Petty jewelry vendors will soon leave the market making room for key players, believes the Ekonomika i Vremya, a Saint Petersburg weekly.
During the past several years the Russian jewelry market has been busily growing, the experts state. Unlike the overall sales growth rate on this market in the world annually reaching about 4.5 percent, in Russia it swings between 25 and 30 percent a year, according to various estimates. Such a wonton growth of the jewelry industry is attributed to customers’ increased incomes, which appears a firm footing for developing production lines.
Thus, last year in Saint Petersburg there were 900 jewelry stores and today there are already about 1,200 stores and this is not the limit, as analysts say: the market in the North-West Federal District and in Russia on the whole is far from being saturated. Manufacturers continue to expand their retail by way of jewelry networks, such as 585 and Altyn, operating in the mid- and mixed price segments, as well as via premium class boutiques, like Platina and Valtera.
The jewelry market growth may also be assigned to the emerging multitude of non-chain bantam stores trading in mass segment goods. At the same time, experts – market players and researchers – stress that such market growth has no perspective since it will soon stop meeting the demand of people, who, earning more money, got more finicky about goods. Small stores are selling low quality jewelry mostly made in Asia. Even if the quality of such jewelry is doubtless, its design leaves much to be desired.
Although today there are many people who prefer to buy a more expensive but exclusive thing, most purchases are done at petty outlets selling consumer stuff. It is attributed to the Russian habit rooted in the USSR period to buy “bling” being guided by the weight of precious metal and the size of gems if there are any in a jewelry piece. And if, as an add-on, this piece is notable for singular design it is perceived as the best choice.
In other words, design requirements are almost in the last place. This is why today expensive stores and jewelry boutiques offering branded exclusiveness have small foot-traffic. However, experts argue that stores and boutiques have the best outlook - petty vendors will leave the market giving place to networks and other big players.
The market will also preserve some place for a few “self-employed traders” working for a narrow, “their own” and usually celebrated audience making super exclusive things.
The beginning of 2008 was marked by a slump in the stock market; businesses not related to the jewelry industry started to buy gold ingots en mass trying to fix their assets in this way. The process generated a situation when gold turned scarce for jewelry manufacturers pushing its price upwards.
The market was feverish, while production decreased almost two times. Even now there is some circumspection among jewelry manufacturers in view of a further, though mild (10-15 percent a year), growth of gold prices. It is possible that jewelry will be once and again withdrawn from sale for revaluation, but the idle period at jewelry factories in the end of winter and in spring will hardly be seen again.
Analysts suggest seeing positive aspects in any phenomenon. Thus, the gold price hike identified real players on the market – large-scale manufacturers having their own sales framework.
Increased “shady turnover” of jewelry and further induration of this already existent trend is an unequivocally negative consequence of the gold price hike – despite the decreased production there is a greater amount of goods. Analysts say that currently counterfeit products bearing faked hallmarks account for almost one half of the jewelry market. The situation may be remedied by revision of the customs and tariffs policy.
Thus for example, the customs duty for gems alone is 20 percent; other duties are almost as high as well pushing the price of a finished product 2-2.5 times up, whereas a similar imported product costs tens of times less.
Experts believe that negative trends are quite possible and above all must be reverted. The Russian jewelry market has real and positive perspectives, the weekly says in conclusion.
The Business Course, a weekly issued in Omsk, attracts attention to yet another problem in jewelry trade – an often low level of customer service.
“Lack of attention to, patience for and interest in customers,” this was the description given to a good half of selling assistants working at jewelry boutiques in Omsk by the “mysterious observers” of the BK-Rating Agency after their regular round.
Omsk’s jewelry retail is full of contrasts and surprises, the weekly writes, and you will never guess which of the stores (in elite or democratic class) will offer you better service. More often than not, the glitter and luxury of interior and assortment bear company with discourtesy and maladroitness of salespersons who deem themselves as experts and impose their opinion on customers. However, by no means in every store salespersons were in any way alert, and not infrequently they preferred to “take time off” in a cozy corner reading a book, listening to the radio or chatting the time away with colleagues. And not to be disturbed once and again, they pretended they didn’t see clients.
Such a behavior smells of the Soviet time service, when saleswomen were idling for lack of business behind their half-empty counters. At that time it could be explained by fixed salaries, but what about now? “Selling assistants would not open their mouths an extra time, nothing can make them utter a word and they are very indifferent,” often lamented the “mysterious agents.” May it be they are silent because they do not know what’s what in their goods? Or may it be that not all of them possess enough expertise? By no means all selling assistants are able to answer simple questions related to the precious metal purity, carat weight of diamonds and type of wickerwork in a chain…
In all appearances, the personnel problem came to plague jewelry stores as well, the Business Course believes. New outlets are opened at a good bat, but judging by the salespersons’ work these outlets are not always manned with qualified personnel because there is no time for training and still there is a need in someone working at the counter.
