Diwali 2013 records a slump in volume of jewellery sale

Diwali, which the most well known of the Indian festivals: it is celebrated throughout India, as well emigrants. But, the sales on Diwali toppled by almost 40 per cent this year. Even though the price of gold was cheaper this Diwali at Rs. 31,400/10 grams compared to roughly Rs.33, 000/10 grams last Dhanteras, the hustle bustle in most of the jewellery shops was less as compared to 2012. According to a survey, the financial sector has been going through a lot of pain and Diwali this year was glamor less in terms of jewellery. The survey further reveals that, an increasing interest among domestic consumers was seen in terms of diamond jewellery. The instability in gold prices seem to have drawn attention of jewellery buyers towards diamond based jewellery, but, diamond buyers, however, dipped too in comparison to last year.

With gold prices rising, white gold, diamonds or platinum was considered to be the new trend among the buyers. When asked Ishu Datwani, Director, Anmol Jewellers for inputs on the same, he responded, “Even though the sales of Anmol Jewellers were as good as last year’s, we noticed that uncut diamonds as well as plain diamond jewellery did well this year compared to that of gold and other precious metals.”

Ashok Kumar Jain, Director, Shree Lakshmi Jewellers added to this by saying, “Due to excess fluctuation in gold rates, people were cautious this festive season and hence diamond and silver jewellery was their focus of interest. This Diwali we saw a substantial increase in diamond and silver sales. Silver price has reduced by 60 per cent which is another reason for the rise in sale this Diwali and Navratri.” A day before Diwali all major city markets wore a gloomy look with gold shops being the worst hit. The new taxes, hike in gold prices and downfall in property rates are the major reasons said to be behind the decreasing purchasing power.

Dilip Lagu, Director, Lagu Bandhu Motiwale Pvt. Ltd. said, “We are experiencing the same dilemma as others. Our gold sales have dropped and I believe there is a negative sentiment amongst the consumers even for items other than jewellery this Diwali. People were buying studded jewellery more than the usual heavy gold ones. In addition to that, we had a 50 per cent off on making charges in order to secure ourselves from any substantial loss.”

The excursion in most of the jewellery shops and even banks were less as compared to the sales of 2012. Retailers too have suffered the downfall as the maximum customers opted out for silver and diamond items. Demand for bars and coins was extremely low as investors are avoiding purchases due to inflated prices in the domestic market than global rates. A definite change in buying trend has been witnessed this year as many preferred diamond to gold and the overall sale of the yellow metal drenched to almost 40 per cent. Several public and private sector banks too restricted the sale of gold coins. The availability of coins is less this year because of the import restraints as import duty has also been inclined to 10 per cent from 8. Rising prices have already hit import volumes, with the amount of gold brought into the country dipping from 162 tonnes to just 47 tonnes in July. Dealers surprisingly saw a 30 per cent jump in the sales of silver during Dhanteras-Diwali.

On the other hand, it was also evident that consumers who celebrated the festival whole-heartedly did not refrain from purchasing heavy gold jewellery in spite of the fluctuation in prices.

Concurring with the consumers’ mindset was T.S. Kalyanaraman of Kalyan Jewellers. When asked if Kalyan Jewellers experienced the slump as other jewellers did, he shared, “On the contrary. The season was very good for us and we have achieved 30 per cent more jewellery sale in comparison to last year. We also witnessed a rise in demand for silver and diamond-studded jewellery but the heavy gold sets in the range of INR 50,000/- to 1 lac also moved well.”