GOLD NEWS UPDATE 21.08.2012:- KOCHI: Gold jewellers in the south are upbeat on the marriage and festival season that has just begun. Expansion of branches is keeping the business in good stead despite high gold prices.
Bulk purchases for marriages are still continuing though coin sales have slid. Most of the jewellery chains are now targetting rural and semi-urban areas in Tamil Nadu, Karnataka and Andhra Pradesh. This indicates that the September quarter may fare better compared with the previous one, which showed a 38% decline in gold demand in the country according to aWorld Gold Council report.
The marriage season has started in Kerala, coinciding with Onam festival in the last week of August. By September, Diwali will boost jewellery demand further and the trend will continue till November in other southern states. The price of 22 carat gold, used in jewellery, is inching up towards Rs 3,000 per gram.
Major jewellery groups are on an expansion spree, particularly to semi-urban areas to increase their revenue. Kalyan Jewellers, which recently roped in none other than Amitabh Bachchan for ads, is investing Rs 1,000 crore in the current year on its 15 new showrooms in south India and Gujarat.
"More customers are going to the organised sector to buy gold. With 35 showrooms in south India at present, our business has been growing 30% to 40% annually," said TK Ramesh, executive director of Kalyan Jewellers, which has a target of Rs 16,000 crore turnover this fiscal year.
Joyalukkas, another jewellery major, is planning to open eight showrooms this year. "People still make bulk purchases for weddings in south India. Of this, over 50% is new purchases while 30-40% is recycled gold," said PP Jose, chief operating officer of Joyalukkas.
Tapping new markets allows the chains to maintain a good growth in revenue. Buying trends are different among the southern states. Bulk purchases for marriages mostly take place in Kerala and metros in other states. But in rural areas, people buy small quantities of jewellery regularly.
Currently, buyers prefer gold jewellery to coins. "People seem to have lost confidence in gold coins. The share of coin sales in total sales has come down to around 10-15% from 30-40% earlier. Coins were in demand when there was a high volatility in prices. Now, the price rise is gradual," said Girirajan, MD of Bhima Jewellers. According to him, the depreciation of the rupee may raise gold prices again. (Neal Bhai 9999974733)
Bulk purchases for marriages are still continuing though coin sales have slid. Most of the jewellery chains are now targetting rural and semi-urban areas in Tamil Nadu, Karnataka and Andhra Pradesh. This indicates that the September quarter may fare better compared with the previous one, which showed a 38% decline in gold demand in the country according to aWorld Gold Council report.
The marriage season has started in Kerala, coinciding with Onam festival in the last week of August. By September, Diwali will boost jewellery demand further and the trend will continue till November in other southern states. The price of 22 carat gold, used in jewellery, is inching up towards Rs 3,000 per gram.
Major jewellery groups are on an expansion spree, particularly to semi-urban areas to increase their revenue. Kalyan Jewellers, which recently roped in none other than Amitabh Bachchan for ads, is investing Rs 1,000 crore in the current year on its 15 new showrooms in south India and Gujarat.
"More customers are going to the organised sector to buy gold. With 35 showrooms in south India at present, our business has been growing 30% to 40% annually," said TK Ramesh, executive director of Kalyan Jewellers, which has a target of Rs 16,000 crore turnover this fiscal year.
Joyalukkas, another jewellery major, is planning to open eight showrooms this year. "People still make bulk purchases for weddings in south India. Of this, over 50% is new purchases while 30-40% is recycled gold," said PP Jose, chief operating officer of Joyalukkas.
Tapping new markets allows the chains to maintain a good growth in revenue. Buying trends are different among the southern states. Bulk purchases for marriages mostly take place in Kerala and metros in other states. But in rural areas, people buy small quantities of jewellery regularly.
Currently, buyers prefer gold jewellery to coins. "People seem to have lost confidence in gold coins. The share of coin sales in total sales has come down to around 10-15% from 30-40% earlier. Coins were in demand when there was a high volatility in prices. Now, the price rise is gradual," said Girirajan, MD of Bhima Jewellers. According to him, the depreciation of the rupee may raise gold prices again. (Neal Bhai 9999974733)
