Anmol Jewellers Diwali: A Commercial SucceSS Despite the slow economic pace, high inflation, and steep gold price, Indian buyers didn t ditch the yellow metal this Diwali. Sales rose and market sentiments improved to help retailers brace up for the upcoming wedding season. Shanoo Bijlani and Aliya Ladhabhoy report. 60
INFOCUS There was nervous tension in the air as jewellery retailers, who had pinned their hopes on Diwali- Dhanteras sales this year, wondered if consumers would stay away or embrace the yellow metal as it refused to budge from the R30,000-plus slab. Surprisingly, retailers saw a spurt in demand, and most consumers stuck to lightweight gold or diamond jewellery, and veered towards gold medallions and bars. Heavier sets were generally restricted to bridal sales. However, it was reported that overall sales declined as compared with last Diwali. Some traders believed that since buyers were expecting the metal prices to escalate to R35,000 or so in the coming months, it helped in boosting sales of gold across the country to some extent. Prosanto Chandra, joint managing director, P. C. Chandra Jewellers, Kolkata, commented, Gold has reached the R30,000-plus mark and has stayed there for a while now. This has helped repose customers faith in the metal both from the investment and adornment point of view. Customers have realized that gold prices will only head northwards and hence it is the right time to buy it. Mohit Kamboj, the newly elected president of the Bombay Bullion Association, rightly predicted before the Diwali season that gold demand would increase by 20-25% in comparison with the previous quarter this year. He also observed that demand for jewellery has been gradually reducing and jewellerybuying is becoming a need-based and occasion-driven event. The trend has been shifting towards investing in gold medallions and bars. We still have the marriage season ahead and I expect the demand to rise at the same rate as it did during Diwali, he said. High gold prices and steep customs duties on gold import; a weakened rupee; high inflation and slow economic growth are some of the main reasons for the slackening demand, Kamboj said, adding that the overall gold consumption for the year could drop by 43-45% to 550-600 tons as compared with 970 tons in 2011. Gold prices in rupee terms have gone up four times since the last six years, and hence, have spurred investors to opt for medallions as it provides them instant liquidity without having to incur a loss on labour charges or wastage as is the case with jewellery, elaborated Kamboj. White most urban markets gave weightage to design and opted for gem-set lightweight jewellery, traditional buyers purchased slightly heavy jewellery even for daily wear purposes, Kamboj stated. Diwali didn t disappoint Diwali, the mother of all festivals, especially for buying jewellery, received average to good grades on the sales report card. From eastern India, Prosanto Chandra of P. C. Chandra Jewellers noted that the company saw a double-digit growth this season, and did not see any major shift in terms of customer demand. Gold still remains the favourite choice of customers, and 22-karat jewellery contributed the maximum in terms of value to our sales. We also saw a substantial growth in 18-karat gem- and diamondstudded jewellery, Chandra said, adding, Customers today are looking for wider choices, new and differentiated designs but at the same time they also want an element The overall gold consumption for the year could drop by 43-45% to 550-600 tons as compared with 970 tons in 2011. Mohit Kamboj Azva by WGC 61
Kashi Jewellers Azva by WGC of traditional concepts. For instance, the two essential crafts used in jewellery designing in Bengal are meenakari and filigree, and customers look for new patterns within these crafts. So, our focus has always been to blend traditional and contemporary elements in our designs. As a market leader in the east, our focus is on offering value-added products where customers can get designer jewellery crafted skilfully by our craftsmen. Siddharthaa Sawansukha, chief executive officer of Sawansukha Jewellers, Kolkata, stated that a festival associated with auspicious buying of jewellery marks a higher level of sales than in the rest of the year. Diwali has always lured people to indulge in luxury, especially jewellery. The price of gold no longer acts as a deterrent, believed Sawansukha, but it just may alter the buying decision of a customer. Customers put their jewellery purchases on hold till Diwali because of the fluctuations in gold prices in the last six-seven months. And this year was no different for the retail house, which witnessed an increase in sales during the peak jewellery-buying season with diamonds contributing 60% of the total sales vis a vis 40% sales in gold jewellery. Traditionally, customers always bought plain gold jewellery, but this year more and more buyers wanted antiquefinished gold pieces and jadau jewellery with coloured gemstones. Jhumkas, cocktail rings and fusion jewellery sold like hot cakes. Designs drove sales and customers today are not hesitant to try out contemporary patterns. If designs are appealing, budget inevitably takes a back seat, said Sawansukha, adding, We are the 2.0 generation, and retailers face stiff competition in order to survive as we cater to informed and educated customers, who are spoilt for choice. Gone are the days when one could rely only on word-of-mouth publicity. Today, in order to make our brand presence felt, we resort to multiple channels like personally delivering invitation cards to all our customers, making personal calls, and sending SMSes and emailers; 62
