AOJ’s Exclusive Report on Akshaya Tritiya 2014

The much-awaited Akshaya Tritiya – eagerly anticipated both by customers and jewellery retailers for jewellery buying and enhanced business—has registered a mixed trend in India this year. While South India, particularly Bangalore, Chennai and several Tier II and Tier III cities, have seen higher footfalls, North and West India have reported a lackluster performance. Trading at the exchange-traded fund (ETF) counter too was the lowest in the last five years. However, the performance in South India has brought much relief to the industry, already weighed down by gold import norms and shortage of raw materials. The overall sales was 15 to 20% more than last year although the price of 10 grams of gold had risen 12% to Rs 28,557 as compared to last year. With Akshaya Tritiya starting from the afternoon of 1st May, and extending to 2nd May, there were expectations that the two-day festival will see a spurt in business as compared to the last couple of months. In fact, to tide over the slump in jewellery sales and attract more customers during this period, jewellers had announced a series of offers: from flat discounts on rates to gift schemes, to freebies, to free pick up and drop to reach the showroom, there were many interesting offers and promotion plans. To assess the ground realities and get a first hand experience of sales on this day, the AOJ team visited chain stores such as Malabar Gold, Joy Alukkas, P C Jeweller, Tanishq, Josco and mid-range jewellers such as Abaran, Popley Eternal, Anmol Jewellers, AK Motiwala, Notandass Jewellers, besides family jewellers, in Mumbai & Bangalore. While jewellers in Mumbai and Delhi have reported that sales were below expectations, Chennai and Bangalore jewellers were cautiously optimistic. And jewellers in Tier II and Tier III cities such as Madurai, Mangalore, Udupi, Hubli, Dharwad, Belgaum, etc have also reported fairly good response. The state of Kerala has also done exceedingly well this year. Compared to the previous year, there was a 15 per cent surge in sales. Gold coins sold like hot cakes in many counters across Kerala. Some consumers even had to go back empty handed as Lakshm inscribed coins went out of stock. According to AKGSMA (All Kerala Gold and Silver Merchants Association) president, Abdul Nazar, “The sales were commendable this Akshaya Tritiya. We experienced good increase in the number of customers.‘’ Confirmed a source from the World Gold Council, ``Most of the retailers in Chennai have reported good walk-ins during the two-day period.. The advance booking schemes seemed to have paid off with people picking up their jewellery on the auspicious day. It was definitely better than last year.’’   AT 2014 Takeaways • Akshaya Tritiya was celebrated for two days—1st & 2nd May • Overall sales witnessed a mixed trend • Jewellers offered a range of discounts, gifts, & freebies • South India experienced 15 to 20% more sales than last year • Both metros and Tier II and Tier III cities reported good turnout • Branded showrooms, chain stores & family jewellers did brisk business • Most of the buys were small-ticket items like pendants, earrings, finger rings, chains etc • Light weight jewellery was in demand • Gold jewellery reported higher sales • Diamond jewellery also sold about 20 per cent more than last year • Sales in North & West India were dull • Jewellers in North looking forward to Dhanteras & wedding season for compensating • Gold import restrictions and raw material shortage impacts sales • General elections and code of conduct in cash transactions, etc adversely affected jewellery sales North & West India However, cities like Mumbai, Jaipur and Delhi have not experienced great sales. Gold import restrictions by the government have led to a reduction in the availability of the raw material and the premium on gold has gone up to $120 to $130 per ounce. General elections too have impacted jewellery sales in the past couple of months as there were restrictions on carrying cash and valuables around poll time and a code of conduct had been imposed. Retailers in Mumbai experienced normal footfalls and the verve and vitality of Akshaya Tritiya was missing. Major jewellery retailers and local brands like Tanishq, Joyalukkas, Orra Jewellery and Popley Eternal had normal business. In Delhi and National Capital Region (NCR regions), slackness in sales was noticed due to increased duty on gold imports and other curbs imposed by the government. According to Ajay Bali, store manager, Tanishq, “There is usual growth of 4-5 times in our business this Akshaya Tritiya. Old customers visited our store but first time customers were hardly seen. Compared to last year there was no increase in the footfalls and this time the buyers refrained from bullion purchase.’’ The general sluggish growth in economy, and lesser liquidity of gold in the market have dampened the spirits this Akshaya Tritiya with the impact being pronounced in North and West India. South India was better off with increased footfall and higher sales. "We are happy that jewellery demand has emerged during Akshaya Tritiya, which is good for the industry that employs around 35 lakh people." Haresh Soni Chairman, All India Gems & Jewellery Trade Federation (GJF) “This year Akshaya Tritiya has registered higher footfalls than last year. With shops opening as early as 5.30 am in Chennai, there has been a reasonably good increase in buying, against the backdrop of the bomb blast and heavy security.” Jayanthilal Challani President, Madras Jewellery and Diamond Merchants Association (MJDMA) “This Akshaya Tritiya, our sale’s graph has reached new heights. We witnessed a 20 per cent hike in our sales as compared to last year. Though we faced lot of difficulties because of elections and government policies but, this Akshya Tritiya covered it up for us as we received an excellent amount of footfall and sales.” Iflu Rehman Zonal Director, Malabar Gold and Diamonds, Bangalore. “We had an average sale just like last year, in north, people usually buy gold on Dhanteras so we are hoping that this Dhanteras festival will cover our losses of Akshaya Tritiya. Ashok Minawala Director, The All India Gems and Jewellery Trade Federation (GJF) Overall Akshaya Tritiya has been subdued. People are expecting a fall in gold prices anticipating the new government and are holding on to their purchases. There could be a drop of about Rs 200 or so per gram but what about the international gold prices? Nobody can predict how they will move. N. Anantha Padmanabhan Regional Chairman & Director, GJF & MD, NAC Jewellers, Chennai “We received an excellent response from the customer. Though people preferred gold, it was interesting to see a number of customers opting for diamonds as well. Diamond sales were higher this time as compared to last year.” Rashmi Vinod CEO, Bhima Jewellers "We witnessed an increased demand for diamond and platinum jewellery. However, with volatile prices of gold, most of the customers were cautious when it comes to making investment in gold jewellery and bullion.’’ Colin Shah MD, Kama Schachter, Mumbai “We have seen a growth of 20% in sales this Akshaya Tritya compared to last year. Since disposal income in rural areas is high and with a limited investment options, gold buying still retains its charm. Sunil Potdar Potdar Bros, Belgaum.