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Indian Jewelers Record Rise in Festive Season Sales
Nov 20, 2012 7:10 AM
By Dilipp S Nag
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RAPAPORT... Indian jewelry retailers experienced an increase in festive season sales leading up to Diwali and they expect this trend to continue due to the ongoing wedding season. Dhanteras, an auspicious day for gold purchases in India, fell on November 11 this year, while Diwali -- the festival of lights – was celebrated on November 13.
“This Dhanteras, Gitanjali witnessed a surge of almost 45 percent in diamond jewelry sales and 30 percent jump in gold jewelry sales both in terms of volume and value, largely from the eastern, northern and western regions of India,” said Mehul Choksi, the chairman and managing director of Gitanjali Group. “Brands such as Gili, Nakshatra, Asmi and D’damas delivered strongly with excellent sales in modern retail formats.”
Choksi noted that rings, earrings and pendants were the most popular categories sold this festive season. “The reason has been primarily because of the festive season being close to the marriage season, people have combined their jewelry purchases for these occasions,” he explained.
Divyesh Shah, the group head of retail business at Tribhovandas Bhimji Zaveri (TBZ), stated that footfall was quite positive not only during Dhanteras but a few days prior to that occasion and the jewelry sales volume also saw significant growth. Demand for gold coins, however, was muted as compared with jewelry, he noted.
“The jewelry demand has been growing, which indicates that the wedding shopping has started and it’s a long wedding season this time so we believe that sales will further pick up going forward,” Shah said.
Bachhraj Bamalwa, the chairman of All India Gems and Jewellery Trade Federation (GJF), said that the jewelers’ expectation was lower as the consumer sentiment was weak due to higher gold prices, global and domestic economic situation but various incentives offered by retailers helped increasing the business. He noted that jewelry sales were better than gold coin sales this time.
“There is an increase of about 35 percent to 40 percent in sales in value terms, while volume also increased,” Bamalwa stated. The demand remains good for lightweight jewelry, he added.
Siddharth Mehta, head of corporate communications at Rajesh Exports Ltd., noted that the consumer demand was better than last year during the Diwali period and the company recorded a sales growth of around 50 percent to 55 percent in gold and jewelry. The Bangalore-based company retails its jewelry under the SHUBH Jewellers brand in the southern Indian state of Karnataka.
Mukesh Kothari, the director at RiddiSiddhi Bullions Ltd., stated that gold sales increased by 30 percent to 40 percent from last year by value as precious metal prices increased to about $590 (INR 32,000) per 10 grams this Diwali from about $460 (INR 25,000) per 10 grams last year.
Kumar Jain, the vice president of the Mumbai Jewellers Association, said that jewelry sales grew about 30 percent by volume as consumers accepted the current gold price levels. There was also demand for diamond jewelry, with smaller diamonds in lower color and clarity stones doing well, he noted.
“I am looking to buy diamond jewelry with a fascinating design. Budget is not an issue for me,” said Shilpa Jain, a housewife shopping in the Mumbai’s Zaveri Bazar -- a focal point for the city’s jewelry trade.
The National Stock Exchange (NSE) reported that the total traded value in gold exchange traded funds (ETFs) rose 110 percent year on year to $242.6 million (INR 13.37 billion) on Dhanteras, the highest ever traded value on a single day in gold ETFs. The exchange noted that gold ETF units worth 4,441 kilograms were traded on Dhanteras, up 81 percent from last year’s levels. Each unit of ETF is equal to a gram of gold.
The NSE has conducted a special trading session in gold ETFs for investors on Sunday on the occasion of Dhanteras between 11:00 am and 3:30 pm IST. Last year, Dhanteras was on a working day and investors were allowed to trade until 8 pm IST.
Trade officials said that the outlook remains positive for the coming months due to the ongoing wedding season in India, the world’s largest gold jewelry market. “The wedding season that started in November is spread out until July next year and we expect good business in the coming months,” Jain said.
* Note: All data was published in rupee. Any references to U.S. dollar amounts were made according to exchange-rate conversions by Rapaport News.
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Tags:
Bachhraj Bamalwa, Dhanteras, diamond, Dilipp S Nag, Diwali, Festival, Festive, Gitanjali, gold, India, jewelers, Kumar Jain, retailers, TBZ, wedding
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