Russians began to actively buy gold and jewelry: the reason for the rush is named

The average purchase price for jewelry increased by almost 20%

There is a real jewelry rush in the Russian consumer market. At the end of 2023, the domestic jewelry market grew by 18% – to 365.6 billion rubles, and the average bill soared to 7.5 thousand rubles. What caused this trend? Has the population’s income really increased so significantly or are people simply tired of saving on themselves? According to market analysts, many buyers purchase jewelry on credit. As for the goals pursued by buyers, gold and jewelry are most often purchased either as a gift to someone, or for investment purposes – to make a “long-term” investment.

According to a study by a specialized analytical center, at the end of 2023, the Russian retail jewelry market grew by 18%. This is not just a small increase, but an explosive jump in demand for this area. As a result, sales amounted to 365.6 billion rubles. Last year, the average bill for jewelry reached 7,552 rubles, which is 16.3% higher than the previous figure. Russians continue to buy jewelry, despite the ever-increasing cost of jewelry. Thus, according to Rosstat, prices in this segment began to rise in August 2023 and in December 2023 were 22% higher than a year earlier.

Consumer interest peaked in the second half of 2023. In the first half of the year, the market balance was shifted due to the sharp departure of international brands, for this reason the turnover of the Russian market increased by more than 20%. Prices for jewelry products have naturally increased.

“As for the reasons for the growth in jewelry sales, firstly, there is a certain category of wealthy citizens who create stable demand,” says Valery Tumin, a member of the Expert Council for the Development of the Digital Economy of the State Duma. – Secondly, it is quite expected that many citizens, in conditions of high volatility of the ruble and instability in the stock markets, will want to invest in something “solid”, traditionally reliable. Such investments include gold or jewelry.”

According to BitRiver Communications Director, economist Andrei Loboda, market growth is associated with an increase in real incomes of the population. Let us recall that over the 9 months of 2023 this figure increased by 4.8% in annual terms.

“The higher the income and purchasing power of the population, the higher the demand for jewelry,” continues Loboda. – Nominal wages in 2023 in many sectors of the Russian economy increased by 10-13%. The middle class’ incomes are growing for the first time in recent years. And this, in particular, is reflected in the jewelry market.”

At the same time, according to the expert, less wealthy citizens probably purchased jewelry on credit – using credit cards or in installments, which banks and stores provide very willingly.

“In Russia, the acquisition of jewelry as an investment is not very developed. And, in addition, for investment purposes you need to buy really expensive, high-quality jewelry and jewelry. But it cannot be ruled out that some Russians buy, for example, gold watches or gold chains to wear for a while and then resell on favorable terms,” concludes MK’s interlocutor.

The growth of the jewelry market is largely a recovery growth after the recession of 2022, believes investment strategist at BCS World of Investments Alexander Bakhtin. Last year, the Russian economy adapted to the new sanctions conditions, and real incomes of the population grew. At the same time, the market was restructured after the departure of Western brands, jewelry became more expensive (due to rising gold prices), but at the same time they began to be purchased online more often. Today, every fourth purchase of jewelry in Russia is made through apps and marketplaces; over the year, the share of such sales has grown by 6%.

“As for the purpose of the purchase, approximately 8 out of 10 jewelry are purchased as a gift,” Bakhtin is sure. – Purchases for investment purposes are quite rare and occur more often in the segment of expensive products. Here we must take into account such disadvantages as compared to physical gold, such as lower purity (non-ferrous metals are added to the jewelry alloy to improve strength, color, etc.), low liquidity (selling a gold necklace or bracelet is much more difficult than selling an ingot), the risk of running into counterfeit and, of course, the inevitable price premium (manufacturing costs, transportation costs, seller’s markup, brand fee).”