The risk-averse psyche has reared its head among investors recently and the gold price is having a bull-run, both in the domestic and global markets, as a result of that. Economic volatility at the global level and the sliding valuation of the rupee have made the gold price zoom past the Rs 32,000 per 10 gram mark. Such a spike in the gold price, according to a section of analysts and market observers, might spook and scare away the festive buyers.
But given the cultural and socio-economic significance of the yellow metal in our country, consumers are not going to stay away from the market this festive season. Jewellers understand that fact more than anyone else. According to the World Gold Council (WGC) report, gold imports shot up by 39 per cent in June and July to 160 tonnes from 134 tonnes during June-July in 2017. A major share of that imported gold has definitely made its way to jewellery manufacturing. The numbers reiterate that the trade sentiment is quite robust ahead of the festive season. As the demand was quite restrained in April-June, the market is expecting a release of that pent-up demand in the coming festive season.
Jewellers across the country have replenished their stocks based on that optimism, defying the price-rise premonition. But achieving higher conversions is a different ballgame and jewellers will have to truly pull up their socks. It’s fact that the gold has rediscovered its safe-haven pitch, thanks to various economic turmoils. But to leverage that edge to improve jewellery sales figure, jewellers have to work on their marketing and promotional strategies. As the retail business has entered the decisive phase, time has come to raise the promotional pitch to break the festive marketing clutter. A special effort is required from jewellers if we aim to reach or surpass the annual sales projections of Rs 2,772 billion.
A mix of exceptional craftsmanship and assured investment value in the promotional narrative will not only attract the consumers to gold jewellery this festive season but also motivate them to spend more and carry forward the renewed interest to the wedding season. As jewellery as a product category is competing hard with other product categories such as electronic goods, personal gadgets, vacation packages to claim lager wallet share of the consumer, the retailers should not miss the opportunity this time to present a truly alluring proposition to the consumers.
No matter how much effort other non-jewellery product categories put in to ride the festive wave, Diwali and Dhanteras always belong to jewellery, especially gold. The price rise notwithstanding, consumers will feel that affinity towards gold during the festive season. It’s up to the jewellers to strengthen the consumer traction with attractive offers and transparent business practices. In a way, gold price rise denotes the resurgent demand for the yellow metal, if one wishes to look at things from a different perspective. And jewellers should set things up for the upcoming wedding season.
(The writer is chairman of Malabar Gold & Diamonds)