry Business

            Gold and gold jewelry businesses have employed digital technologies to elevate service channels to enhance effectiveness, speed, and concentration on trade safety. Mae Thong Suk is among the businesses. Mr. Natthapong Hiranyasiri, MTS Gold’s chief executive, said during an interview on business strategy adjustment by developing trade innovations for gold products—gold bullions and gold ornaments. Currently, the company has utilized gold blockchain to connect with e-Wallet mobile application of Krungthai Bank and launch Krungthai Gold Wallet to broaden capacities and channels for individuals who are interested in trading 99.99% gold at global market price per ounce in US dollar through real-time online channels. The service has attracted over 10,000 investors during the first month of its launch. Moreover, gold saving service known as “Mae Thong Suk Aom Thong” also uses the largest gold blockchain in Thailand. 

            Transitioning from the New Normal to the Next Normal is progressively bringing new digital technologies and innovations as well as awareness regarding sustainable development into everyone’s life. Entrepreneurs should adapt by raising digital skills, understanding digital transformation, mastering online marketing to expand trading channels in time with consumers’ dynamic behaviors, and communicating with customers to create positive experiences and reach target groups more effectively. 

References


1. McKinsey & Company. 2021. State of Fashion: Watches and Jewellery. [Online]. Available at: https://www.mckinsey.com/industries/retail/our-insights/state-of-fashion-watches-and-jewellery. (Retrieved October 14, 2021).
2. CIBJO. 2021. Crisis and Opportunity: An Industry Transformed. [Online]. Available at: https://www.cibjo.org/congress2021/.
3. Retail Insider. 2020. How COVID-19 Has Impacted the Jewelry Industry. [Online]. Available at: https://retail-insider.com/articles/2020/10/how-covid-19-has-impacted-the-jewelry-industry/.
4. International Gem Society. 2021. State of Digital Transformation Survey Report: How the Impact of COVID-19 is Changing the Retail Jewelry Landscape. [Online]. Available at: https://www.gemsociety.org/
article/how-covid-is-changing-the-retail-jewelry-landscape-survey/.
5. JNA. 2021. Jewellery retail in the time of Covid-19. [Online]. Available at: https://news.jewellerynet.com/en/jnanews/features/24253.
6. Research and Markets. 2021. Global Online Jewelry Market to Reach $58.9 Billion by 2027. [Online]. Available at: https://www.researchandmarkets.com/reports/5140217/online-jewelry-global-market-trajectory-and?utm_source=CI&utm_medium=PressRelease&utm_code=98n9st&utm_campaign=1472633+-+%2421.5+Billion+Worldwide+Online+Jewelry+Industry+to+2027+-+Impact+of+COVID-19+on+the+Market&utm_exec=jamu273prd.
7. ธนาคารแห่งประเทศไทย. 2021. The Next Normal ส่องเทรนด์ "ความปกติถัดไป" หลังโควิด 19. [ออนไลน์]. แหล่งที่มา: https://www.bot.or.th/Thai/BOTMagazine/Pages/256306GlobalTrend.aspx.
8. Missiontothemoon. 2021. ก้าวผ่านจาก New Normal สู่ “Next Normal” ด้วย 4 เทรนด์หลักหลังยุคโควิด-19. [ออนไลน์]. แหล่งที่มา: https://missiontothemoon.co/softskill-new-normal-to-next-normal/.
9. DEPA. 2021. Digital Transformation จาก New Normal สู่ Next Normal. [ออนไลน์]. แหล่งที่มา: https://www.depa.or.th/th/article-view/digital-transformation-new-normal-next-normal.

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GIT Information Center

Gem and Jewelry Business Transformation for the Next Normal

Apr 1, 2022
633 views
0 share

            Unraveling Covid-19 pandemic has prompted several nations to relax their border controls and start to allow foreigners’ entry. This has prompted numerous business sectors to resume their businesses. Entrepreneurs have accelerated adaptations during the pandemic by exploring new trade channels and modifying company strategy to take advantage of opportunities presented by digital technology. As people’ perspectives and way of living have changed after the pandemic, the technologies have increasingly played a vital role in society and lifestyles. Entrepreneurs have opened up to new digital service technologies as well as online platforms in order to fulfill consumer demand for convenience, focus on sanitation safety, and reduce environmental impacts. Such movement has brought about the Next Normal living trends, which began to expand widely and become influential to future life and economy.

