The impact of the coronavirus pandemic has sent shockwaves through the jewelry industry since March, disrupting demand during the wedding season and key festivals. Social distancing measures have significantly hindered retail activity, resulting in missed opportunities for the sector.
The nationwide lockdown further strained liquidity in the jewelry market. Previously, the thriving industry had experienced accelerated growth in the early months of the prior year. However, this momentum was short-lived as businesses faced substantial losses, particularly in the segment of 6–10 carat diamonds and high-end jewelry, which are especially popular in the Middle East. Profitability became increasingly elusive, prompting industry leaders to implement comprehensive strategies to address these challenges.
The pandemic exacerbated an already fragile situation. Rough diamond prices from miners remained high, while the prices of polished diamonds in the market were comparatively low, creating a significant price gap and leading to heavy losses, particularly in the Asian market. Additionally, the ongoing trade conflict between the US and China further strained the diamond industry. In Hong Kong, nearly half of 2019 was marred by citywide riots, which significantly disrupted business. With China and Hong Kong accounting for 25–30% of global diamond consumption, these setbacks severely impacted the industry. Coupled with the COVID-19 outbreak in early 2020, operations across major diamond markets—China, Europe, and the US—came to a standstill due to government-imposed lockdowns.
Even before the pandemic, the industry had been slowly recovering from a prior slowdown, focusing on achieving realistic goals over exponential growth. The nationwide lockdown has dampened the positive consumer sentiment critical to jewelry shopping, as the fear of contagion has heightened anxiety worldwide. In India, jewelry purchases are closely tied to emotional well-being and celebratory occasions, with customers often visiting offline stores during auspicious moments. However, the need to prioritize social distancing as a new norm has posed additional challenges for the industry. Sustained efforts to adapt and mitigate these effects will be crucial until the markets regain stability.
