Gold demand on Akshay Tritiya likely to plunge 95 percent in India amid lockdown

With jewellery shops shut due to the lockdown to control coronavirus, the demand for gold on auspicious Akshaya Tritiya is estimated to plunge by around 95 per cent and only negligible sales happening through digital mode.

Sharp rise in gold prices by over 52 per cent in the last one year is also a dampener.

Industry body for jewellers said that sales would only be 5 per cent compared to last year’s Akshaya Tritiya, although Kalyan Jewellers is more optimistic and expected sales to be 10 per cent of the normal demand.

“With a complete shutdown of showrooms during Akshaya Tritiya, which has fallen within the lockdown 2.0, jewellers have gone online or digital to cater to their customers. We are expecting only up to 5 per cent business compared to last year. People still prefer to touch and feel gold jewellery before buying,” All India Gems and Jewellery Domestic Council Chairman Anantha Padmanaban told PTI here.

He said jewellers all across have come out with innovative offers to attract customers for digital purchases, including locking of prices, gold ownership certificates, among others.

“Any physical delivery or purchase will happen after the lockdown. We expect the industry will gradually limp back to normalcy in May and June. We expect the demand to peak during Diwali,” he added.

Akshaya Tritiya, also known as Akha Teej, is an annual spring time festival considered auspicious in many regions (especially in the south and the west) for beginning new ventures, marriages, expensive investments such as in gold.

Sowing of Kharif (summer) crop begins on Akshaya Tritiya in many states. On this day, the construction of chariots for the Ratha Yatra festivities also begins in Puri, Odisha.

This Akshaya Tritiya also taking place when gold was scaling since January, when COVID-19 pandemic began to spread across the world.

Saurabh Gadgil, the CMD of PNG Jewellers, said bookings have been steady throughout the day.

“We are expecting 10-15 per cent business compared to last year. Mostly people are booking small denomination pure gold of 2-3 grams. Jewellers are attracting customers by offers like e-vouchers and e-certificates,” he added.

He said jewellers are also offering price-lock as the gold is ruling at around Rs 48,000 per 10 grams and will go up further as stocks will dwindle in absence of gold imports.

Kalyan Jewellers CMD T S Kalyanaraman said, the circumstance of this year’s Akshaya Tritiya is radically different with as the company’s over 140 showrooms across India and the Middle East are closed.

“This year’s sales cannot of course be compared to a regular brick and motors showroom sale during Akshaya Tritiya,” he said, adding that “in the limited time since the announcement of our Akshaya Tritiya offering and given the current circumstances, we were expecting to clock about 10 per cent of our usual Akshaya Tritiya sales, this year”.

Kalyan Jewellers has launched the Gold Ownership Certificate program on the digital platform early last week to attract consumers.

World Gold Council, India, MD Somasundaram PR said there is significant un-satiated investment demand as gold has been the best performing asset class and is poised to continue.

Gold is ruling at around Rs 48,000 per 10 grams. In the last one year, gold prices have gained by over 52 per cent compared to Akshaya Tritiya in 2019 (7 May 2019), when the gold price was at Rs 31,496 per 10 grams, he said.

Gold is sought after for its role as a safe haven in the current times when anxiety rules high about the scale of economic impact and the recovery path, which is yet uncharted.

“Lockdown, high prices, income worries and postponed weddings have kept consumer demand subdued, almost non-existent in many towns. Online sales by some large jewellery retailers and digital platforms like SafeGold and MMTC-PAMP have facilitated customary token purchases in urban areas in support of tradition. We believe that this Akshaya Tritiya could spark an innovative trend in retailers’ interface with consumers in emerging times – and it will be good for gold, and the broader economy,” Somasundaram added.

Suvankar Sen, Executive Director, Senco Gold and Diamonds opined that customers who are under lockdown but at the same time do not want to miss out on purchasing gold or jewellery for the auspicious are not only getting a chance to avail of substantial discounts on gold rates and waivers on making charges but also getting an opportunity to contribute to the COVID-19 relief fund through their purchases.

“So far, during the Akshaya Tritiya online sales offer that runs from April 22-27, we have witnessed 10-15 per cent sales compared to that of last year’s total Akshay Tritiya sales. As all our offline stores are closed now due to lockdown, we are experiencing customers’ preference for buying bars, coins and making token advance through our e-commerce section,” he added.

“This year’s Akshaya Tritiya is different from that of the previous year, as there is no in-store sale happening this year. So, sales figures during Akshaya Tritiya this year will be a huge difference from those of last year. Having said that, the positive response from the online gold sales proves that lockdown has not been able to adversely impact the consumer spirit,” Malabar Gold and Diamonds Chairman Ahammed MP said.

Paytm Gold spokesperson said it has sold over 32 kgs of gold.

“Our partner MMTC-PAMP confirmed that Paytm sold the highest amount of Gold among all digital platforms in the country. Smaller cities contributed to 60 per cent of all orders and we are thankful to the buyers for their trust on Paytm Gold,” he added.

Ajoy Chawla, CEO, Jewellery Division at Titan Company said, in spite of ongoing uncertainty and anxiety, customers have positively embraced e-AT with much vigour and enthusiasm.

“All 328 Tanishq stores remain shut this year and hence it would be unfair to compare numbers with last year. But the overall customer response totanishq.co.in from key metros and even with tier-II and III towns has been extremely encouraging. We have had over 1 million visitors on our website,” he added.