From New Normal to Next Normal

            “Next Normal” is a new way of living which will emerge after the pandemic is subdued. It is expected that new technology or innovations would be introduced to effect improvements in practically all enterprises.  Main trends which will incite changes in gem and jewelry business are as follows:-

            Stay-at-Home Economy

            The grave Covid-19 pandemic has forced people to spend more time at home. They worked, attended meetings, and shopped online more. These activities have been conveniently done through online platforms. This tendency has developed an economic model called Stay-at-Home Economy, which included meetings via applications, e-commerce business, and shopping technologies through virtual reality. As a result, the e-commerce industry has been booming significantly since 2020. According to Statista, in 2020, worldwide e-commerce business value reached USD 4.28 trillion, a 28% jump from the previous year. As for Thailand, data from KKP Research reveals that e-commerce market value was around USD 9 billion, an 80% surge compared to that of 2019.

            Touchless Society

            The Covid-19 outbreak has led people to perceive that touching could increase infection risk. Way of living in the Next Normal era will focus mainly on safety and sanitation. Thus, technologies have been developed to reduce touching, for example, touchless retailing in retail businesses which reduces direct touch between buyers and sellers; cashless payment and e-payment; a non-contact delivery option which deliveries packages by putting them on a container or at a location pre-specified by customers; and business space design concept enabling touchless services through voice recognition or augmented reality (AR). They not only make life easier for users, but they also keep infections at bay.  

Changes in Gem and Jewelry Business

            Boosting Sales Through E-commerce Channels

            Lockdown restrictions, social distancing, and public health protection guidelines compelled the jewelry business to migrate to digital world after consumers have progressively shifted to buy products online. According to McKinsey & Co. has assessed that worldwide jewelry industry will grow at 3-4% rate annually from 2021 to 2025, with retail value of around USD 340-360 billion. Rising demand will come from younger generations as well as domestic markets since travel restrictions will still in effect. The firm has also anticipated that by 2025 online jewelry trade value will account for 21% of worldwide jewelry trade value. Meanwhile, according to a research study of Research and Markets states that worldwide online jewelry trade market hit USD 21,500 million in 2020. It is estimated to reach USD 58.9 billion by 2027 with an average annual growth rate of around 15.5% from 2020 to 2027.

            Furthermore, a McKinsey & Co. survey of European customers’ jewelry buying during the pandemic conducted in the first quarter of 2021 discovered that around 48% of survey respondents in the UK, Germany, Italy, Spain, and France purchased jewelry online since the pandemic began. After the pandamic, 17% stated that they would continue shopping online. The majority of buyers intend to continue their behaviors in digital usage, which include engaging in more online shopping and using technology integrated tools in jewelry shopping.

            Augmented reality software technology or AR has increasingly become more important in gem and jewelry industry. The technology helps customers to design their jewelry by choosing gemstones, metals for settings, and other desirable components before converting a design into a 3D image using AR. The image is, then, sent to a 3D printer at a jewelry shop to instantly produce a wax model or sent to a company’s factory to produce a finished jewelry. According to Statista, there will be 2,400 AR users through mobile phones by 2023. Therefore, customized jewelry and digital channels for customer communication have cut down a gap between online selling platforms and brick-and-mortar shops. Furthermore, online payment has been gaining more share in the market during the pandemic. It will remain significant in the new way of living as people have become more confident in e-wallet system and increasingly shopped online. 


