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The task of all the jewellery community is to back up the history of natural diamond, its myths, its reputation of a rare and most precious gem

03 july 2017

igor_kevchenkov_xx.jpgRusskaya Yuvelirnaya Kompaniya No. 1 Holding comprising the Moscow jewellery factory of the same name and the retail chains in Novosibirsk and Moscow manufactures exclusive jewellery pieces and sells them on the Russian market. It specializes in making the high-carat gold with diamonds and first class gems. The сompany’s products were among the exhibits in Basel, Vicenza and many Russian jewellery shows. In his interview with the Rough&Polished information agency, Igor Kevchenkov, Director General of the Russkaya Yuvelirnaya Kompaniya No.1, speaks about the state of the Russian jewellery industry and how the Russian jewellery companies operate today.

Even the major world jewelers like Tiffany и Signet, lately have been showing the decreased performance figures. What is the situation on the Russian jewellery market?

It should be noted that a similar tough situation was in 1997, but it was a short-term one. but today, the greatest challenge for all of us working in the market is the foreseeable future. It is not clear, what distance we should run. If only someone could tell us that the things would improve in three years, we would decreased the overheads - made the operation ‘leaner’– and would keep the company from shutting down and just wait till things go better. And today, we live to the actual weather: no rain – we take off, it starts raining – we land. To put it in a nutshell.

In principle, earlier, we gave the prognosis for the development for 2-3 years, but today our task is to keep everything that has been gained, as well as help our clients and do the same for them but for less money, which is more human. At the best years, our customer told “I would like a 2.2 carat diamond, better a 1.1 one” (they bought 3.3 carat diamonds reluctantly), today, a customer says “I have got such-and-such sum of money and I want a gem of such-and-such size – can you satisfy my want?”

This year, there were no New Year season sales. During this period earlier, we saw the peak sales and we always were waiting for the holidays – the New Year, Valentine Day, and March 8, when there always was a surge in sales, but lately, it was small and this year, it practically waned. Flat months like all other months of a year.

What do you do to promote your products?

We, for example, have launched a ‘Russian Beauty’ jewellery collection that was exhibited in Novosibirsk. We arrange our shows twice a year there. The last one was in April before the Easter and was devoted to Carl Faberge and his heritage. We displayed our jewellery and the pieces by our St. Petersburg colleges, the students of the Carl Faberge College. The vice-governor and the Minister of Culture of the Novosibirsk Region were present as well as the representatives of the Russian Historical Society, our clients and friends and the event was a success. This activity is more of a selfless kind, it educates and helps the people get acquainted with the best traditions of the Russian jewellery art.

How do you build your advertising activity?

In today’s situation, while implementing the promotion strategy we act on a case-by-case basis. When arranging some certain events, we carry out target-oriented advertising and choose 3-4 radio channels, or make announcements on TV in prime time. We also put our information in the Internet and post it in the social media.

Is there a secret for survival of the jewellery industry?

In this respect, we consider interesting design solutions, try to use them in brooches, large-size rings, do our best to combine them with the natural lower-quality stones to decrease the price and also we make silver jewellery – small batches, 5-15 pieces in each batch. In short, we practice an individual approach to our client.

When studying an issue and having a deep understanding of it, one can afford to manoeuvre with a small-scale production unit aligning it with the today’s demand. More importantly, one works directly without any intermediate party: from a factory to a store. The price is minimum 50% lower than the price set by those working on commissions. We keep the main segment - made by us - for ourselves. We cannot manufacture every type of jewellery, so we co-operate with the partners who make gold necklaces, the phianite (cubic zirconia) jewellery… and this is the second part displayed in our stores.

What is the share of natural diamond jewellery in your products and what is their economic returns?

The share of natural diamond jewellery in our products is over 60% and they bring the main part of the profit. And one can understand this – if a diamond is cut by a master of his craft, it is eye-catching. I think that the main task of all the jewellery and cutting&polishing community is to be able to back up the history of a natural diamond, its mythos, its reputation of a rare, difficult to access, and most precious gem. If we succeed, the market will grow.

What kind of customers do you have and what do they purchase?

We focus on the cult-objects and utilitarian necessities. Nowadays, the tradition came to us to give as a gift an engagement ring while proposing to your girl for marriage. Rich people or children of wealthy parents can afford a more expensive purchase, the rest buy the diamond rings from 0.1 to 0.5 carats. This is one of the segments. Stud earrings (so called ‘studs’) are always in demand: the opinion is that these are ‘must-have’ pieces for every lady, as they are casual earrings. There is another promising segment like all types of wedding rings. But we are not going to compete with the companies that specialize on these: we create more exclusive pieces, more individual, with precious stones as studs.

What are the channels where your sales are the best?

Private channels show the best results. It is because people now have ‘leaner plans and started counting their money, and even if the piece is custom-made the intermediary services are excluded from the price.

What are your expectations for the e-commerce?

Nowadays, it is common: it saves time, provides an opportunity to get anything keeping seat. But it doesn’t apply to diamond pieces. The only thing one can do is attract the buyers to a brick-and-mortar store via Internet where they can see and touch everything. Even our experts on merchandize tell ‘we do not judge by pictures, let us touch it.’ But in fact, this is our future. We simply should find the key, find the way how to do it. Because it is neither a pair of running shoes nor an item for 5 – 10 thousand roubles. People pay minimum 30 000 online. Our people seems to have a propensity for being cautious and trying to personally make sure that it is really the thing he or she would like to buy. A good expensive thing can be advertised in the Internet, but not sold online.

Do you take part in exhibitions or fairs like Junwex?

We have not exhibited our pieces for a long time, but we always visit the shows, meet our colleagues, purchase some goods that we do not manufacture but sell them in our stores.

What are your expectations for the industry?

As for the improvement of the situation: people still have much money in their wallets. By way of example, earlier, guest workers – although they earned very little - came to buy some necklace to take it home. Now, they do not come. However, we should understand this situation is not typical of the Russian market, it is typical of the global one. Stagnation has been in the jewellery business in Europe for a long time. Even major brands do not make great collections now but offer limited lots of jewellery. It is difficult to predict anything for many years to come – let’s wait for the elections and see. Nowadays, the same is happening as it was last century. The history spirals on, it means that one day the crisis will be over.

Please share your plans for the future with us.

The strategic plan is to keep the businesses afloat. This is our main goal and today all our manufacturers set this task. In the situation we have now, it is fraught with consequences to make any ill-advised moves: each and every such move can lead to the brink of complete collapse. Having gone through all the ups and down of the life one starts to fear that the light at the end of the tunnel could be the approaching steam locomotive threatening you a head-on collision.

Galina Semyonova for Rough&Polished

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