Unlike last year, this Akshaya Tritiya gold retailers are trying to convince customers to buy jewellery instead of bars and coins.The trend may slow down the growth in investment demand of the yellow metal in the short term.
Jewellers are making an all-out effort to win over small investors, who buy coins and bars of 1-5 grams denominations, to buy jewellery items and earn a better margin through higher making charges.
Jewellers say they are doing so because a majority of these small investors come back within three months to convert coins and bars into jewellery.
"While doing so they pay making charges twice, first for coins and then for the jewellery," said Umesh Parekh, managing director of BSE-listed Shree Ganesh Jewellery House Ltd - a chain of 20 retail shops across the country.
Making charges on coins and bars are negligible compared to that of jewellery.
For example, Mumbai's leading jewellery retailer Tribhovandas Bhimji Zaveri charges Rs. 75 a gram for coins up to 5 grams while for coins between 5-50 grams it is Rs. 30 a gram.
Making charge for coins above 50 grams is Rs. 10 a gram.
Making charge for jewellery vary depending on the design and are much higher at Rs. 225 Rs. 290 a gram.
"We do not have a tradition of diverting customers from one product to another.
"Ultimately, customers make up their mind before entering into the shop and hence, convincing them to buy a different product becomes difficult.
"But, it is advisable if we convince them to avoid paying the making charge twice in case they want to convert coins into jewellery later," said a staff of Om Jewellers, a city-based
jewellery manufacturer and retailer.
"Short-term investors definitely go for coins and bars while those who wish to keep the yellow metal for long and also use it in between, go for jewellery," he added.
With hallmarked jewellery becoming popular, the risk of a decline in basic value of gold has diminished. Earlier, jewelers used to deduct a considerable amount when customers sold old jewellery.
The marketing strategy of retailers are catching the fancy of the consumer and the trend of buying jewellery is fast catching up with a mix of modern and contemporary designs being offered by jewellers this Akshaya Tritiya.
According to industry estimates, overall jewellery sales on or before May 6 (Akshaya Tritiya) is expected to touch 80 per cent of the total gold sales from 75 per cent last year.
Timings extended
NSE and BSE have jointly decided to have an extended trading session for gold exchange traded funds on May 6 on account of Akshaya Tritiya.
While trading can be done on gold ETFs in the normal market hours from 9.15 am to 3.30 pm, trading in gold ETFs will resume at 4.30 pm on May 6 and will continue till 9 pm to give an opportunity to investors to invest in the yellow metal till late in the night.
Last year, Akshaya Tritiya was on a Sunday and the exchanges had kept trading open till 5 pm.
Trading in the other segments will continue in the normal market hours on Friday.