Using AR technology in jewelry business

Source: https://jewellerynet.com


            Traditional stores, on the other hand, are still significant. Though online sales have been growing and people prefer to look for online information before buying a product, most of the consumers still like to buy jewelry at brick-and-mortar shops. This is because they realize importance of seeing and experiencing a jewelry piece in person. With the shopping style, they can also get personal consultation and other customized services. Meanwhile, a product quality certification, guarantees, reviews, free product delivery and return services, an opportunity to try on a jewelry piece before paying, and discounts or additional offers can effectively boost online retail sales for business operators.

            Valuing New Things

            After the pandemic, consumers’ brand loyalty has changed as well. According to a report of McKinsey& Co., plenty options available on online platforms have prompted buyers to extensively explore different brands. Despite holding quality and value as key shopping criteria, customers, particularly millennials and Gen Z, have increasingly focused on value of different aspects. They concentrate on brands that adhere to the same values, which usually include those relating to sustainability, being responsible to society and environment, and good governance.

            According to a survey of Bain & Co., 60 – 70% of young consumers in China, India, and the US will consider sustainability while purchasingfor diamond jewelry. Social impacts are the primary issues concerning sustainability which consumers in the US take into consideration. Consumers in China and India primarily prioritize environmental conservation, conflict-free supply chains, and low carbon footprint while purchasing jewelry.

            Changing Jewelry Styles

            Covid-19 crisis has greatly influenced jewelry design trends. Digital communication has boosted demand for jewelry products suitable for online meetings such as stud earrings, hoop earrings, and short dangle earrings, brooches, chockers, and pendants.


Platinum jewelry

Source: https://jewellerynet.com


            Furthermore, jewelry has evolved into a means for expressing one’s personality.  Many buyers have searched for jewelry which represents characters and adjustable according to preferences. New shapes, designs, and materials have been influential in jewelry collections. Asymmetrical gemstone cutting, flawed or dull gemstones with uniqueness reflecting buyers’ personalities, and jewelry focusing on diversified usage enjoy rising demand from women who buy jewelry for themselves without waiting for special occasions and festivals. 

Thai Business Transformation in the Next Normal Era

            The pandemic has urged Thai gem and jewelry business sectors to revisit their operational process. They have shifted increasingly toward digital platforms, e-commerce and social media. Thus, new business models which are in line with the Next Normal trend have emerged. Jewelry online trading has been flourishing through marketing strategy focusing on customers’ access to products from various channels or Omni Channel. Small and large Thai entrepreneurs have shifted to online marketing through social media platforms. Furthermore, the rising trend of livestreaming is another channel boosting jewelry sales by presenting products and special price promotions to reach younger generations, notably millennials and Gen Z.

            Jewelry Business

            Ten Fingers Factory & Design is a jewelry manufacturing company of 40 years. Apart from manufacturing jewelry for different brands, Ms. Khajee Wongpanich, the second generation of the company, has expanded the company by building a jewelry brand called Mirror Mirror. The brand has altered its strategy toward online marketing as well as establishing a network of young entrepreneurs from different brands to cooperate in marketing via livestreaming on Facebook. Meanwhile, the brand also concentrates on being responsible to society and environment, remodeling business toward sustainability to meet demand of younger consumers to conform with save-the-planet trends. Consequently, the brand has created jewelry from upcycling to add value to used materials. The attempt resulted in a sustainable jewelry collection, which won the Design Excellence Award (DEmark) 2021, which was awarded by the Department of International Trade Promotion, Ministry of Commerce. Moreover, it has also pursued opportunities to enter China market to expand jewelry trade. The brand has participated in trade fairs and fashion shows, for example, the recent Shanghai Fashion Week in October 2021. In addition, it has been seeking business partners for product placing through showrooms in Shanghai.

            Colored Stone Business

            Regarding colored stone business sector, according to an interview of Mr. Adisak Thawornwiriyanont, the president of Chanthaburi Gem and Jewelry Traders Association, overall colored stone businesses witnessed constant trading activities. Although foreign buyers were unable to travel to Thailand, Chinese and Indian buyers’ demand for premium rubies and sapphires was relatively high. Thus, business operators sent detailed images of products to Chinese buyers for their consideration. Following the placement of orders, products were delivered to Hong Kong before being transferred to Chinaor were directly exported to China. However, as imports of rough stones have declined lately, especially those of rubies and sapphires (despite ruby purchasing through gemstone auctions). Therefore, sellers were unable to find premium quality products as demanded by buyers, for example, rubies were not of pigeon’s blood color. As a result, Thai gemstone traders had to sell gemstones at moderate prices. 

