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How Russkiye Samotsvety is coping with the current downturn

03 august 2020

Russkiye Samotsvety Jewelry Center in Saint Petersburg

sergey_dokuchayev_xx.pngOne of the key issues facing most Russian companies today is the need for an objective assessment of the new consumption decline due to the quarantine, as well as making forecasts for a way out of it. According to a RBC-Petersburg’s study made in June, the efficiency of the St. Petersburg’s entrepreneurs has decreased by 40% due to the restrictions during the coronavirus pandemic. These estimates may vary in different business sectors, but one cannot deny that the country’s business and economy have been hurt.

Realizing that in the face of forced restrictions on the production activities, the company loses its flexibility, so Russkiye Samotsvety (Russian Gems) relied on new communication mechanisms as they lacked the usual management decisions such as effective pricing or operational managing the accounts receivable. Innovative forms of remote interaction have entered the company’s life - videoconferencing, use of modern communication channels, on-line consulting.

The company considers an important aspect of its work to maintain constant interaction with partners in the regions, which made it possible to receive the latest updated information on lifting the quarantine restrictions and to discuss possible options in time for overcoming the downturn.

Sergey Dokuchayev, Director General of Russkiye Samotsvety, told Rough&Polished about the challenges facing today his company that is a historical successor as for the St. Petersburg school of jewellery and the stone-cutting art it had in its palmy days.

What anti-crisis measures has the Russkiye Samotsvety company to take?

In accordance with the RF Government decree, the jewellery industry was not included in the list of industries most affected by the coronavirus epidemic, therefore, we had to make our own decisions in the current conditions and were thrown upon our own resources. As for our production, a number of anti-crisis measures were developed on tight budgeting and specifying all the costs, the development of relations with the existing partners, sales promotion, and the proposals were made regarding a system of possible discounts and benefits to ensure our subsequent work with debtors.

The Russkiye Samotsvety branded retail business received additional tax benefits provided by the state. At present, the optimization of the inventory balance is being carried out and a number of stimulating marketing campaigns are planned aimed at attracting new customers and increasing the regular customers’ loyalty.

How are your online sales? How do you manage your sales, what are the changes in the current situation?

Nowadays, the purchasing power of the population is decreasing, so we did our best to maintain contacts with our customers and partners and invited them to make purchases against preliminary orders and via online orders. We got the opportunity for this thanks to our online platform, the Russkiye Samotsvety Online Gallery that partially compensated for the losses from closuring our retail outlets.

            Image credit: Russkiye Samotsvety

How is the work and jewellery production organized - to what extent, what is the volume?

Gradually, the situation is changing for the better because on June 9, our Russkiye Samotsvety brand stores having a separate entrance were reopened, and sales start showing positive dynamics. We understand that there is a pent-up demand for certain categories of products (engagement and wedding rings, diamond jewellery, silver cutlery), and they are still in demand. But the task is not to lose a mass segment buyer under current conditions.

Therefore, our technological services are currently focused on reducing the cost of the products through upgrading our production processes, possible reducing the weight of the most popular mass segment goods, and developing new designs in the mass demand segment. All this work is aimed at diversifying the sales channels and finding new areas of activity.

The trademark of the Russkiye Samotsvety jewellery factory is a stylized diamond in a setting. What part of your production is diamond jewellery?

The diamond jewellery is among the company’s priorities. We display a wide range of high quality and modern diamond jewellery pieces at each jewellery exhibition. The jewellery studded with precious stones makes over 40% of the goods sold by our company. We work with real, natural diamonds only. This allows us to create superior quality jewellery items while maintaining competitive prices. In addition, we pay great attention to quality standards, and the effective in-house control in all parts of the technological process excludes any claims from the buyers of our jewellery.

            Image credit: Russkiye Samotsvety

Russkiye Samotsvety was once awarded the prestigious international Golden Mercury Prize in France ‘For a 25% share of the total volume of goods exported to over 30 countries of the world’. The Guild of Jewellers of Russia has recently been considering the export perhaps as the only way out of the current crisis in the jewellery industry. When everything gets back to normal, what are the plans of Russkiye Samotsvety as for entering the foreign markets?

We intensified our efforts to increase the share of exports in the total production and are planning to enter new markets in Europe, Asia and the CIS. Just after the work restrictions had been lifted we began fulfilling the most challenging orders for our new customers from the United Kingdom. The Chinese market is also of great interest to us due to the high consumption of original design jewellery, we rely, in particular, on our branded enamel filigree pieces. As soon as the restrictions on holding mass events are lifted, we hope to take part in major international exhibitions such as Ambiente in Frankfurt am Main in February. Participating in such shows allows you to be ‘on the same wavelength’, establish new business relations and find new customers.

In 2006, Russkiye Samotsvety launched the production of unique jewellery with diamonds in invisible settings - ‘Invisible’. Nowadays, this technique is used by all diamond jewellery firms. What new technologies are being used now?

In 2019, we started the production of new transformable jewellery that can be transformed from one fashionable jewellery form to another. But it is worth paying special attention that in addition to creating new technologies, we also preserve and develop the old techniques and traditions of the St. Petersburg and Carl Faberge’s jewellery school. In particular, our unique ‘Faberge Heritage’ collection of gold jewellery with diamonds made using the guilloché enamel technique enjoys continual popularity among the consumers; in general, as for new technologies - let's not hurry things along and wait for the international Junwex 2020 exhibition in September.

Galina Semyonova for Rough&Polished