Jewellers bullish on the festive season
With Diwali just round the corner, the Indian jewellery manufacturer and the retail industry is expecting an uptick in sales. The robust order bookings at the recently concluded events – the India International Jewellery Show (IIJS) and Jewellers Association Show (JAS) and reasonable level of interest in gold observed during Akshaya Tritiya in the second quarter, has also offered consolation to a few. But the moot question still remains – whether the jewellers’ positive sentiment will resonate with consumers? Here’s what the industry insiders predict.
All eyes are set on Diwali sales of 2017. The jeweller community has pinned all its hopes on Diwali sales to recuperate from the setbacks it has suffered due to the government regulations in the past. The industry is expecting that, like every other year, even this time, sales will rise significantly during this season and the momentum will continue till the wedding season.
The World Gold Council (WGC) too has signalled a positive outlook for sales during Diwali 2017. The organisation foresees the gold demand in the second half to be 25 to 30 per cent more than the corresponding period of the last year. “Providing the market adapts to the new GST, we may see solid demand around Diwali. The new GST system should be helpful for gold demand, predicting it will rise to 850 to 950 tonnes by 2020, up from current levels of approximately 700 tonnes,” stated WGC in its gold trend report 2017.
Festival period starting from Ganesh Chathurthi to Diwali accounts for bulk sales and hopeful Prasad Kapre, CEO, Style Quotient Jewellery Pvt. Ltd., shared: “Consumer sentiments are positive and we are expecting good sales on Dhanteras and Diwali. There is huge demand of gold and diamond Jewellery in a country such as India, where ownership of it is the direct reflection of your stature and wealth. Moreover, as per the report of ICRA, the demand of gold jewellery is expected to rise this year by nine per cent. With the implementation of GST, price for organised and unorganised players will be comparable. This means the preference and demand for branded jewellery will be boosted. Thus, we expect good sales this Diwali.”
Even Dharamchand Jain, founder, Supreme Gems and Art International, who deals in rare gems, is positive about the upcoming festival season. “I am witnessing history repeat itself with emeralds coming back in vogue. Apart from gold, which people generally buy, lots of customers are asking for emerald studded jewellery. Besides emeralds, there is an appetite for rare diamonds in various colours too. Yellow and orange diamonds are trending this season. Thanks to these rare gems that we deal in, the sales are soaring at the moment,” he informed.
Effects of GST on festivity
After two slow quarters in terms of sales, this festive season is expected to play a key role in driving retail sales. Moreover, observers believe that buyer sentiment could be positive due to implementation of GST and it may translate into buying activities.
As usual the expectations are high for the festive season but the two things which triggered some uncertainty post the last festive season, which is demonetisation immediately after Diwali last year and goods and services tax (GST) that has followed, pointed out Bhaskar Bhat, managing director, Titan Company Ltd. “We know the effect on the trade and those who have to be GST compliant but in consumers’ minds, there is still uncertainty as to how prices will pan out of various goods. Trade will look up once the GST uncertainties settle down, is the common sentiment among consumers. Therefore, the Diwali outlook is not very clear. Companies will do their promotions individually but together we must encourage consumers. This will benefit especially the organised sector players, as the others are still getting their GST act together,” he added.
According to Kumar Jain, vice-president, Mumbai Jewellers Association and director, Umedmal Tilokchand Zaveri, Mumbai, the 2017 festive season has started on an altogether different and far more positive note. “While structural reforms by ways of demonetisation and GST have helped firm up buyer sentiment, jewellers too have progressively adjusted their business approach in the new era of transparency brought on by GST and are geared up to cater to the pent-up demand for jewellery this Diwali,” he opined.
Since the inception of GST, sentiments have improved immensely and people are much more confident while buying jewellery, updated Aakash Barmecha, creative director, Yoube Jewellery Ltd. “Jewellers have quickly got themselves in tune with GST. Festive season is just about to begin and we are now looking at a much more refined Indian GJ sector. We are expecting this Diwali to push sales by at least 20 per cent over the last year,” he expected.
Rising gold prices
Going by the statistics of the whole year, the gold price has dramatically increased. Despite higher prices of gold compared to the last year, jewellers expect to see higher demand this Diwali. They are of opinion that Indians’ love for gold jewellery and the high investment value of this yellow metal will continue to keep the market peaking upward, as we draw closer to the festive season.
According to Nikita Rattanshi, director, Birla Jewels Ltd., the upcoming festival and wedding season in the country suggests healthy prospects for the jewellery market. “Diwali is a start of one of the golden seasons for jewellers across the country, as purchase of gold, diamond and platinum jewellery reaches optimal level during this time. The consumer confidence is improving and the buying mood is buoyant right now. We have seen an increase in demand in the last few weeks, as Indian consumers are taking advantage of the rising gold price. As a retailer with our presence both, online with ‘CHERISHGOLD’ and offline at ‘BJEWELZ- Birla Jewels’, we are optimistic about a 30 to 40 per cent collective increase in jewellery sales this season,” she revealed.
Just like others, Pramod Mehta, director, Shilpi Jewellers Pvt. Ltd., Mumbai, too is hoping for crackling sales this Diwali. “The demand for gold jewellery will be on a higher side than the last year. The US Federal Reserve Bank has kept the interest rates in check and this will keep the prices stable in the run up to Diwali. Stable prices will positively help retailers to sell more. The consumer interest will generate many big ticket sales. Antique sets, Italian, fancy and platinum jewellery will be in demand during this festive and wedding season,” he predicted.
Talking about the current gold and sales scenario, Pritesh Goyal, ace designer and director of SLG Jewellers, New Delhi, too is counting on the sentimental values attached with gold. “Gold jewellery will again lead the market because people find more options in gold based jewellery. Apart from this, gold offers a great value for money and consumers have better realised it after demonetisation. I don’t think prices will play a major role in the sales during this season. We Indians are gold buff and it is our tradition to buy gold during auspicious occasions such as Dhanteras, Akshaya Tritiya, Diwali, etc. This year too sales will be high as usual and we will see a healthy business,” he hoped.
The insightful views of Ketan Chokshi, owner, Narayan Jewellers, Vadodara, reads: “Diwali is a festival of light and which is why, we Indians like to add more sparkle to it by bringing gold to our homes. It is not the question of price, when it comes to Diwali. There is sentiment attached to the purchase of gold on this occasion. Moreover, the sales graph is on an uptrend. Business sentiments have definitely improved in the last couple of months. So yes, like every year, the fervour of Diwali celebration will have a positive impact on the bottom line across all segments. We do expect sales to increase by 15 to 20 per cent this year on Diwali,” he summed up.
The entire industry unanimously feels that this Diwali, they will have to go a step further to ensure runaway sales. Apart from regular promotions and marketing, jewellers are planning to offer discounts on making charges, flat discounts on diamond jewellery and incentives like gold coins for certain levels of purchase to their customers. Retailers are also concerned with the sale of other lifestyle products like smartphones, tablets, laptops, etc. However, they believe that sale of such products will be a lesser threat than the last year, as there is always a hope of appreciation in terms of gems and jewellery.