Rings and earrings are the top two in the jewellery market, reads the Russian weekly “Kommersant-Dengi”, 22% and 18% of the overall sales correspondingly. According to the estimates of the information and analytics agency “Russian Jewellery Network”, today 6.1 per cent of customers are willing to spend over 30 thousand roubles on a ring, while only 2 per cent would buy a pair of earrings for the same amount of money.
The past fifteen years have brought about many changes: the way people look at the precious metal has changed as well. Mr. Pavel Sidorenko, the Marketing Director of “Adamas” Company, recalled that in the early 1990-s adornments of 585 hallmark red gold accounted for the lion’s share of sales. For this loyalty to bright red gold, the alloy was nicknamed Russian gold all over the world. However, today the Russians have not only “tasted” the yellow-colored gold, but what is more, they prefer it to the red gold. Some years ago, thanks to the trendsetting Italy the fashion for white gold spread throughout the globe and flooded Russia.
On the contrary, platinum and palladium are still mysterious metals for Russian customers. According to the data from the agency “Russian Jewellery Network”, there are only two enterprises in Russia that manufacture adornments of platinum and palladium - these are the Krasnoyarsk and the Yekaterinburg Non-Ferrous Works. The rest just do not have the necessary smelting and founding machinery. Moreover, there are no solders to secure compliance with the Regulations for Precious Metals Assaying and Marking.
Experts highlight the fact that Russian buyers underestimate jewels of platinoid metals and foretell fine future for them. “Kommersant-Dengi” informs that the Jewellery Factory “Adamas” has been coating some of its jewels with rhodium for two years already. As a result, the product becomes stronger and acquires dazzling snow-white glitter. Just a couple of years ago very few buyers would spend money on such goldsmithery, for it looks a bit too like bijouterie. But now, customers look more and more positively at novelties. “Well, in the Soviet society you would have liked everybody to see that you were indeed wearing gold”, explains Mr. Sergei Alkhazov, President of one of the largest trade networks “Centr Yuvelir”, “And now girls have a different psyche: I know what I’m wearing and I’m happy. If he is a clever man, he will see, and if he is a fool, I don’t care for him.”
“The share of diamonds in the sales of an average jeweller’s shop is increasing, now it makes up almost one third of the total sales (according to the 2006 data of the Jewellers’ Guild of Russia, the sales of adornments with diamonds accounted for a half of all money returns from retail sales)” says Mr. Pavel Sidorenko from “Adamas”. “Besides, in the recent two or three years jewellers have manifested a tendency to offer jewels with stones of a widest color range. And what is more, the stones belong not only to the first group of sapphires, emeralds and rubies, but also, say, aquamarines, citrines, garnets, corals and topazes.”
Mr. Sergei Alhazov also notes the increasing liking of stones. “Rubies just storm into fashion! And not at all because this is a stone of first group. Our parents would consider ruby a kind of low-class. Big red stones were popular, generally, in Central Asia. Today, all phantoms have become things of the past, and what is brought to the forefront is the stone’s beauty, its uniqueness. A ruby, if its color is really rich, is amazingly beautiful.”
The marketing executives of “Russian Jewellery Network” explain that a greater part of Russian buyers (in the provinces this figure reaches almost 70 per cent compared with twice smaller figures in the capital) prefer the jewellery made in Russia. With that, more than 50 per cent of our compatriots do not care for the factory, where the earrings or the ring was manufactured. The one who does care for the Russian brand is the jeweller. Experts believe that the customers’ loyalty rests not on the trust in our factories, but rather on the trust in the strict government control of the gold turnover.
The Russian identity still shows in a number of things. For instance, experts maintain that traditionally our women gather sets of adornments, while a Western lady could buy pearl earrings just because they appeal to her and the disappointing fact that she doesn’t have a suitable necklace wouldn’t even cross her mind. Despite all this, the main world trend continues to spread all over the country. And the matter is not that some materials and designs are more preferred than others. The wind of change has blown out the old attitude to the purchased jewellery itself. It is no longer a treasure, which a girl would hand down to her granddaughter when she herself becomes a grandmother. It is just an accessory, which goes well with a certain costume. Indeed, a jewel from the mass market segment doesn’t have any investment value. Moreover, players in the Russian bijouterie market assure us that an increasing number of customers would prefer stylish bijouterie to cheap goldsmithery.
An important trend, which will for sure have an influence on the development of the Russian jewellery industry in the near future, as the newspaper “Rossiyskaya Gazeta” reads, is the emergence of the market of exclusive jewellery, which would be handed down from parents to children turning into a true store of value.
Today, the cheapest of the exclusive pieces cost as much as USD1,000, but their price will grow 1.5-2 times every year. This trend was defined by the participants of the First All-Russian Forum “Investments in the jeweller’s business and collector’s items”, which took place in Moscow at the end of the previous year. The specialists say two reasons underlie the customer’s interest: increased incomes of Russian families and investment appeal of precious metals. However, Mr. Yaroslav Molchanov, President of the Russian Guild for Jewellery Trade Assistance, points out that when we speak about the so-called cumulative investments of “free” money in family jewellery, we mean only the purchases of exclusive piece-goods from specialized companies and art studios, as in this case the larger price component is not the cost of the precious metals, but the unique stones and the work of the craftsmen.
Speaking about diamonds, you had better buy 0.5-1 carat stones and larger (it is approximately 4-5 millimeters). Today, such stones average in price between 0.9 and 2.5 thousand dollars depending on clarity and color grade. At the same time, according to an expert opinion, the investment appeal of other mass market gold bijou including pieces with small diamonds will be zero or even minus. Pawnshops will accept such goldsmithery at the price of precious debris, which is half as cheap as the retail price.
Besides, an “RG” reporter has found out from the Jewellers’ Guild that the first specialized mobile “gold” shop in Russia will be opened as early as the next year. The main purpose of it will be to offer and sell jewellery of high investment appeal for family collections. That is why, even now, it is worth investing your “free” money in jewellery gold with large stones of first category, where belong diamonds, rubies, garnets, sapphires, and emeralds. These hoarding items, as specialists call them, are rising in price by 25-30% monthly. In addition, they are not subject to inflation for more than ten years. Moreover, adornments with second category stones, the world deposits of which are worked out, and namely, aquamarines and large tourmalines, have acquired a special value in the modern market.
“Customers all over the world are scouting about aquamarines; adornments with them will rise in price many times just in a couple of years”, says Mr. Molchanov. In general, according to his forecast, in a year or two the demand of single-piece jewellery will exceed the supply. It will, consequently, give a jerk to the development of deluxe jewellery market; and the market leaders will be jeweller-designer schools using ingenious artistic solutions. Such non-market mechanism as “family factor” will also play a big role in the formation of the market. Flats, summer houses and cars have long been the only measure of stability, success and well-being for Russian families; these things constituted the children’s legacy. However now, this legacy can also include luxurious family jewellery, the so-called modern icons, which are not only a store of value, but also a store of family memories and legends. “This specific demand,” says Ms. Galina Ananyina, Chairwoman of the Subcommittee for History and Traditions in Business at the Chamber of Commerce of Russia, “will stimulate the appearance of unique products in the jewellery market, the birth of new Carl Faberge’s.”