advertising in print and outdoor media such as hoardings and kiosks, Facebook and more. Rahul Singh, retail and marketing head, Gaja Jewellery, a brand of Shree Ganesh Jewellery, Kolkata, informed that their firm, too, engaged in marketing and promotional activities through print and electronic media; emails and telemarketing services to boost sales. We saw a 75% jump in sales as compared with the previous season, Singh stated. Considering the firm s competitive price points and ongoing discount offers, we were expecting a higher consumer response. But we are not complaining. In the north, sales dipped and D. D. Karel, proprietor of New Delhi-based N.M. Karel & Sons, revealed that he witnessed a downtrend this time around. Sales were around 40% less as compared with the previous Diwali season, he noted. A drop in sales was expected and I also got a similar feedback from several associates and fellow traders. However, bullion sales in the form of coins and bars stayed healthy, witnessing the same kind of trend like last Diwali. Customers today are hesitant to buy gold, and prefer recycling old gold, or spending a small amount on altering their old pieces. According to Karel, buyers this time preferred Indo-Western motifs accented with diamonds or coloured gemstones. A fraction of his customers also demanded 14-karat diamond jewellery, but a majority of them still prefer the traditional 22-karat yellow gold jewellery. Silver jewellery is back in fashion especially among youngsters, he stated. Promotions help In the run-up to the festive and wedding seasons, the World Gold Council (WGC) had unveiled the Azva bridal collection and promoted it aggressively through various media channels. N.M. Karel & Sons was one of the eight manufacturers handpicked by the WGC to design the Azva line. Did the promotions by the WGC help in increasing sales? Definitely! It has created a buzz in the bridal segment, and generated curiosity among buyers. Orders were booked by retailers during the India International Jewellery Show in August, and deliveries have already started. If the WGC and the associates sustain their promotional efforts, I am sure it will push bridal sales further. Retailers are definitely looking to add variety to their bridal offerings, which we think, has been neglected for quite a long period, and that is where this initiative has helped fill the void. Most brides are choosing lighter necklace sets, with matching wrist wear, basically reflecting the tradition, but that will pair well with modern ensembles. Holding a jewellery fashion show just before the start of the Navratri festival is one of the ways of spotlighting on jewellery, believes Anil Talwar, managing partner of Talwarsons Jewellers and cochairman of FICCI s Gems and Jewellery committee. He informed that although his firm promotes his brand regularly through print advertisements throughout the year, fashion shows gives the firm a lot of mileage and press coverage, which later draws customers to his showroom. Diwali sales were encouraging this year with around 18% rise in value terms as compared with the same period last year. This was a little lower than the average growth we have seen in the last comparable 20 Diwali seasons. But still I am satisfied with the outcome, Talwar commented. During this jewellery-buying season, the gift-buyers are the most price-conscious as compared with selfpurchasers, who wear jewellery for social approval or buy jewellery for auspicious reasons, explained Talwar. And although gold is still the metal of choice for the bridal segment, there has been a gradual shift towards diamond jewellery, and its share in the total percentage of jewellery sales is increasing year after year. But barring the bridal segment, a lot has changed in the last decade, Talwar noted. Indians are socializing and clubbing a lot more than they used to earlier. As a result, fashion and accessorizing trends, too, have evolved. Women prefer more of fusion and cocktail jewellery. Statement rings and INFOCUS Siddharthaa Sawansukha D. D. Karel Anil Talwar 63
Ajit Gadgil Anmol Jewellers Kashi Jewellers Ishu Datwani Ariez Tata chandeliers are creating waves in the party circuit, and is, in fact, the fastest growing category of jewellery in our showroom. Other occasions like anniversaries and birthdays are also driving jewellery sales like never before as people now do not shy away from big time celebrations to mark the milestones in their lives. In the western region, Ajit Gadgil of P.N. Gadgil & Sons, Pune, was pleasantly surprised to see sales gaining momentum during the festive season because prior to that the market was sluggish. Pointing at a 15-20% increase in comparison with last year s sales, Gadgil noted that weight wise, the preferences were the same as last year, and most traditional buyers opted for slightly heavy jewellery. Buyers, with an eye on investment, chose 22-karat plain gold jewellery, while those who made token purchases to mark the auspicious occasion were more design-driven, and selected gem-set, 18-karat jewels. As for the sale of gold coins, the retailer saw an increase by 25% this year. Ishu Datwani