Established brands see rise in sales but unorganised players, still holding a dominant market share, expect subdued sales.
A rise in prices would weigh on gold sales this Dhanteras – considered auspicious for purchases of the precious metal – on Monday, with small players expecting a lacklustre festival season for them, while established jewellers like Tanishq, Malabar Gold and Anmol Jewellers are eyeing decent sales.
At Rs 31,565 per 10 gram, spot gold prices on the MCX were ruling 6% higher on Friday than last year’s Dhanteras. While prices in the global market have mostly remained subdued this year, depreciation of the rupee against the dollar has driven up domestic prices of the precious metal that is imported. The rupee has weakened by around 13% in the past one year.
While some of the established jewellers FE spoke to forecast sales to rise by up to 20% due to growing trust in purity and designs of their products, small players – especially in places like Delhi’s Karol Bagh and Chandini Chowk — expect a flat growth or even a drop of 5-10% in footfall in their stores.
Since small jewellers — mostly concentrated in rural areas — make up for roughly 70% of the country’s demand , the overall gold sales this Dhanteras could remain muted.
Rural disposable incomes haven’t quite picked up, thanks to subdued prices of some farm items. A shift in consumer choice — from the unorganised to the organised sector — has also accelerated, affecting sales of neighbourhood stores.
Ahammed MP, chairman of Malabar Gold & Diamonds, said: “The Indian gold market is largely price driven. There is speculation in the market that price rise will scare away gold jewellery buyers this festive season. Jewellers always eye the last quarter of the calendar year to maximise sales, driven by festive and wedding seasons. The price rise of gold will impact volume-based purchase to some extent.”
Some jewellers like Vaishali Shah, director, Rivana Gold and Diamonds, said demand may pick up after Dhanteras, as the wedding season starts late this year.
Ishu Datwani, founder of Maharashtra-based Anmol Jewellers, expected a 20% rise in sales of his company: “Starting this Diwali, there are a lot of weddings, which will help in bridal Jewellery sales. So, there will be a good demand for small- and big-ticket items (during Dhanteras as consumers make purchases in advance).”
Pradeep Kothari, director at Karan Kothari Jewellers, said Dusshera was quieter this year than in 2017 but Dhanteras could reverse the sales pattern for better.
After a rebound last year, India’s gold demand dropped marginally to 523.4 tonne in the January-September period, against 529.2 tonne a year before, showed the data released by the World Gold Council.