The event beginning this October is expected to generate sales worth Rs 4,000 crore in the following 2-3 months. World Gold Council (WGC) is planning to make the shopping festival an annual event.
We will most probably launch the festival by Dasherra, Dharmesh Sodha, director, WGC, said at Third India International Gold Convention. The 45-day activity that would cover the festive occasion of Diwali will provide incentives to jewellery buyers during the period and is aimed at improving customer access to branded jewellery as well as increasing retail demand of branded jewellery.
The activity is very much in line with the Dubai Shopping Festival (DSF), which has since its inception created an increased demand for gold jewellery in Dubai. Gold offtake during DSF in the first quarter of the last year increased 30% compared to offtake in the same period of the previous year. India had exported about 3.5 tonne of gold jewellery to Dubai for its DSF in 2005. India accounts for one fourth of the total jewellery supply to Dubai. This was despite the fact that gold prices are shooting through the roof.
Tawhid Abdulla, chairman, Dubai Gold & Jewellery Group, representing 700 members, had earlier told the FE, India accounts for about one fourth of supplies for the jewellery sold in DSF. Interestingly, about 650 members of this association are Indians. India had been the largest supplier of gold jewellery for the festival while over the year it trails Italy followed by Indonesia and Malaysia.
Enthused by the leading role played by Indian jewelers, WGC is rolling up its sleeves to increase jewellery sales in India after it fell a massive 42% in the second quarter (April-June).
The gold jewellery market in India is around $13 billion, of which 96% is catered to by family jewellers. Only 4% of the overall market in 2006 was cornered by the different brands. The branded jewellery segment as of now is mainly fuelled by diamond jewellery brands.
Indias vast middle class and its almost untapped retail industry are key attractions for global retail giants, including the jewellery retailers. The Indian middle class, which is estimated to be at 20-25% of the population is considered vital to drive the retail demand.
AT Kearney in a study has estimated Indias total retail market at $202.6 billion, which is expected to grow at around 5% annually over the next five years. The organised retail segment, which forms only 3.5% of the total retail industry is growing at 25-30% per annum and is expected to triple in size from the current $7.7 billion to $ 24 billion by 2010.