There isn’t enough glitter for gold this festive season, thanks to the rising prices of the precious metal. Dhanteras, which comes two days before Diwali, is considered auspicious to shop for gold and gold jewellery. However, jewellery stores are barely seeing any customers this year, compared to the previous years.
From Dhanteras last year, gold prices have increased significantly to over Rs 39,800 per 10 grams. As of 10 am on Dhanteras (October 25) this year, the price of 10 grams of 24k gold is Rs 39,800 in Mumbai, Rs 39,900 in Hyderabad and Rs 39,920 in Bengaluru and Chennai.
This makes it one of the costliest Dhanteras, with customers having to spend over 20% more for gold as compared to last year.
Rising prices combined with higher import duty and the slowdown in the country has led to dampened sentiment among people. Several jewellers that TNM spoke to said that they expect sales to fall by anywhere from 30-60% this festive season.
According to a jeweller in Mumbai, there is hardly any demand for gold this year. This, he says, is predominantly because of the rising prices of gold. “This festive season, prices are really high. I don’t think any middle-class family will want to invest in it right now. Gold is the last priority for families. After clothes, good food and everything else, they might think of gold, if required. Money flow also has been affected due to the slowdown and incessant rains that have continued till now are also stopping people from getting out and shopping,” he adds.
He expects sales to be down by 50-60% as compared to last year.
However, larger jewellery stores, such as Tanishq, PNG Jewellers, among others, are still upbeat about this festive season.
Sandeep Kulhalli, Senior Vice President, Retail and Marketing, Jewellery Division, Titan Company Limited, says that there has been a positive sentiment seen amongst the consumers as everyone is gearing up for Dhanteras. “The government’s recent announcement on bonus will also help boost sales this year. Weddings continue to be the big-ticket purchase and we are receiving positive reactions with our latest Diwali collection. This year we have opened a good number of stores and we’re looking forward to see walk-ins in our new as well as in our existing stores,” he adds.
According to PNG Jewellers, lighter jewellery is seeing more demand this festive season, with customers going for lower ticket purchases on the back of the economic situation in the country. But Saurabh Gadgil, MD of PNG Jewellers, says that this is being compensated by a higher footfall in stores.
Kalyan Jewellers is pinning its hopes on the Diwali and wedding season for the buying sentiment, which was impacted by steep prices, to improve.
According to Pankaj Khanna, MD and founder of gemstone store Gem Selections, gold sales this year is expected to increase despite the fact that it will be more expensive this Diwali than last year.
“Gold is considered the best investment choice as the realty and stock market are down. On a macro level, we are expecting 50% more sales during Diwali than last year due to the increase in our retail & e-retail footprint and branding,” he adds.
Rupesh Jain, founder and CEO of online jewellery store Candere.com, says that he is very optimistic for Dhanteras sales. While increase in gold rates and slowdown in the economy have dampened sales, he says that demand and buying intent had dropped in August and September, but they are seeing an increase in demand in the month of October.
Offers and discounts galore
In a bid to attract customers, several jewellers are offering discounts and running special festive campaigns this Diwali.
Tanishq, which launched its pre-festival campaign ‘Dua ka Sona’, is offering a flat 2.5% off on selected jewellery and 7.5% off on making charges. Titan’s online jewellery arm, Caratlane, is offering 25% off on diamond jewellery.
Kalyan Jewellers has launched several Diwali offers, including giveaways in the form of 3 lakh gold coins to customers.
Joyalukkas has launched a ‘Diwali Mega Gold Fest’ where it is giving customers 200 mg of free gold coin on gold jewellery purchases worth Rs 50,000 and above. And 1 gm free gold coin on purchase of diamond or uncut diamond jewellery worth Rs 50,000 and above. It is also offering 20% off on making charges for gold jewellery.
Senco Gold & Diamonds has launched a Dhanteras Dhanvriddhi festival, where it is offering Rs 600 off on gold, diamond and platinum jewellery on purchases of or below Rs 20,000, and Rs 1,900 off on purchases above Rs 20,000.
Candere has launched #BudgetWaliDiwali campaign on digital platforms to encourage budget buying. They are running a special Gold Rate protection scheme and are also offering 18-60% off on making charges and 2% off on gold coins.