In spite of high gold prices, Akshay Tritiya 2023 proves to be a weekend of swift sales for the Indian jewellery industry

Between matching last year’s growth in volume, and even surpassing it in some cases, retailers across India have done well

A few weeks before Akshay Tritiya this year, jewellers all over India watched the price of gold cross Rs 61,000, which was 20% up from Rs 50,808 per 10 grams since last year’s festival on May 3, 2022. The weekend of April 22-23, 2023 was near, and all most retailers could think about was how the most auspicious day for buying gold in the country would pan out. Some in Maharashtra were concerned as Gudi Padwa, exactly a month earlier on March 22, 2023, had witnessed muted sales because of the increasing price of gold. And as Akshay Tritiya drew closer, pre-bookings numbers – lower compared to the previous year– worried other retailers. If there was no price correction, would that keep buyers at home and lead to another festival of below-average sales for them? But this is not an industry for non-believers. If anything, the Indian jewellery retailers set their sights high, and on the weekend of Akshay Tritiya, all fears were quashed and all hopes rewarded.

CONFIDENCE IN GOLD

“Customers surprised everyone by showing confidence in gold as an investment option. This Akshay Tritiya, bullion sale was 40% of our overall sales. Customers are more informed and they are buying bullion in small quantities to achieve long-term financial goals. We have seen bullion was one-third of overall sales. Pre-pandemic, it was 20% of overall sales,” says Ajit Gadgil, Promoter, PNG Sons, adding, “This was the first ‘Muhurta’ post gold price appreciation in the current financial year. We have seen minor growth in sales and 15% uptick in value terms year on year.”

While they were bullish about their prospects on Akshay Tritiya, the Pune-based retailers did not float any offers to lure customers to their showrooms. “We launched light-weight jewellery along with authentic Maharashtrian jewellery. We have seen good traction in our showrooms across Tier I, II and rural locations. It was a good footfall along with good volume. In fact, value-wise, our sales went up by 32% YOY. Gold is used as a tool to hedge against inflation and people have understood this very well. Going ahead, we expect good buying momentum in gold both as bullion and jewellery. Gold has given almost 12% per annum (non-cumulative) risk-free returns in the last 20 years,” says Amit Modak, Director and CEO, PNG Sons.

“We have seen a weight increase of around 10-15% in gold sold during this year as compared to 2022. There was no impact on sales during this auspicious occasion, which amazed me as a jeweller. I think it is a positive sign for the industry,” says Anand Pednekar, Owner, Anand Jagannath Pednekar Jewellers, Mumbai. The company reported that out of the total sales, the share of bullion was around 10-12%, while out of the total gold jewellery sales, 80% comprised bridal jewellery.

SURGE IN DIAMOND SALES

Many retailers say that customers are increasingly coming into showrooms with a budget and specific needs. “People are coming for advanced buying for the weddings that are scheduled in the next year too. We thought that people would opt for more lightweight jewellery but to our surprise, we had more people buying heavy jewellery, especially big necklaces and bangles,” says Saurabh Gadgil, MD and CEO, PNG Jewellers, Pune. By the evening of April 22, the company reported a 10-15% growth in quantity of gold sold over the last year, and 40% in terms of value growth. “About 80% of sales is gold and silver is 5%. And in 80% gold, 75% is jewellery and 25% is bullion. Diamond sales have been strong, too. It’s 15% of the overall sale,” Gadgil says.

Eshwar Surana, Managing Director of Bangalore-based Raj Diamonds was taken by surprise when pre-booking orders came in at his showroom. “People who wanted to buy gold are now investing in precious diamond jewellery. We started selling a few days in advance, and this year, we had an unusually high demand for wedding jewellery and a significant rise in demand in the men’s category too. We saw an increase of around 20% growth in volume sales compared to last year,” he says.

A BOUNTIFUL TIME

Outside of Tier I cities, Akshay Tritiya proved to be bountiful too. In Solan, Himachal Pradesh, Akshay Verma, MD, Verma Jewellers was pleasantly surprised when their pre-bookings increased compared to 2022. Unlike many other retailers, his company did not offer discounts on making charges; instead, they reduced their gold rates by nearly 5% to attract customers. The strategy worked. “I have witnessed a growth of at least 30-40% in sales this year as compared to the last year. Out of the total jewellery sales, 80% consisted of gold jewellery and the rest are diamond and silver jewellery. In gold jewellery sales, 45-50% were wedding jewellery sales,” he says. The recent HUID mandate, and absence of Assaying and Hallmarking centres in nearby Shimla, meant that Verma had to send his stocks to Chandigarh for hallmarking, and this resulted in inability to put a small percentage of jewellery on display during Akshay Tritiya.

Meanwhile, Somil Modi, Director, Jaipur Diamonds, Ludhiana noticed that the special prices on diamond and gold jewellery offered by them created a slight buzz among their buyers a few days before the festival. “People who had been thinking of buying something they had seen earlier made a purchase on Akshay Tritiya. The awareness among younger clients about diamonds has created a demand for higher quality certified jewellery,” he says, adding that non-bridal jewellery was the category that moved on the day at Jaipur Diamonds.

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