Platinum missed the current rally in precious metals, with the price remaining range-bound due to surplus output forecast by London-based independent consultancy GFMS. The move helped narrow the premium over gold and led to more demand for the metal from aspirational jewellery consumers, Platinum Guild International UK Ltd CEO James Courage tells Dilip Kumar Jha. Edited excerpts:
How has the global economic environment affected platinum jewellery consumption in India?
The global financial crisis has narrowed platinum’s premium versus gold, which had helped consumers to own a piece of platinum jewellery in their basket. In fact, jewellery consumers are now more attracted towards platinum with its premium over gold narrowing due to relentless price increase. In the last couple of years, the price increase in gold has helped createawareness towards platinum in the inherent gold-focused Indian market. This has started yielding result now, with opulent consumers shifting gradually towards platinum. Consumers are looking at a particular type of platinum jewellery for gifts. This has increased overall sales, evident through the increase in the number of retailers across the country.
What are the constraints in owning platinum jewellery?
There are some physical constraints on the amount available for sale. Availability of the metal at consumers’ doorstep is a major constraint. Platinum jewellery is currently available with very select jewellers across the country. Many remote jewellers have evinced interest to expand their business in platinum jewellery also. So, the availability is expected to ease in the months to come. Gold has historically some relationship in the form of money, which has never been with platinum. The white precious metal has store value other than ornamental use and the value has increased periodically.
Do you see any change in consumers’ aspirations?
Yes. Consumers have started taking advantage of the negative premium, which they feel may not last long. Hence, a significant boost in retailers’ business has been reported which directly indicates that consumers aspiration is currently inclined towards platinum. Platinum jewellery retailers have started looking at a particular occasional collection like bridal to boost their sales. There is an aspiration among consumers to have at least one piece of platinum jewellery in a collection of jewellery items. Platinum jewellery has become an additional choice for aspirational jewellery consumers who look to own another pure and natural metal. I do not see any significant increase in investment demand as witnessed in gold.
India’s platinum consumption is very low. How are you going to intensify that?
Platinum consumption is estimated at around one per cent of gold use in India, which works out to nearly 10 tonnes. The two precious metals cannot be compared. We are providing consumers another choice. We have engaged jewellers who are far better placed to know the customers’ choice in platinum. We get a lot of anecdotal stories from retailers, especially to develop new designs for specialised customers. There has been a momentum in the market due to which more consumers are leaning towards platinum. Consumers who buy, talk with their friends about it, which results in multiplying sales.