Platinum is one of the first jewellery categories to reverse the downward trend caused by Covid-19, despite being a highly discretionary purchase with a relatively small market share, marketing organisation Platinum Guild International (PGI) reports.

Its 'Platinum Jewellery Business Review' report for 2021 states that jewellery retailers and manufacturers have deployed platinum in their recovery efforts, "deftly expanding platinum’s customer base to increase margins and profitability and return to growth in key global markets".

The PGI notes that consumer research throughout 2020 had tracked a change in consumer attitudes and behaviour in platinum’s four key markets of China, India, Japan and the US. That research showed that the pandemic had led to a reprioritisation of meaningful relationships and moments.

"In tandem, jewellery topped consumer wish lists, resulting in a willingness to pay a premium for platinum to mark important moments and relationships. Platinum’s stature as the metal of meaning enabled the jewellery industry to captivate consumers with a more compelling brand story," it notes.

In the US, jewellers were able to benefit from diverted consumer spending, as consumers’ shifting priorities found an outlet in jewellery for signifying value and meaning.

The PGI experienced a significant increase in requests for support from retailers seeking to capitalise on the more accessible platinum price as they pivoted away from white gold.

Platinum jewellery retail sales in the US finished 2020 3.4% higher year-on-year.

"While pandemic measures shut down factories and impacted on sales of new metal to manufacturers, retailers used this as an opportunity to sell aged inventory, resulting in a net increase in business.

"The jewellery trade fared well with both bridal and diamond fashion jewellery set in platinum performing strongly," the PGI states.

It adds that the uptick in growth is expected to continue as more retailers promote platinum in their product offerings and platinum jewellery retail sales are projected to have modest growth for the eighth consecutive year in 2021.

Meanwhile, despite declining consumer sentiment in Japan, there has been a generally positive mood among more affluent Japanese consumers, which has benefited high-ticket jewellery, platinum’s stronghold, and increased asset-based nongem-set jewellery, the organisation reports.

In what is the world's most mature platinum jewellery market, retail sales decreased by only 10% year-on-year in 2020, despite the disruptions caused by Covid-19.

"Platinum jewellery retail sales are likely to have a modest increase over 2021 and PGI will continue to work with retail partners to enhance platinum's position as the 'personally meaningful metal of choice' among younger consumers, while still engaging affluent older consumers, it notes.

In China, improvements in manufacturing technology made bolder designs possible, which, together with process efficiencies and favourable metal pricing, made platinum more cost-competitive for gem-set jewellery, and altogether more attractive to the industry, states the PGI.

A recovery in platinum jewellery fabrication will continue, albeit at a lower rate in 2021, it adds.

Turning to India, the PGI reports that this market was most severely disrupted by extended lockdowns from March to September 2020.

"Therefore, PGI retail partner sales saw an overall 36% year-on-year contraction in 2020. Large chain retailers who are prioritised partners for PGI performed better under these challenging conditions than the smaller unorganised players, and PGI strove to maintain platinum’s top of mind awareness, empathy and relevance leading up to a full-blown recovery programme in the fourth quarter of 2020.

"During the fourth quarter of 2020 and the first quarter of 2021, PGI’s strategic retail partners posted a healthy recovery of double-digit year-on-year growth.

However, as a severe second wave of Covid-19 continues to impact India, consumer demand has stalled, and retailers remain cautious for the immediate term, the organisation notes.