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20 september 2021
pilyushin_vladimir_xx.pngToday, almost all jewellery companies have their own wholesale websites, online stores, and social media pages. But a year ago, GOLDNET.MARKET, the first jewellery wholesale marketplace appeared in Russia, a new effective tool for the jewellery market, business communication of the industry professionals and for the promotion of their jewellery goods in Russia and the EAEU (Eurasian Economic Union) countries.

Vladimir Pilyushin, the editor-in-chief of the Russian Jeweller magazine, who is also one of the founders of GOLDNET.MARKET told the industry information agency Rough&Polished how this project works under the new conditions.

What is the state of the Russian jewellery market today?

I would characterize the current market situation as mixed. Some companies are quite stable - orders have reached the pre-pandemic level, and have exceeded it for some items. Some companies are shutting down or preparing to close down their businesses. But this is nothing new - it is not the first time that crises have tested the jewellers’ strength. And every time, the business finds ways to restore and further develop the industry. Today, in the new post-Covid (hopefully) conditions, two significant factors can be identified that affect the state and the nearest development of the industry. First, the growth of sales in the exclusive jewellery segment and the associated creation of brands, as well as strengthening of their value in the mind of consumers. Second, an increasing number of manufacturing companies are deciding to make direct-to-consumer sales. Moreover, this is typical not only for Russia, this trend is noted as a global one by the analysts of the international consulting company McKinsey in the annual report on the development level and trends in the jewellery industry.

A year ago, after conducting extensive market research, you presented your universal platform concept - a wholesale jewellery marketplace. You had the opportunity to adjust the platform to satisfy the requirements of its participants. How does the project work?

Over the past years, we have conducted a total of over 300 in-depth interviews with market participants and expanded the capabilities of our GOLDNET.MARKET platform. I would like to remind that so far, only the professionals of the jewellery market (B2B) had business communication on the website. When registering, a participant should choose the “role” of a Seller or a Buyer. For each of these categories, a personal area was developed, where the Seller uploads its goods with their description, sets the rules for displaying them - for all visitors or upon request, and so on. The Buyer can see the goods, sort them in accordance with the peculiarities of its business, subscribe to new goods offered by the companies that are of interest to the Buyer, send requests for the purchase terms and conditions of the selected goods - that is, the Buyer makes the personal area suitable for optimal work. So, we have improved the functions and in October, at the request of the market participants, we expanded the platform’s capabilities and are launching retail sales. Now, when registering, the companies do not need to choose the “role” - in a single personal area, they are able to sell goods by wholesale and retail and to make purchases for their company. For registered users, the system does everything automatically, they do not have to register again. Actually, the platform is divided into open (retail) and closed (wholesale) sections. And inside the system, there are more opportunities for professional market players.

We assume that soon, not only professionals, but also retail buyers will be quite active on our platform. One way or another, this is a global trend that people begin to trust more the niche marketplaces, aggregators (whatever you can call them) - those who are professionally more experienced in their particular field. I would like to remind you that we have been on the jewellery market since 1996 and we know our business very well.

According to Google Analytics, more than six hundred unique visitors visit our platform. One day, “super” activity was registered - the number of visitors jumped to almost 50,000. I fully admit it was a planned attack. But one way or another, the system withstood it, coped with it, and all services worked correctly. We have practically equal number of retailers and the number of manufacturers on the website. Small orders come regularly, mostly for lower-end goods, but we are satisfied because the process has started, the confidence of market professionals in the platform is growing.

How are transactions made on the platform? Are transactions carried out on it?

No, at present, we work as a showcase, or rather, as a virtual exhibition. On our platform, it is possible to view new items and best-selling products in one personal Account, without jumping from one website to another, and select the goods you need and send the list of selected goods to the supplier with a request regarding the delivery time and the transaction terms. Further negotiations and the transaction itself are carried out tete-a-tete.

It is clear that the jewellery business is specific: it is not enough to look at the photo of a jewellery piece, it is better to “touch” the item and look at it. But if you know the manufacturer, you know the quality it provides, you know its strengths and weaknesses, so, the format we offered suits both parties quite well.

In addition, we have such a good function: as soon as a vendor places new products, all retailers and wholesalers registered on the platform are notified of this. In fact, the system to a certain extent does the work usually made by managers and notifies the clients.

Of course, we want and are working to provide business with the opportunity to develop a lot of different activity areas. One of them is a shop-in-shop, when a company does not need to work with its own website, but for a certain monthly fee it works on our one, maybe with our domain name or with its own one, the system is suitable for this!

Moreover, the platform has a serious capacity in terms of its functions. For example, we work with several companies that do not want to make their own websites and do not want their products to be displayed in the public domain. So, our system is so flexible that it allows to work selectively, that is, only clients of a certain company have access to its section of the platform and view the products. As soon as the company is ready to work publicly, it can switch to a general mode of work with wholesalers - this function is already included in the system, and it works: it is possible to demonstrate part of the products in the public domain, and to open part of them upon request (for example, new items that should not be in the public domain for obvious reasons). The company evaluates and decides whether it is necessary to give access to a particular wholesaler.

