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Silver Market Shines in India

The gold and diamond price hike and changing consumer preference is encouraging the silver metal to surge in the market. In the last few months, there has been a tremendous rise in the branded silver jewellery stores across the country. Jewel Trendz highlights the reasons that are leading to the popularity of silver metal.

The silver market in India is growing steadily as the yellow metal is losing its sheen in the country. The surge in prices of gold, the versatility offered by silver is driving consumers to opt for silver jewellery. Jewellers who have ventured into silver jewellery are extremely optimistic about the future. India consumes more silver than any other country in the world. More than silver jewellery, silver utensils are highly demanded products in India. In fact, according to market intelligence firm Euromonitor, Silver jewellery in India is `12,000 crore market in value terms.

In future, the silver market is expected to grow at 25 per cent year-on-year. According to the reports, the market will touch `50,000 crore within five years. Prasad Kapre, CEO and Director of Style Quotient adds, “Silver jewellery market is expected to achieve 15 thousand crores by the end of  2015.” Silver fails to carry the same prestige and status as the yellow metal, but it is cheaper than gold which makes it one of the most desirable metals in the future.

Decline in Silver Prices

In the past two years, silver prices have fallen sharply compared with the yellow metal. Buying gold in India became tough task in 2013 and 2014 due to series of rule and regulation by Government of India, which prompted several traders to move towards silver. Silver prices declined sharply after touching life time high of $49 in May 2011 and it is currently trading at $16.80, cheapest price of silver sparked demand for long term investors. Silver prices fell 24 per cent in 2013 and another 15 per cent in 2014.

According to Kapre, the affordable pricing has been one of the biggest factor for the popularity of silver jewellery in India. Shillpa Purii and Sakshi Patel – founders of Shillpa Purii Designer Jewellery says, “The demand from jewellers to produce cost effective yet precious jewellery and the rise in consumers who are now conscious of their spending and want value for money play a major role in silver’s growing popularity.” In 2014, silver imports reached a record high of 6,842 MT, however in value, the import bill fell due to slid in silver prices. Silver imports in 2014 were worth $3.46 billion compared with $3.64 billion in the previous year.

In 2013 when the silver dropped from $32 in February to under $20 by June, Indian silver demand increased dramatically and total import reached at 5,819 MT for the year of 2013. India is taking advantage of the extremely low price of silver by importing a record amount of the metal. It has seen that RBI has taken several efforts to reduce India’s demand for precious metals but Indian people continue to put their savings in precious metals. Gold is becoming harder to purchase on the market. To combat a growing trade deficit, the Indian government has imposed a 10 percent import tax on gold. This has driven India’s monthly gold imports significantly lower, making the precious metal more scarce. Since silver is often seen as a substitute for gold, it’s not surprising that India’s silver demand has risen to record levels.

Shift in Consumer Preference

Silver metal is appealing to a large section of population in India. While gold is always preferred choice of middle and upper-class population, the rural crowd, which is 70 per cent of Indian population prefer silver jewellery. Besides them, the younger generation is also opting for silver jewellery as it offers variety at an affordable range. Founders of Shilpa Purii Designer Jewellery shares, “The demand for silver jewellery is improving among consumers, especially among younger population who is not very conscious of gold jewellery and don’t mind opting for a similar look and feel in silver jewellery which is less costlier. Silver jewellery is also not restricted to Indian ethnic designs – it can be designed to look western and certain designs can create a mix of both- an Indo-western look as well.”

The youngsters are looking at alternatives to yellow metal. Kapre shares, “With the rise of gold and diamond prices, consumers needed an alternatives to  gold and diamonds. Hence to cater to this demand Silvostyle was launched in 2012.” Kapre recently joined hands with Saurabh Gadgil and Parag Gadgil, respectively Managing Director and Executive Director of Pune-based P N Gadgil Jewellers (PNG) to set up Style Quotient. The new company’s task is to re-energise PNG’s silver jewellery brand Silvostyle, launched in 2012, two years after PNG first ventured into silver jewellery. Silvostyle recently opened an exclusive store in Delhi, and is planning a similar store in Mumbai.

Today’s woman wants are changing too, they are looking at jewellery that goes well with various attires be it traditional or western. “The price of silver, styling and product range favours silver. Changing lifestyle of women who are now working outside of homes and have more reasons of dressing up. They do not like repeating their jewellery. Hence, silver is quite popular,” tells Kapre. With the number of occasions, the need for jewellery has doubled too. Women need different jewellery for different occasions and as silver jewellery is pocket friendly they are the best alternative to them.

New Wedding Jewellery

Another encouraging factor promoting silver jewellery is that many families are looking at gold plated silver jewellery as an alternative to wedding jewellery. The growing popularity of destination wedding also work’s in silver jewellery favour as families don’t want to take chance in carrying precious real jewellery with them. Shillpa adds, “A destination wedding is no longer unusual; but it is surely stressful to travel with real jewels for it. Our new line made with semi precious stones silver jewellery makes easier for brides to travel around with jewellery.”

Purple Silver, renowned manufacturer and wholesalers of silver and platinum jewellery from Bangalore have witnessed a good demand for gold plated silver jewellery in the market. Nitesh Jain, Director of the company launched their new line of jewellery which included gold plated silver wear at the 4th edition of the Jewel Trendz Gems and Jewellery Show. At the show, he said, “Silver is gaining momentum in the Indian market, though the love for gold in India is infinite, but consumers are now willing to adopt new metals due to ever increasing gold rates. However, to reach all the markets and especially cater to the wedding market, we have launched exclusive range gold plated silver jewellery that is in great demand in the market. We have retained the conventional Indian look to get a good hold this wedding season.”

Founders of Shilpa Purii Designer Jewellery adds, “The designs could be customized as per bridal outfits; or even picked readily. Apart from selecting an entire set of semi precious stones- it is also possible to mix and match accessories such as maangtikkas, paasas, jhumars, baaju bandhs, haath phools, kamar bandh’s (waist belts/chains), headgears, that compliment  an existing set of real earrings and necklaces. We have seen a lot of silver in way of chains, multi layers, woven, etc. Silver jewellery has begun replacing gold to a huge extent at weddings. Due its versatility, its demand will soar.”

Silver market is surging high owing to sustained industrial offtake. According to a survey researched and compiled by London-based Thomson Reuters GFMS, there is a growing appetite in India and China for silver jewellery. Silver investment rose in 2012 to a total of 252.7 million ounces, representative of about US$8 billion (£5.22bn) on a net basis, substantially above the annual average of $1.2 billion (£783m) recorded in the 2001 to 2010 timeframe. Buoyant investor interest was also found in demand for coins and medals totalling 92.7 million ounces in 2012, the third highest level ever recorded. Coin minting in China posted a strong increase, growing 47 per cent on 2011’s totals.