Jewellers in rural areas, however, witness lacklustre sales
Gold sparkled again on Dhanteras, considered auspicious for the purchase of the precious metal, as buyers sought to take advantage of a recent fall in prices, jewellers and industry executives said on Monday.
However, Dhanteras this year was in many ways a departure from the immediate past: smaller jewellers — mostly concentrated in rural areas, catering to the bulk of the country’s demand —saw muted growth in sales from a year before, while some established ones recorded sales in the range of 15-30% until Monday evening.
Meanwhile, coins made a comeback after lukewarm response for the past two years. Sovereign gold coin was introduced by Prime Minister Narendra Modi on November 5 and is being sold at 125 MMTC outlets across the country.
On Monday, men bought gold in large volumes online, to be counted as serious jewellery customers, although women continue to be the undisputed leader in jewellery purchases.
While Tanishq — the country’s largest retail jewellery chain— saw “robust”, “double-digit” growth in sales, Kalyan Jewellers — the second-biggest player — saw a 30% rise in footfall in its outlets. Popley Group estimated at least a 15% rise in sales, while some smaller neighbourhood jewellers witnessed a 5-10% increase in footfall. MMTC-PAMP (India) expects a 25% rise in coin sales.
Gold prices rose Rs 120 per ten grams to Rs 26,230 in Delhi on Monday, responding to the uptick in demand for Dhanteras as well as a depreciation of the rupee against the dollar that made imports of the precious metal costlier. Still, the prices are almost 6% down from Dhanteras last year (Oct 21).
“The fall in gold prices has come at a very opportune time and has boosted consumer sentiments. We saw very robust growth in sales, in doble digit, since morning,” said Sandeep Kulhalli, senior vice-president (retail and marketing) at Tanishq, told FE. “As a pan-India jewellery brand, we have seen the emergence of a trend in our stores, predominantly in the northern and western regions of India, where people are buying jewellery instead of coins,” said Ramesh Kalyanaraman, executive director at Kalyan Jewellers.
Rajiv Popley, director at Mumbai-headquartered Popley Group, said: “Our sales have been quite brisk. We plan to keep outlets open at least until 12 am so that people have enough time for purchases after coming back from office. People, who had been deferring gold purchases in the last 2-3 months, are back in the market. Both footfall at our outlets and sales are better than Dhanteras last year”.
WGC managing director (India) Somasundaram PR said although people have not resorted to a mad rush at jewellery outlets to buy this year, as they used to in the good old days for the precious metal in the country, the purchases of gold are still better than last year. “Gold, as an asset class, is still at the top of people’s mind. Demand seems to be better in urban India than rural areas,” he said.
However, jewellers in rural areas witnessed tepid growth in sales, thanks to a drop in rural disposable income following a second straight year of deficient monsoon.
Online purchases of gold items, too, saw a spurt. “Our sales jumped almost four times from a year before, albeit on a small base. Interestingly, we saw a huge spurt in demand for men’s jewellery, including bracelets, this year,” said Vishwas Shringi, founder of voylla.com, a leading online jewellery store.