of Anmol Jewellers, Mumbai, reported awesome sales better than what he had experienced last year. Datwani saw a surge in demand for heavier sets ranging between R1,00,000 and R1,50,0000, studded with bigger diamonds and fancy cuts. Buyers preferred contemporary earrings and broad bracelets. The couture retailer sold more jewellery than gold coins this season and he engaged in heavy promotions through print and social media before and during Diwali, with an assured gift for every purchase of jewellery. No matter what the rate is, those who want to buy designer jewellery will certainly buy it, he concluded on a confident note. According to Ariez Tata, managing director of Nascent Jewellery, the overall jewellery sales in Maharashtra was to the tune of around R750 crore during Dhanteras. Our company saw a huge shift in demand for lightweight jewellery as compared with the last year. The contemporary designs were most preferred by the people. Our sales increased by 15% this Diwali. Rings and earrings were the two most preferred items of purchase followed by pendants, necklaces, bracelets, chains and bangles, Tata said. At Nascent, 25% of the overall sales came from medallions. Shantibhai Patel president of the Gem and Jewellery Trade Council of India and the Jewellers Association Ahmedabad, said that although there has been an overall decline in demand this time, diamonds were racing ahead of gold. Last year, diamond jewellery saw a 15% growth 64
INFOCUS in Gujarat, but this year it rose by only 10%. Gold demand declined by 10-15%. Lightweight jewellery and gold-plated jewellery saw a larger demand, especially in the middle-class segment. Bullion sales were robust, and diamond and gem-set jewellery saw the maximum demand. Diamond jewellery in the region was heavily discounted with retailers offering discounts on making charges. It was mainly diamonds over gold jewellery all across the country, but the southern region saw gold being favoured over gemstones. Princeson Jose, chairman and managing director of Prince Jewellery, Chennai and regional chairman, southern region, GJEPC, informed that a week before Diwali, jewellery sales were robust, but once the price of gold scaled up, sales fell. Business has been slow post Diwali. Gold jewellery saw a greater demand as compared with diamond jewellery. Chains, bracelets and lightweight bangles saw brisk sales, and with the wedding season having just begun, bridal jewellery consisted of a considerable portion of our sales. Old gold exchange schemes aided sales this time, he noted. Mathai P.E., CEO, Muthoot Precious Metals Corporation observes that in India, gold can never lose its popularity. "It is seen as a 'wealth preserver'; the yellow metal is an investment option during economic crises, and people have a sentimental attachment towards gold due to its ancestral value. Moreover, we have been seeing a considerable increase in investments in gold coins and bars and looking at the increase in the gold rate, we believe that the same will continue in the coming years." Tapping netizens In the world of social media marketing, the means of attracting customers to buy jewellery online are slightly different. To make the online experience more personalised, JewelsNext.com, an online jewellery selling platform established in October 2011, introduced a virtual jewellery lounge where a customer could try out over 100,000 certified jewellery pieces by uploading her photograph and checking what would suit her best. Gaurav Issar, chief executive officer of JewelsNext.com, said that he promoted the portal through a combination of online and offline campaigns from social media to sponsoring festivals and prizes on all visible celebrations of the festivities to grab eyeballs and increase sales. Most of the buyers were from metros and tier I cities, who made purchases between R500 and R75,000. Issar noted, It will take a while for people living in smaller towns to go online to buy jewellery. Diamond jewellery was a clear winner this season. Buyers opted for lower karat gold in comparison with goldplated silver jewellery. Issar informed that both discounts and a large inventory played an important role in driving sales. We are also working on building a new media distribution channel for retailers who are looking at gaining a pan India presence and sales opportunities. The major challenge we faced was to convince conservative vendors to sell their products online through us. Now that we have crossed that hurdle, we are expecting better sales volumes in times to come. Abhimanyu Lal, head category management, ebay India, informed that this festive season consumers bought more of diamond jewellery instead of traditional gold jewellery. Jewellery sets followed by earrings sold the most this time on ebay. Kundan and meenakari sets were most popular. Gold-plated jewellery was in significant demand, and items such as bangles, jewellery sets, necklaces, bracelets, rings and pendants sold well. Although the outlook for the festive season didn t seem positive initially, Diwali sales, even if they were a middling fare for some, helped markets to gain momentum. Retailers who offered value-based additions in terms of design, discounts and a good shopping experience found the sailing smooth. Overall, the trade can now breathe a collective sigh of relief as pricey gold didn t dampen the festive spirit. Shantibhai Patel Gaurav Issar TMJ 65