Luxury Jewellery in Indonesia

2020 IMPACT

Postponement of weddings and other gift-giving celebrations suppresses demand

Sales of luxury jewellery declined significantly during 2020 as the social distancing protocols that were enacted in response to the COVID-19 pandemic encouraged many people to postpone weddings and various other celebrations that are often associated with gifts of jewellery until the COVID-19 situation is resolved to the extent that they can safely host a large celebration for their friends and family. This has had a particularly strong negative impact on demand for luxury jewellery, which is more likely to be purchased as gifts for major celebrations such as engagements, weddings, wedding anniversaries and milestone birthdays.

Social distancing and travel restrictions take their toll on demand for luxury jewellery

Traditionally, sales of luxury jewellery in Indonesia have tended to spike in the run-up to major religious festivals such as Eid Al Fitr and Hari Raya. This is because many of Indonesia’s more affluent people choose to purchase expensive items of jewellery before returning to their home towns and villages, a tradition known as Mudik, either as gifts for friends and family or in many cases to flaunt their wealth and signify their elevated social economic status to their proud family and friends back home.

Rising gold price and falling incomes combine to suppress demand for luxury jewellery

2020 saw a significant increase in the price of gold at global level. This is because gold was increasingly regarded as a safe investment at a time of considerable uncertainty in currency and capital markets.

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