DW Exclusive: Sunny side up: Slowdown throws up a host of opportunities as well

As the economy frays globally and packs a one-two punch to business, the Indian jewellery industry appears to have been intimidated by the current recession. Jewellers are daunted by the prevailing economic scenario. Diamond mines are cutting down production , major lay-offs are happening everywhere, American companies are filing for bankruptcy, companies are begging for their payments, diamantaires are excoriating Rapaport for low prices, inventories are returning because of low Christmas sales, Surat factories are closing down, workers are committing suicide or striking work. De beers intends to sell rough to secondary markets after its sale of less than $100 million of rough in the February sight. The media has screaming headlines about plummeting sales, profits or exports. Everyone is looking for a ray of hope from either God or the US President, Barack Obama.

Crises and opportunities are actually flip sides of the same coin, one often helps the other to blossom and bloom. So don’t be surprised if we say some aspects of the current economic slowdown will often present opportunities which can be utilised and are not frightful threats to business. Repositioning, overcoming weaknesses and preparing yourself for growth are ways to tackle this recession so that when the world gets back to spinning the right way, you are on the right curve. So here are ten things that can bring cheer to your 2009.

1. Goods come cheap.
This is the right time for creating and levelling your inventory. Goods are available at low prices and if deals are done in cash on the table, you can avail of higher discounts.

2. Right time for companies from other fields or sectors.
For companies who have always eyed this sparkling industry and envied it, this is the right time to put your money down and build your low cost inventory.

3. E-store, zero inventory.
The online e-store with the concept of zero inventories and low cost vendors can be an innovative and creative way of entering the Indian retail jewellery industry. E-retailing has been a powerful tool of the jewellery trade abroad, especially in the US, but in India there have been few takers for this unique technology. Till now there are no names in the Indian retail space which are synonymous with Blue Nile or Amazon.

4. Sustainability
Sustainability is the key word, as big companies with huge leveraging may dissolve and give opportunities to small and medium size companies to grow.

5. Cash is king
Companies sitting on cash and minimum leveraging are kings. They are capable of weathering this period through with grit till the end. Panic selling on discounts can be avoided only by these companies. They should be patient, avoid new ventures and financial bravura for a while.

6. Time to exhibit
This is the right time to exhibit in trade shows since hotels in India and air fares are cheap, stall space can be availed of in discounts and most of all, for jewellers, the exhibition and sale of jewellery is important to clear pending payments for raw materials.

7. Cautious Consumer
Today the consumer will not buy from any jeweller in the market. Since he is insecure about the future, he is stashing away his salary in financial instruments and savings. He will now buy jewellery only for marriages and special occasions; he will look for genuine and trustworthy jewellers who are offering quality at reasonable prices. In order to catch these customers, it is important to continue advertising, advertise the right message to the right audience at the right time.

8. Tap new markets
Do some business analyses like SWOT(Strength, Weakness, Opportunities and Threats) and PEST(Political, Economic, Social and Technology). This will help you to select and choose the right markets for your product. According to Diamond World’s research, these are the countries and cities where jewellery products could have high demand. The list is given below:

a. Russia and CIS Countries
Big market with deep pockets, buy diamonds of only SI and VS quality.

b. Middle East
Prefer both diamonds and 22K gold jewellery. Customers in the Middle East disdain delicate designs and favour only big and elaborate jewellery products.

c. People’s Republic of China
Good market for loose diamonds, prefer VVS, VS and SI+ diamonds

d. India:

Kundan Meena Jewellery:
New Delhi, Jaipur, Mumbai, Chennai, Hyderabad, Kolkata

Diamond Jewellery:
Low Quality- North India (Chandigarh, Ludhiana, Delhi and the NCR region)
High Quality- South India (Chennai, Hyderabad, Bangalore, Kolkata)
Commercial- (Mumbai, New Delhi, Bangalore)
High End- (Mumbai, New Delhi, Bangalore)

Diamonds:
Small Diamonds - Low quality(Chandigarh, Ludhiana, Delhi and NCR)
Small Diamonds- High quality(Chennai, Hyderabad, Bangalore, Kolkata)
Big Diamonds -(Delhi, Chandigarh and Mumbai)

9. Weddings are drivers of demand
Wedding will always be the only driver of sales for the Indian jewellery industry as jewellery is an essential feature of the big fat Indian wedding! When the consumer has bought his daily necessities, only a wedding can compel him to buy a high-end item like jewellery. In a financial crunch, weddings will remain the biggest driver for buying jewellery.

10. Exporters can look to India.
Exporters who are agonising over delayed payments, idle labour and shut factories because of cancellation of orders from the US, can look to India for the sale of their jewellery. The Indian economy may still grow around 5% for the next two years which is much better than countries like the US and Japan which are in negative growth this year. The domestic market of India is still attractive as it is an inextricable part of religious rituals and weddings which even a global meltdown will not be able to impact.

In these straitened times when many businesses are turning belly-up, only the best will survive, history is proof of this. Google, CNN, Walt Disney to name a few were companies that started during bleak times and yet they made it big. The key is to keep going and be visible in the market and continue budgeting for marketing and advertising. All you need is an idea and the rest will follow. And there couldn’t be a better time and opportunity than this.