Faced with a sharp decline in jewellery sales in the July-September quarter, jewellers and their representative trade bodies are trying hard to bring the segment back on track.
City-based jeweller Tribhovandas Bhimji Zaveri (TBZ) has introduced 24-carat (pure) gold jewellery in the country. The machine-made gold jewellery would be slightly expensive due to a 10-15 per cent extra making charges over investment products. These products enjoy less than one per cent of additional melting charge over the prevailing gold price. It would serve as a substitute for investment products like coins and bars.
“Pure gold jewellery has been more popular in China. We will support all efforts to boost overall gold sales globally,” said Ajay Mitra, managing director, World Gold Council (WGC).
| TO DRAW BUYERS |
| * TBZ introduces 24-ct gold jewellery in India |
| * Buyers scared with purity claim |
| * The firm seeks ‘Letter of Authenticity’ from WGC |
| * GJF to invest Rs 100 crore on promotion |
| * Efforts made to arrest fall in jewellery sales |
Being introduced for more than a month, 24-carat gold jewellery has found no takers. This indicates that the Indian mindset focuses on gold jewellery made by mixing other metal alloys, including copper, to provide hardness in raw gold.
Until now, 22-carat hallmark jewellery items are the most popular. Investment products in tamperproof packets, accompanied with the issuer’s certificate, however, are sold freely across the country.
Understandably, TBZ has approached the WGC to issue a “Letter of Authenticity” to assure buyers’ confidence towards 24-carat gold jewellery items.
Consumers’ attraction towards gold jewellery would help get 100 per cent resale value. Repeated efforts to get details about this jewellery from TBZ elicited no response.
However, Bachhraj Bamalwa, chairman of the apex domestic trade body All India Gems & Jewellery Trade Federation (GJF), said, “Only a certain type of jewellery can be made through machines in 24-carat. India is known for value additions, with intrinsic hand-made jewellery designs.
Pure gold jewellery would fetch 100 per cent resale value of jewellery items besides the benefit of using them as ornaments which is not available for products like coins, bars and exchange traded funds (ETFs). Once accepted by consumers, they would also be used as a substitute of investment products.
Indian consumers have a special attachment with gold ornaments and hence, sale of jewellery have been very popular from generations. Recently, well-known investment products, however, witnessed a rapid sales growth due to their low base. Jewellery might see such growth in the coming months, added Bamalwa.
According to WGC, jewellery sales recorded a decline of 26 per cent at 125.3 tonnes in the third quarter of the current calendar year against 18 per cent at 78 tonnes of fall in investment products. The overall gold sales in the third quarter, 2011 dipped 23 per cent in India at 203.3 tonnes.
“The biggest worry for the industry is the fall in jewellery sales. The growth in the sales of coins and bars will benefit only miners which the country is not known for. India is famous for value additions where jewellery artisans play a major role. Hence, we need to promote jewellery sales instead of coins and bars,” said Sanjay Kothari, vice- chairman of the Gems & Jewellery Export Promotion Council.
The council is planning to tie up with GJF to promote jewellery sales in India. GJF, in turn, has chalked out an investment of Rs 100 to promote overall gold sales in the country with special focus on jewellery items. The investment is proposed to be borne by individual jewellers. It will also organise seminars to accelerate direct customer access.
“The idea is to reach customers directly to understand their observations,” said Bamalwa.
The federation is working out to introduce promotional scheme in line with ‘Lucky Luxmi’— a successful gold sales scheme introduced between 2006-08 accompanied with lottery draw or ‘buy gold get something’ type to boost domestic sales.