Perhaps, it was difficult to develop such a complex system, wasn’t it?

We have done a lot ... Well, the public domain - that’s clear. Big problem is with pricing, because there are no open prices, but they are given in the wholesale catalogue; the next steps include the possibility of pricing used in case of using a tolling scheme, as well as in case of deferral of repayment, trade on commission, and other ways ... In addition, this summer, we started testing (with three companies) the goods that we have “in the inventory” and the goods provided “by request” - we call it “traffic light”. Although most of them now work “by request, and few companies keep inventories, with the exception of large-scale companies, nevertheless, this information is very important for a wholesaler. In the personal Account, companies can upload their documents: an assay test, a company profile - everything that is required by law - and the companies have already begun to post documents, after September 1, a field will appear for entering an account number in the SIIS PMPS (State integrated information system in the field of control over the circulation of precious metals and precious stones). The platform allows a wholesaler, for example, to immediately see the forms of contracts, the samples according to which the wholesaler works with this company: the assay test, the company profile, TIN (taxpayer ID number) and the OGRN code (Primary State Registration Number) - all this information. It is quite convenient, because everything is in one place, everything is available. But this applies to registered users only.

Do you have users outside the Russian Federation, how do you work with them?

Yes, there are several users from Kazakhstan, Turkey, and even a girl from the USA. Unfortunately, at this stage, we can only register foreign clients manually, because the programme does not allow registration if there is no legal entity and TIN in Russia.

Today, we realized that the system has been adapted to work not only within a separate country - Russia, Kazakhstan, Belarus, etc. - but also between countries. And here, there are great opportunities that allow the integration with each other.

And what about the opportunities in the B2C segment?

This trend, in fact, arose during the coronavirus, and is explained by the fact that many manufacturers are tired of retail that does not pay commission in time, does not fulfill agreements on deferral of repayment, asks to exchange a certain amount of goods for new designs, etc. The manufacturers began to refuse such wholesalers, to reduce their production, and work either in real money or with the reliable partners they have been working for years. In this regard, they began to trade on WB and OZON, create their own online stores, sell via them, and organize delivery. We are closely following these trends, and I hope that we will present a full-fledged retail catalogue by the October exhibition.

In your opinion, how does the situation with the introduction of SIIS PMPS influence the market sentiment?

In anticipation of the changes that were to come on September 1, everyone was seriously worried. And there were reasons for that. I would like to express my deep gratitude to Flun Fagimovich Gumerov and Eduard Yuryevich Utkin for their selfless efforts in promoting and lobbying the interests of the industry - they have already done a lot. It seems to me that the entire jewellery community should be very grateful to them personally and to the Russian Jewellers Guild Association.

Are there many St. Petersburg companies among your clients?

If we take the market across the country - and it has certain statistics, for example, regarding Kostroma, Moscow, Yekaterinburg, St. Petersburg, Yakutsk, Perm - indeed, on our platform there is a slight “bias” towards St. Petersburg because we are originally from this city. But as the project develops, the companies from other regions of our country add to this list all the time, and in the near future, it will all be statistically equal.

What makes St. Petersburg jewellery companies differ from the rest? The Yakut companies’ jewellery, for example, has a prevailing national flavour. What makes the St. Petersburg companies different? Maybe, the quality level, or different stylistic features...

You know, almost all the companies make high quality jewellery today. There are many companies and jewellers in St. Petersburg, it is impossible to combine them within the framework of a particular style. But I would like to point out one distinguishing feature of the St. Petersburg school, in my opinion, it is the intellectuality. In the works of jewellers, both those in the high art, and those in mass-production, each line is precise and substantiated, the works are characterized by restrained special features, there is no excessive decoration. As a proof, I will refer to the words of the famous art critic M. N. Lopato who believed that the main feature of the St. Petersburg school lies in its impressionability and open-mindness, which allows “melting” different styles and manners in the “crucible” of the Russian mentality, creating their own artistic phenomena. For those who are interested in domestic and world jewellery trends, it will be interesting to get acquainted with our magazine “Russian Jeweller” that is on the website “Russian Jeweller”.

Speaking about a style, design, I always remember Karl Gustavovich Fabergé. Our publishing house once reprinted the catalogues of the company that were published in 1899, 1906 and 1914. So, as such, there is still no Fabergé style, because even in the Fabergé catalogues it is written “Art Nouveau item”, “item in the style of Louis XIV”, and so on. Therefore, as such, the Fabergé style, to my mind, is a generalized concept of high quality and incredible branding.

Galina Semyonova for Rough&Polished