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Diwali Jewelry Sales Rise on Lower Gold Prices
Nov 8, 2016 11:04 AM
By Rapaport News
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RAPAPORT... Jewelry
sales in India improved during the Diwali festival as lower gold prices helped
release months of pent-up demand.
Retail activity increased year on year during the period which includes
Dhanteras on October 28, a gold-buying festival, and Diwali on October 30,
market observers noted. This followed a sluggish spring and summer season that
were hit by a six-week strike in March and April as many jewelers shut their shops
to protest a new 1 percent excise duty.
“For almost six months there was a critical situation in India because of
excise and other factors,” said G. V. Sreedhar, chairman of the All India Gems
& Jewellery Trade Federation. Gold prices increased 22 percent between January and September,
according to Kitco, causing consumers to refrain from buying, while the loss in
workdays during the strike also contributed to lower jewelry sales.
However, sales
jumped as much as 25 percent compared to Diwali last year, Sreedhar estimated, with
the improvement strongest in the North, West and East of the country. Sales
grew an estimated 10 percent to 15 percent in southern India, which is more
focused on the Akshaya Tritiya festival, which fell on May 9, he explained.
Tanishq,
one of India’s largest jewelry brands, grew 39 percent between Dussehra on
October 11 and Diwali, reported Bhaskar Bhat, managing director of Titan Company,
which owns the brand.
Gold
prices dipped 3 percent to $1,272 per ounce in October which jewelers were able
to pass on to consumers by lowering retail prices, Sreedhar said. A plentiful
monsoon season in India’s largely agricultural economy also put a spring in
shoppers’ steps, he explained.
As gold sales recovered during the season, diamond
sales also improved as consumers bought studded jewelry along with their
precious-metal items, Sreedhar noted. "Wholesalers are seeing good orders from
the retail end," said Pratik Shah, a partner at Starrays, a Mumbai-based manufacturer
and supplier of solitaire diamonds from 0.30 carats to 5 carats.
The emphasis on diamond sales was more on rings and lower-quality solitaires below
0.50 carats, which recorded better sales than higher-value items, Sreedhar
added.
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Tags:
Akshaya Tritiya, All India Gems & Jewellery Trade Federation, Bhaskar Bhat, Dhanteras, Diwali, festive season, G. V. Sreedhar, GJF, holiday season, India, Jewelry, Pratik Shah, Rapaport News, Starrays, Tanishq, Titan, Titan Company
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