Akshaya Tritya marks positive start for jewellers after a slack
The one and a half month strike kept the consumers away from jewellery buying, but Akshaya Tritya celebrated on May 9 was a rejoicing moment not only for consumers but also for jewellers, who witnessed 10-15 per cent rise in footfalls at their stores.
Akshaya Tritya, an auspicious day for gold buying was highly awaited by jewellers with a hope to cover up for their losses incurred during the one and a half month long strike against 1 per cent increase in the excise duty. Though the response was muted as compared to last year’s sales during Akshaya Tritya, jewellers continue to be optimistic about registering good sales by 2016-end.
Few renowned retailers witnessed increased footfalls on May 9, estimated at 10-15 per cent increase in jewellery sales compared to last year. However, there were some jewellers that felt that buying sentiment was weaker than expected, after the 42-day strike against the new excise levy introduced in Budget 2016.
Impact of excise levy
Jewellers have witnessed a 10 per cent growth in jewellery sales on Akshaya Tritya after witnessing a lull period in March and April. “We are getting positive reports from across the country, and the footfalls are also good…southern region is extremely good, while in the north it seems to be similar as last year. Overall we expected about 5-10 per cent growth this Akshaya Tritiya,” All India Gems and Jewellery Trade Federation Chairman Sreedhar G V told Times of India.
Jewellers across the country insisted that industry is getting normal following a 42-day strike against excise duty. Ishu Datwani, Founder of Anmol Jewellers states, “We had a dry month in March because of the strike against excise duty. But, the duty will not impact the sales since the excise duty is only 1 per cent and it is not a deterrent. The problem was never the 1 per cent – it was the book-keeping.” Consumers have been eyeing Akshaya Tritya for jewellery not only because it’s a felicitous day but also due to offers, discounts and more.
Saurabh Gadgil, Vice-president of India Bullion Jewellers Association and CMD of PNG Jewellers adds, “This year the clients have been deprived of gold purchase as showrooms were shut for almost one and half a month. Due to which we have been witnessing increased customers at our stores. The other factors that helped in sales were – the long week-end prelude to Akshaya Tritiya and our strong & aggressive marketing strategy & promotional offers for Akshaya Tritiya.” Anmol Jewellers registered up to 30 per cent growth in sales and PNG had great footfalls across all their stores on Akshaya Tritya. Manubhai Jewellers from Mumbai also registered 10-15 per cent rise in footfalls during the festival. Sachin Jain, President of Forevermark told, “There was a positive demand on Akshaya Tritya, as far as the excise duty is concerned, we don’t see any impact from a consumer stand point.”
Contradicting to above viewpoint, some jewellers believed the buying sentiment was low during Akshaya Tritya compared to last few years on account of issues faced by jewellers due to proposal of 1 per cent excise duty in Budget 2016. Rahul Aggarwal, Director of SRS Jewells said, “The pan India strikes affected the sales during Akshaya Tritya.” According to Ketan Choksi, Owner of Narayan Jewellers the value addition has gone up by 1 per cent to 3 per cent due to excise.
Soaring prices affect gold sales during Akshaya Tritya
Sharp volatility in gold prices was another factor which hit consumer sentiment. It rose `85 per 10g from its previous close to settle at `29,855 per 10g on May 9. “Sales growth is not comparable this year due to bad weather and also Akshaya Tritiya falling on a Monday, first day of the week. Gold prices are high but, otherwise, we are doing well,” told Sandeep Kulhalli, vice-president (marketing), Tanishq to Business Standard. Compared to last year on the day, gold prices have risen 11 per cent.
Delhi-based PC Jewellers also witnessed similar footfalls as last year, but grammage of purchase was low due to high prices as per the reports. “Consumers have reconciled to the fact that the increase in gold prices in the past four months is not a blip and is here to stay,” said Somasundaram P R, the India managing director for the World Gold Council to Times of India. Agreeing to Somasundaram, Aditya Pethe, Director of WHP Jewellers states, “We expect to register 10-15 per cent increase in sales this year. As the gold prices had increased in the previous week, we feel it will reinstate the consumer’s faith into the category.”
Gadgil also agrees to the same and tells that gold prices were well received by the consumers. Aggarwal of SRS Jewells opines differently and says, “Even after jewellers called off their strike, we saw low buying sentiments amongst the people due to rise in prices. This year sales are either expected to remain same or low as compared to last year. High prices will definitely reduce the buying level and we feel that there will tepid sales this year.” Choksi too affirms that sales will not be as good as last year due to increase in gold prices. He adds, “Due to the total price hike of the gold jewellery as mentioned above, the sales in the starting of this financial year are much lower than last year’s but by the end of this financial year we are looking at a 20-25 per cent growth.”
Shift in consumer buying pattern during Akshaya Tritya
The buying trend on Akshaya Tritya has seen a shift from gold coins and bullions to wearable jewellery. While coins have been an all-time favourite purchase during Akshaya Tritya, Datwani noticed that this year nobody was really asking for coins. He said, “Coins & bullions contributed to only 5 per cent of the sales & 95 per cent of the total sales were from jewellery.” Consumers preferred to buy wedding jewellery more as marriage season is still on.
Light weight jewellery also saw good demand according to Gadgil. Narayan Jewellers also launched light weight gold jewellery collection and registered good sales in this category. Sagar says, “Customers are no longer just purchasing bullion on this day but also prefer buying light weight jewellery that is for everyday wear. Which is why, this year we also launched exclusive light weight collection in contemporary designs that received an overwhelming response from the consumers.”
Jain adds, “Akshaya Tritya is an auspicious day to buy something precious and this usually translates into jewellery. While traditionally purchase was always gold and silver, people now tend to buy what they would like to wear rather than just coins. It’s primarily about the consumer preferences and tastes. Nowadays, consumers prefer diamonds which can be carried with all types of outfits and look more contemporary.” There is no denying to the fact that consumers have always preferred to invest in gold during Akshaya Tritya, but now consumers are also buying diamond jewellery, gemstone jewellery and solitaires too. Designs that are pocket friendly were preferred on Akshaya Tritya.
During Akshaya Tritya consumers are generally flooded with offers, discounts and waivers on jewellery making charges to draw more and more consumers at the retail outlets. Other than above strategies, this year jewellers kept their stores open for long hours. “As a part of Akshaya Thrithiya Celebrations, we had interesting offers lined up, also stores will were open till 10.30 PM to facilitate the high influx of customers,” said Gadgil. WHP Jewellers too were open from 9.00 AM in the morning and their online jewellery store also saw some exciting offers.
The response on Akshaya Tritya although moderate was embraced positively by jewellers with a hope that the sales will catch pace in the months to come.
-Compiled by Rika Aash Pathak