Dazzling price of gold hits India's jewellers
Sunday, 4 November 2007
Amy Yee from New Delhi
As global gold prices surged to the highest level since 1980 last Monday, the World Gold Council launched the latest push of India's most aggressive marketing campaign to boost business ahead of the country's festive season.
The world's largest importer of gold, India accounts for about a quarter of gold purchases. In the weeks leading up to Diwali, the "festival of lights", gold sales in India account for 25-30 per cent of the year's business. The winter wedding season makes up most of the balance.
To boost sales ahead of Diwali, which starts on November 9, the WGC last Monday launched a nationwide television advertising campaign featuring celebrities clad in gold jewellery "talking about why gold is good", said Ajay Mitra, managing director for India at the WGC, an association of global gold mining groups.
He declined to disclose the campaign's budget but said it is a substantial part of fourth-quarter funds.
WGC also worked with Reliance Capital, a finance company, to introduce last month gold coins of just three-eight grams costing as little as Rs1,000 (£12) to develop the market among lower-income customers.
The council is also sponsoring an annual contest to encourage designers to come up with more contemporary jewellery in order to "appeal to the young generation", said Mr Mitra.
Gold prices have soared as investors seek a safe haven from global market turmoil and the surge threatens to damp Indian sales.
Indian prices climbed to as much as Rs9,900 for 10 grams last week from about Rs7,000 for 10 grams this summer.
JP Singh, a garment exporter in Delhi who is in the midst of buying gold for his daughter's forthcoming wedding, reckons that higher gold prices will increase wedding expenses by 10-15 per cent.
Subhash Bhola, owner of Bholasons Jewellers in New Delhi, said higher gold prices were "definitely decreasing business". People might postpone their purchases in the hope that prices will fall, he said.
WGC is also helping local Indian jewellers to host shopping fairs and hone their in-store promotions.
India's gold sellers already face stiff competition from a growing choice of consumer goods. In a reflection of the evolving shopping habits of Indians, Mr Bhola said everything from more holiday options, air conditioners, cars and watches competed with gold for consumers' rupees. "Now alternatives are there," he said.
In the past, Diwali was practically synonymous with gold-buying. But now "there's so much noise about everything else. It is important for us to make gold relevant," said Mr Mitra.
Gold is ingrained in Indian culture and traditionally given at births, weddings and major festivals. The metal has been part of the Indian "life cycle" for a long time, said Mr Mitra. "But gold needs to find a similar position with the younger generation."
Under syndication arrangement with FE
As global gold prices surged to the highest level since 1980 last Monday, the World Gold Council launched the latest push of India's most aggressive marketing campaign to boost business ahead of the country's festive season.
The world's largest importer of gold, India accounts for about a quarter of gold purchases. In the weeks leading up to Diwali, the "festival of lights", gold sales in India account for 25-30 per cent of the year's business. The winter wedding season makes up most of the balance.
To boost sales ahead of Diwali, which starts on November 9, the WGC last Monday launched a nationwide television advertising campaign featuring celebrities clad in gold jewellery "talking about why gold is good", said Ajay Mitra, managing director for India at the WGC, an association of global gold mining groups.
He declined to disclose the campaign's budget but said it is a substantial part of fourth-quarter funds.
WGC also worked with Reliance Capital, a finance company, to introduce last month gold coins of just three-eight grams costing as little as Rs1,000 (£12) to develop the market among lower-income customers.
The council is also sponsoring an annual contest to encourage designers to come up with more contemporary jewellery in order to "appeal to the young generation", said Mr Mitra.
Gold prices have soared as investors seek a safe haven from global market turmoil and the surge threatens to damp Indian sales.
Indian prices climbed to as much as Rs9,900 for 10 grams last week from about Rs7,000 for 10 grams this summer.
JP Singh, a garment exporter in Delhi who is in the midst of buying gold for his daughter's forthcoming wedding, reckons that higher gold prices will increase wedding expenses by 10-15 per cent.
Subhash Bhola, owner of Bholasons Jewellers in New Delhi, said higher gold prices were "definitely decreasing business". People might postpone their purchases in the hope that prices will fall, he said.
WGC is also helping local Indian jewellers to host shopping fairs and hone their in-store promotions.
India's gold sellers already face stiff competition from a growing choice of consumer goods. In a reflection of the evolving shopping habits of Indians, Mr Bhola said everything from more holiday options, air conditioners, cars and watches competed with gold for consumers' rupees. "Now alternatives are there," he said.
In the past, Diwali was practically synonymous with gold-buying. But now "there's so much noise about everything else. It is important for us to make gold relevant," said Mr Mitra.
Gold is ingrained in Indian culture and traditionally given at births, weddings and major festivals. The metal has been part of the Indian "life cycle" for a long time, said Mr Mitra. "But gold needs to find a similar position with the younger generation."
Under syndication arrangement with FE