        Gold and Gold Jewelry Business

            Gold and gold jewelry businesses have employed digital technologies to elevate service channels to enhance effectiveness, speed, and concentration on trade safety. Mae Thong Suk is among the businesses. Mr. Natthapong Hiranyasiri, MTS Gold’s chief executive, said during an interview on business strategy adjustment by developing trade innovations for gold products—gold bullions and gold ornaments. Currently, the company has utilized gold blockchain to connect with e-Wallet mobile application of Krungthai Bank and launch Krungthai Gold Wallet to broaden capacities and channels for individuals who are interested in trading 99.99% gold at global market price per ounce in US dollar through real-time online channels. The service has attracted over 10,000 investors during the first month of its launch. Moreover, gold saving service known as “Mae Thong Suk Aom Thong” also uses the largest gold blockchain in Thailand. 

            Transitioning from the New Normal to the Next Normal is progressively bringing new digital technologies and innovations as well as awareness regarding sustainable development into everyone’s life. Entrepreneurs should adapt by raising digital skills, understanding digital transformation, mastering online marketing to expand trading channels in time with consumers’ dynamic behaviors, and communicating with customers to create positive experiences and reach target groups more effectively. 

References


1. McKinsey & Company. 2021. State of Fashion: Watches and Jewellery. [Online]. Available at: https://www.mckinsey.com/industries/retail/our-insights/state-of-fashion-watches-and-jewellery. (Retrieved October 14, 2021).
2. CIBJO. 2021. Crisis and Opportunity: An Industry Transformed. [Online]. Available at: https://www.cibjo.org/congress2021/.
3. Retail Insider. 2020. How COVID-19 Has Impacted the Jewelry Industry. [Online]. Available at: https://retail-insider.com/articles/2020/10/how-covid-19-has-impacted-the-jewelry-industry/.
4. International Gem Society. 2021. State of Digital Transformation Survey Report: How the Impact of COVID-19 is Changing the Retail Jewelry Landscape. [Online]. Available at: https://www.gemsociety.org/
article/how-covid-is-changing-the-retail-jewelry-landscape-survey/.
5. JNA. 2021. Jewellery retail in the time of Covid-19. [Online]. Available at: https://news.jewellerynet.com/en/jnanews/features/24253.
6. Research and Markets. 2021. Global Online Jewelry Market to Reach $58.9 Billion by 2027. [Online]. Available at: https://www.researchandmarkets.com/reports/5140217/online-jewelry-global-market-trajectory-and?utm_source=CI&utm_medium=PressRelease&utm_code=98n9st&utm_campaign=1472633+-+%2421.5+Billion+Worldwide+Online+Jewelry+Industry+to+2027+-+Impact+of+COVID-19+on+the+Market&utm_exec=jamu273prd.
7. ธนาคารแห่งประเทศไทย. 2021. The Next Normal ส่องเทรนด์ "ความปกติถัดไป" หลังโควิด 19. [ออนไลน์]. แหล่งที่มา: https://www.bot.or.th/Thai/BOTMagazine/Pages/256306GlobalTrend.aspx.
8. Missiontothemoon. 2021. ก้าวผ่านจาก New Normal สู่ “Next Normal” ด้วย 4 เทรนด์หลักหลังยุคโควิด-19. [ออนไลน์]. แหล่งที่มา: https://missiontothemoon.co/softskill-new-normal-to-next-normal/.
9. DEPA. 2021. Digital Transformation จาก New Normal สู่ Next Normal. [ออนไลน์]. แหล่งที่มา: https://www.depa.or.th/th/article-view/digital-transformation-new-normal-next-normal.

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