What kind of expectation have you built in with regard to sales on today’s day?
Yes it is an auspicious day. Lots of Indians believe in the auspiciousness of buying gold on Dhanteras and we are very bullish. We have seen very good market traction in the last few days as a build up to Dhanteras and like every year we expect this to be a fabulous day with great sales, and not just for us but for the entire jewellery fraternity. As always our expectation is to grow handsomely. The rest of it depends on how customers respond.
How much of the digital channels are coming into play for jewellery? Are the footfalls comparable to pre-Covid or are less people coming out even though the volumes are not necessarily less?
I would say that we are seeing higher footfalls. Even last year during the festive season, collectively, we saw growth but that was driven more by ticket value because of the price of gold. This year we are seeing good growth led by footfalls and actual customers. We are also seeing a lot of people who had stayed away from jewellery buying in the last one-and-a-half years come back and we are seeing that in the form of dormant customers who come back and buy jewellery. So we are seeing footfalls as drivers of growth. Online also, there is growth but offline there is as much growth, if not more.
Post Covid, is the consumer more price conscious? Is it the more affordable jewellery segment which is seeing traction or the more expensive ones?
Let me first correct you. We have not just gone back to pre-pandemic levels. We are seeing growth over pre-pandemic levels both in Q2 as well as after that.
Also, because gold prices over the last couple of years have gone up significantly, people are looking for lighter weight jewellery. Secondly, we are seeing people want to wear that jewellery and kind of want to express themselves. So they are looking at more wearable jewellery as opposed to locker jewellery. The third piece is that, thanks to virtual interactions with so many people, people are looking at jewellery that is more visible and expressive above the waist. These are some of the trends that we are seeing.
Of course, there is another piece that adornment is not restricted only to gold. We are also seeing a strong comeback and growth in diamond studded jewellery. So across price bands, we are seeing a very good response whether it is gold or diamond jewellery.
Are consumers a little bit more conscious about branded and hallmarked jewellery? Do you see a trend of shift from unorganised jewellers to the organised spaces such as yours?
It is difficult to comment on that because while hallmarking has been introduced, some relaxations have been given by the Ministry of Consumer Affairs till the end of November, post Diwali in terms of processes. The entire jewellery industry is seeing very good growth. Maybe some of us are growing faster than the others and in that sense, you can say there is a market share gain but it will be difficult to comment at this stage because the entire industry is seeing very good growth and we are seeing higher growth.
Perhaps there is some amount of market share gain because we are also seeing that growth is higher in the gold jewellery segment compared to the studded and most of the market is in gold jewellery whereas we are leaders in the studded in any case. And yes, we are seeing a significant growth in new customers. We can conclude that there is some degree of shift in terms of sentiment towards bigger, branded players but it is too early to conclude whether it is due to hallmarking or it is maybe due to just safety considerations. Maybe it is trust because now trustworthiness and safety are at a premium.
How sustainable is the growth? There were hints in the commentary on how will be betting on smaller towns.
Yes, growth has been very good. In Q2, retail growth was around 70% over last year and 60% plus over the year before. Having said that, I must warn that some of this growth is due to pent up demand; some of it is due to share of wallet gains but despite that, the outlook for growth in the jewellery industry seems to be very positive on multiple counts partly because of weddings. In the second half of the year, we expect a lot of deferred demand to come in through weddings like last year.
Gold prices have been reasonable. They have corrected slightly in quarter two and they are in a comfortable psychological mark of around Rs 4,500 a gram. People are also quite fine and they have been relatively stable. The third piece I would say is, yes, tier-2, tier-3 and even tier-4 towns are seeing higher growth but the base is much smaller and so the growth rates are higher in smaller towns compared to the top 12 towns. I do not know why, it could be due to rural demand being better, it could be due to people having gone into their hometowns etc.
We are betting big on growth across towns. We are prepared for that growth. In the last few months, the industry has seen a very high demand surge and anybody who is not prepared for that growth will have missed it. We are betting big on the fact that this growth should continue, maybe not at those levels because some amount of pent up demand and some amount of wallet gains may not last forever but we are betting big on growth so that we do not miss out the opportunity should the demand surge continue. It is very difficult to predict exactly how the next few months will go but we have to be prepared for the best as well as the worst.
What are the plans as far as Dhanteras and this festive season goes? Did you hold back on price hikes for the sake of the festive season? Any special offering?
We have a lot of exciting stuff going on. We have launched the Utsaah collection and the Utsaah campaign which has brought out a lot of utsaah (enthusiasm) amongst the entire team. Our products are doing very well. We have launched a lot of lightweights and wearable jewellery with layering and that has worked well. We also have offers. There is an up to 20% off on making charges on gold jewellery as well as up to 20% off on studded jewellery.
We have today’s day special and the teams are all geared up. There are gifts inside the store, there are special deliveries to be made on Dhanteras occasion. There is a lot of excitement in the air. We have not held back on any front. We have gone ahead and told our teams to target a good double digit growth this Dhanteras and the festive season has been seeing very good double digit growth.
We believe that this should continue and our energies are towards making this happen but a lot depends on how things turn out on that particular day. It is like a T-20 match. One has to make the most of today and hope all are on the positive side.