Luxury Jewellery in Russia

2020 IMPACT

Luxury jewellery sees negative impacts from the increase in gold prices, further compounded by impacts from COVID-19

Luxury jewellery strongly depends on the cost of raw materials, especially gold, and currency exchange rates. In 2019 and 2020, the cost of gold increased significantly, leading to the increase of unit prices on gold luxury jewellery.

Luxury fine jewellery considered as an investment tool in times of economic uncertainty

Many affluent Russian consumers consider luxury fine jewellery as a good investment during times of economic crisis. In fact, wealthy consumers are more inclined to invest their spare finances into luxury jewellery during times of uncertainty and complicated economic conditions.

RLG maintains company lead, whilst Tiffany & Co tops the list in brand terms

RLG OOO maintained its lead in luxury jewellery in company terms in 2019, despite losing shares to second-placed Tiffany Russia OOO. However, in brand terms, RLG’s Cartier brand plays third place to Tiffany & Co (Tiffany Russia OOO) and Bvlgari (Bulgari Russia OOO).

RECOVERY AND OPPORTUNITIES

Slow economic recovery will continue to negatively impact sales over short-term forecast period

There are no prerequisites for the rapid restoration of real disposable incomes of Russian consumers over the short-term forecast period. As a result, low consumer disposable incomes will continue to negatively impact demand in luxury jewellery in 2021-2022, supressing its performance overall.

Players set to focus on e-commerce channels and distanced sales strategies

All players are set to have a stronger focus on e-commerce channels over the forecast period, in order to enhance brand image, maintain customer communication and re-stimulate sales. It is likely that players will also follow the example set by RGL, whereby customers may place their orders by telephone, pay for it online, and receive their orders delivered to their homes.

Recovery of sales in luxury jewellery expected no sooner than 2022-2023

The recovery of luxury jewellery depends on the epidemiological situation in both Russia and the rest of the world, due to the myriad factors negatively impacting the category due to the event of COVID-19. Factors to recovery will need to include the emergence of a safe and effective vaccine, along with special measures implemented by the state to control the spread of the mutating strains of COVID-19.