Spotlight on opportunities and advantages for regional brands in the gold industry

According to experts in the business, trends in jewellery making keep on changing, as customers prefer more and more customization. They are clear about their preferences and are keen on getting things done their way.

Ajit Gadgil, Promoter & director of PNG & Sons and director of Gargi Costume Jewellery; Amit Modak, director and CEO of PNG & Sons and director of Gargi Costume Jewellery, are the keynote authors of this article. Wherein changing customer behaviours, buying patterns and challenges were discussed.

Evolving trends

With the rising urbanization, the transient population is growing day by day as people are moving to different locations for job or business opportunities. This is resulting in evolving trends and to cater to such a population, the experts in the industry need to enhance their creative skills and adopt a cosmopolitan attitude.

Ajit Gadgil said, “We need to understand the taste of clients coming from a range of cultural backgrounds to stay afloat in the market. Studying customer habits is essential to be successful in the business.”

Gold v/s Imitation jewellery

Many jewellery enthusiasts around the country are inclined towards imitation jewellery since it is cost-competitive and stays in trend. Discussing whether this is a worrying trend for the gold industry, Amit Modak said, “While fashion jewellery is preferred due to the vast variety at affordable prices, gold jewellery is handcrafted and timeless. Both the products have their own dedicated customer base and target groups based on their preferences. People buy ornaments depending upon their taste, but history suggests that gold will never go out of trend and the industry will always bloom.”

Regional stores shine

Despite branding and standardization becoming a norm across the country, the regional jewellery CHAIN shops are carving a niche and have a bright future. Explaining why smaller brands shouldn’t worry about competing with the national ones, Amit Modak said, “On an average, only half of the population invests in gold and within that only five per cent prefer big brands. The rest of them reach out to regional brands for their gold needs.”

“Moreover, national brands may sometimes use machines to meet the demands of customers across the nation within a set time frame. This gives regional stores and standalone jewellery shops an edge over the big players, thanks to pure handcraft,” he added.

Hallmarking advantage

Gold hallmarking became a mandate in the country in June last year and should be perceived as a positive trend as it will benefit the regional players largely. Ajit Gadgil said, “Hallmarking is a check for purity, quality and standardization. With its implementation, the price gets adjusted and unethical competition fades away as it promotes transparency. This brings regional stores at par with national brands as it offers the customers the same quality of gold at reasonable charges at Tier-II and Tier-III cities as well.”

Pandemic effect

During the lockdown, people were confined to their homes and ended up saving a handsome amount. There was a revival in the demand for gold and people were keen on investing in the highly liquid asset.

Gold is always considered a safe haven as it adjusts its value as per inflation. Throwing light on the buying behaviour of customers during the crisis, Amit Modak added, “Instead of spending money on expensive lifestyle products, people preferred buying gold jewellery as it is a very reliable investment which always benefits the investor. It is a good resale value as compared to other materialistic products.”

The road ahead

Talking about the future of the gold industry, Ajit Gadgil opined, “The dedicated customer base of national brands will grow due to the transient population, standard practice across the country and buyback facilities, while the restricted transient population will benefit the local brands. The spending capacities and lifestyles in metro cities and hinterlands are quite different as the former prefers EMIs and the latter has a huge disposable surplus.”

Boosting further

As per Modak, more than a crore of the country’s population is involved in the gold industry which has become a huge source of employment while fostering creativity and preserving the rich tradition and heritage of the nation. Making an earnest appeal to the government, he said, “The additional 2% GST should be brought down back to 1% as it will benefit both the customers and store owners. Moreover, extra charges on the gold exchange are leading to double or even triple taxation depending upon the number of times customers wish to exchange their gold. Remaking shouldn’t involve taxes. With the rising trend of digitalisation, people want to frequently swipe their cards, which is affecting the bottom line of the industry due to high transaction charges. These regulations should be checked and relaxed.”

Courtesy: Livemint