Digi-gold is becoming more popular among millennials: Augmont MD

NEW DELHI: Augmont is an integrated precious metal management company with operations in the trade of gold and silver coins and bars through its online platform,gold refining and manufacture of packaged jewelry. The company claims a turnover of over $ 1 billion. Currently, Augmont has a large gold and silver refinery in Uttarakhand, India in terms of production capacity. Ketan Kothari, founder, and MD at Augmont spoke to TOI about the trends in the online gold buying space.

Do consumers feel comfortable buying precious metals online? 

Certainly, the market for online shopping is much smaller today. However, having said that, we have seen a paradigm shift in consumer buying behavior. As seen with other products, the digi-gold The trend is catching up and soon, it will become a much bigger game with consumers, which makes it a regular purchase or based on an accumulated scheme. Nowadays, more and more people feel comfortable buying products digitally. Millennials and those who never thought of buying gold are now becoming our new customers.

What is your strategy for smaller cities? 

Augmont has one of its mission to make gold available for all. And hence our efforts are to make gold accessible and affordable to all Indians. We have two main products- digi-gold which enables anyone to buy gold or silver with a minimum investment of Re 1 and EMI Jewelry where we sell small and affordable jewelry in tamper-proof packaging with options to pay over 3 months, 6 months or 9 months These include chains, rings, pendants, bangles and earrings weighing between 1 to 9 grams only. The idea is to get people to invest in gold in a form which is also wearable. So far we have associations with Muthoot Fincorp Vakrangee, Ebix, Weizmann Forex, Payworld, Piggy, Sahaj E-Village, QuickSun, etc. Piggy is our recent association and many more are in the pipeline. These partners are helping our products reach remote towns and villages which otherwise would be difficult to penetrate.

Among wholesalers and retailers, what kind of growth are they witnessing in each?

Wholesale (B2B) is the bulk of the business in terms of value, but in terms of customer base, transactions and new products: everything focuses on retail customers (B2B2C). Both segments are very different and behave very differently. The retail segment is growing very fast due to the awareness among them and the strength of our network. The wholesale segment maintains its constant growth.
Another observation we find is that consumers of the new era who buy jewelry for their fashion requirements have led to increased demand for gold in the wholesale and retail market. Gold has now gone from being just an investment or savings option to now a need for investment + fashion. People now accumulate small amounts of jewelry in large numbers, which increases the acceptance of demand in the wholesale and retail market.

What form of precious metals are consumers buying online? 

According to the requests we have received on our digital platforms, almost 3 out of every 4 clients request jewelry such as gold, pendants, bracelets, earrings, while the remaining requests consist of coins and gold bars. Digital buyers are buying gold for investment or systematic purchase to set the price and opt for delivery in the form of coins or jewelry in the future.

In case of EMI on jewelery, consumers see the samples at our partner’s stores and choose their article. On the basis of the price quoted on the system, his order is booked by the partner and price is locked on paying of advance for the products chosen which are typically around 20%. The remaining money is paid over a period of 3 to 9 months. Upon payment of the final installment, the delivery is given to the customer. This process is assisted e-commerce. Online purchases are mainly purchased of digi-gold or digi-silver in a manner that they have the choice in the future to either continue to hold in the vaults or take delivery in the form of coins or bars.

Do you have any plans to venture abroad?

To begin, we are planning to venture into the GCC countries and Southeast Asia through partner associations. We are in conversations with few partners and, when the right opportunity comes, we will gladly enter foreign markets. Gold acts as a hedge against inflation, a reserve of value and wealth. It is a commodity for most Indians, but it is almost like currency for international customers. Its performance in savings accounts or dollar deposits is so low that gold as an investment or currency as a means of transaction is very attractive. There are many innovations that can be made in international markets with gold for consumers there. And this has been our vision too.

Can you give us a perspective on what is happening globally in the category in which you play? Are there other rivals?

The gold market scenario differs from country to country. Purchasing gold online is one thing but using that gold as a means of a transaction while using a debit card is a very innovative way of using gold internationally. Apart from this, there are lots of new crypto-currencies who use gold as a backup. Hence, these markets are very different from the Indian market, whereas India is essentially consumption-led. Also, government regulations and policies are different in different countries, making them more like a regional business than global business. Currently, digi-gold is a niche market, though not small by any means. Youngsters across the globe are adopting gold as a fashion accessory due to which jewelers are launching various gold designs in respective domestic markets to attract young buyers around the globe.

What is the current consumer sentiment?

Gold has always had a constant demand, even when the economy is in slow growth or recession. This is simply because, although India is one of the two main gold consumers in the world, its per capita consumption remains very low. Therefore, the demand for gold is positive in a growing market and stable in a negative market. There are periods of slow growth or fall in sales, but they are only temporary periods. Even with the rise in gold prices and the historical maximum, we see that the feelings of consumers are more positive than ever. In a scenario where the stock market does not work well, there is some confidence that people have towards gold, which drives them to invest in it.

Do you expect it to improve or fall in the future?
If economic uncertainty continues to raise the price of gold internationally, the demand for gold will continue to increase. Also in India, demand, regardless of the state of the economy, is fine and is only expected to increase. Almost all Indian households have an investment in gold in one way or another, which gives investors enough confidence to invest in this precious metal. We only hope that the consumer’s feeling towards gold as a category will grow even more in the coming days. Local gold scrap supplies will also meet a great demand, as many people also sell gold at these prices. The Indian market will have a stable demand at these rates once there is no volatility in gold prices.

How do you plan to climb?

As mentioned, we already have a large number of channel partners across the country for our B2B2C market. We plan to add more and increase our contact points. Similarly, also for our B2C market, we are in discussions with many assisted e-commerce companies and other partners with which to partner. Therefore, we are planning to scale by adding more partners to our existing partner base and thus strengthening our control in smaller cities and towns.
Being a part of India’s Largest Integrated Gold Ecosystem, Augmont is an end-to-end, all-encompassing Gold ecosystem that seamlessly traverses from refinery to retail. With the mission to add value at each stage and make Gold an opportunity for all, Augmont strives to be omnipresent. Built on trust and foresight Augmont is an organization that has been a pioneer and a change-agent in the Bullion industry. Legacy, leadership, and Integrity define it.

Most of the time, jewelry is an emotional purchase for most Indian consumers. While it has an omnichannel model, how do you plan to address this?

We understand the emotions of our buyers and, therefore, we have tried to innovate our products around their preferences. There are two ways to address that. For example, we have products such as coins, pendants, bracelets, etc. They have impressions that satisfy all religions, beliefs, and emotions. These customized products are available on all our channel partners and digital platforms, so they are easily available to everyone.

Courtesy: Newsjizz