Economy

Jewellers bet on innovation to attract buyers

Suresh P. Iyengar | Updated on March 12, 2018

The progress of monsoon in July will play a key role in deciding the gold demand in the second half of this year.

bl14_msoon_gold.eps

Silver tends to be more vulnerable than gold to lacklustre monsoon. In recent years, investment in gold in the form of bars and coins has risen to make up for slower jewellery sales.

Poor monsoon and high prices may water down gold demand, particularly when jewellers are gearing up for the busy festival and marriage season starting next month.

Mr Prithviraj Kothari, President, Bombay Bullion Association, said that the progress of monsoon in this month will play a key role in deciding the gold demand in the second half of this year.

“The demand will come in only if the prices remain below Rs 30,000 for 10 gm,” he said.

Right opportunity

Even as investors are waiting for the right opportunity, consumers are setting aside a fixed amount every month to beat the volatility and grab the yellow metal for the precious occasion.

Mr T.S. Kalyanaraman, Managing Director, Kalyan Jewellers, said that the demand for gold jewellery remains strong despite the price volatility.

“There is always depreciation in whatever you buy, be it your favourite mobile or automobile. But your investment in gold will only appreciate, more so when you are buying for special occasion like festival and marriage,” he said.

According to various industry estimates, over 10 million marriages are conducted every year. On an average, 40 gm of gold jewellery is used in every marriage. Nearly, 70 per cent of gold jewellery sales are logged in during the wedding and festival season.

Ms Sharada Shrikant, who is preparing to conduct her daughter’s marriage in two years, more than agrees with Mr Kalyanaraman. She recalls the hardship taken to cajole her husband to invest Rs 5,000 a month in a scheme floated by a jeweller near her house in suburban Mumbai.

“My husband always says gold is a dead investment with no sizeable return, but marriages in India are not solemnised without gold,” said Ms Sharada who is employed in a private enterprise.

Innovative schemes

Lending a helping hand, jewellers are launching innovative schemes to inculcate the habit of regular investment in gold. GRT Jewellers, one of the largest in the South, has come up with ‘GRT Golden Seed'.

In this scheme, a quantum of gold equivalent to the monthly deposit is credited to a customers account at the prevailing rate. It enables investors to buy grams of gold every month instead of buying at the end of maturity. This helps protect investment from fluctuating gold prices. As an incentive the jeweller foregoes wastage and making charges, besides footing the value added tax on behalf of customer. The scheme had attracted Ms Radha Murali, a home maker in Mumbai. She deposits Rs 3,000 a month in a bank account provided by the jeweller and gets a confirmation email indicating the quantum of gold allotted within four days.

Similarly, Kalyan Jewellers has monthly saving scheme where the company pays incentive of two to four months instalment depending on the investment period.

Kalyan had registered a turnover of Rs 9,435 crore last fiscal and expects it touch Rs 16,000 crore in FY’13. Unit-wise sales increased five per cent last fiscal. After establishing its base in the South, Kalyan Jewellers is planning to open eight outlets in the Northern and Western regions by end of this fiscal.

Published on July 15, 2012

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

null
This article is closed for comments.
Please Email the Editor