Jewellers offer incentives to beat slowdown in sales

The absence of festivals and weddings has hurt sales, even as farmers are holding off on encashing gold for seeds and fertilisers due to a delayed monsoon

Jewellers have adopted a different model of business to beat the ongoing slowing in sales this season, due to the absence of festivals and weddings.

Normally in this season, farmers encash gold to buy seeds and fertiliser for kharif sowing. Faced with deficient rain in the previous two seasons and a monsoon delay this season, farmers are keeping their fingers crossed, resulting in a big decline in custom at jewellery retail stores.

Unlike earlier when jewellers used to offer discounts in making charges, they have started offering an increase in the value of jewellery sales. For instance, city-based jewellery manufacturer and retailer Tribhovandas Bhimji Zaveri has introduced an additional sale value worth five per cent for gold and 10 per cent for diamond jewellery in exchange for old gold. For example, if a a customer brings old gold worth Rs 100,000, he can buy gold jewellery worth Rs 105,000 or diamond ornaments worth Rs 110,000.
 

 

“Earlier, we used to offer discounts in making charges. Almost all large jewellers offer these. So, we changed the offer with a higher value of gold and diamond jewellery against old gold. This will increase the flow of internal gold without banking on its procurement from banks,” said a senior TBZ official.

TBZ has also introduced lighter weights of jewellery with innovative designs, to ensure against a major impact on customer pockets with the rise in government levies. There has been an industry-wide slowdown with the government’s decision to make jewellery hallmarking mandatory, beside levy of excise duty on gold jewellery. The sentiment was weak in the sector over the two years since the import levy on gold was raised to 10 per cent.

Another city-based jeweller, Popley and Sons, offers diamond jewellery equivalent to the making charges on gold ornaments. “There has been a sharp increase in consumers’ footfalls, nullifying the impact of industrywide slowdown,” said Rajeev Popley, director.

Bengaluru-based C Krishna Chetty & Sons has reoriented its in-house sales and administration. Rajesh Exports has introduced lighter jewellery of lower caratage.

“We have introduced a ‘value for money’ concept, through lighter weight and new design of jewellery. Because of this, we have not witnessed any slowing in jewellery sales,” said Rajesh Mehta, managing director, Rajesh Exports.