Written by Julian Walter – Marketing specialist at ExJewel (Europe, India)

Economic and social shutdowns have a far-reaching impact on the jewelry industry and it affects every step in the supply chain – from mining companies to small vintage jewelry merchandisers, they now all must fight for their survival. What is the status quo and how can affected companies limit their risk of disappearing? 

India, the largest producer of gemstones in the world, has announced a nationwide ban on going out following a rising spread in infected people of the new coronavirus – this affects approximately more than one billion people of the largest democracy in the world Globally, almost every economic sector is negatively impacted by governmental measures that aim to contain the corona outbreak. For India, one of its most vital economic sectors, the jewelry industry, is especially hit hard: on the one hand, production is drastically reduced due to the most recent governmental measures taken by the Indian government and only operates at around 20-25% in terms of capacity compared to pre-crisis production levels. This is also due to jewelers struggling to meet tax-related deadlines in March. On the other hand, there is a blow to demand, which is predominantly wedding driven and due to the virus, those events are canceled in large numbers. This pattern cannot only be witnessed in India but in other countries as well. 

Worldwide, in an effort to contain the outbreak jewelry trade shows are canceled. This is especially the case in China (e.g. the Hong Kong International Diamond, Gem & Pearl Show and the Hong Kong International Jewelry Show were both postponed to May), which usually is the country with the highest demand for luxury products. LVMH, a French luxury conglomerate, experienced a 30% drop in market valuation, especially due to a drop-off in Chinese demand that usually represents 30-50% percent of the revenue of European luxury companies. Production-wise, large-scale mining companies experience a drop in production due to corona-related restrictions as well as prospected reductions in global demand. 

ExJewel’s appraisal tool is 100% free until the end of April, due to the virus hitting major countries. Sign up here for free to evaluate your jewelry stock today here.

How can affected companies reduce their risk of disappearing? Joseph Schumpeter, a political economist of the 20th century, said: “Products come and go. Strong ones reinvent themselves, weak ones disappear.” – thus, innovation and adjustability may be imperative to stay in business. 

Luxury Brands 

This is not a time for large-scale profits, instead, it is also a time for social togetherness – and that includes luxury brands as well. Instead of temporarily closing production, luxury brands such as Louis Vuitton & Co can not only help fight the pandemic by switching production to producing facial masks but thereby can also boost their social perception and standing in the eyes of customers. 

Mining Corporations

Mining companies must rethink their entire supply chain. As production slows down, mining companies have to contemplate how to effectively distribute existing stock to regions that are not yet drastically affected by the virus and that are able to process the raw materials. Further, as transportation is also impacted by the virus, companies need to check which transportation to use. Thus: a smart distribution network that accounts for varying global demand is necessary. 

Jewelry Brands and Retailers: 

Although the coronavirus means a blow to demand, this could also be temporary and, depending on developments, can change to positive any day. Thus: brands should adjust production to developments and should prepare for a sudden improvement of the overall situation, especially with rising demand from China due to recent improvements. 

Merchants and retailers, most of them closed due to corona-related restrictions, must now switch to online distribution channels if not yet done so in order to stabilize revenue and to cover costs. 

Auction Houses 

Auction houses organize events online as well as offline. Auctions of high-value items are postponed to late spring (however, with a question mark). Online auctions take place as scheduled. However, with increasing demand for real assets during this economic crisis, auction houses must take the opportunity and contemplate how to solve the twist of making on the one hand use of this increase in demand and thus increased revenue and on the other hand the problem of executing those events. Maybe, they won’t get around transferring more offline sales to an online setting. 

jewelry everywhere


During a crisis, usually, demand for real assets goes up. Metals and gemstones, or jewelry generally, are considered a “safe harbor” during those times. For instance, gold weakened during mid of March, however, quickly recovered by now. Thus, one could consider jewelry also as an investment. But there are differences within gemstones: diamonds, for instance, have witnessed an almost 10% drop within the last three months. This, however, could be explained by the lack of transparency of the industry concerning overall quantity and sustainability. 

As the overall situation in China seems to stabilize in terms of new cases of infected people, it worsens in Europe, a large producer of luxury products – both are dependent on one another and time will tell if the measures taken by governments will soon enable the jewelry industry to gain shine again. For now, companies in the gemstone industry have to adjust and reinvent themselves. Or they will risk disappearing. 

ExJewel’s appraisal tool is 100% free until the end of April, due to the virus hitting major countries. Sign up here for free to evaluate your jewelry stock today here.