Jewellers bet on online sales, offer 'gold price protection' on Akshaya Tritiya

Last Updated 26 April 2020, 16:13 IST

At a time when buying gold from brick-and-mortar stores is no longer possible due to the lockdown, many jewellers are focusing on online sales, and some have introduced "price protection" schemes to attract customers to invest in the metal on the occasion of Akshaya Tritiya.

The scheme allows a customer to book gold online at a particular price which is locked for a certain period and protected from the rise of rate. If the price falls from the fixed-rate at the time of purchase within the specified tenure, one can buy it at the prevailing market rate.

Some major jewellery houses such as Kalyan Jewellers, and Malabar Gold and Diamonds have come out with such plans to keep traditional purchases going on an auspicious day and also to provide a shield to their customers from the price volatility of the precious metal, industry officials said.

Akshaya Tritiya is an annual festival considered auspicious in many regions for beginning new ventures, marriages and investments.

An official of Malabar Gold and Diamonds said the benefit of the plan will be "available up to 30 days from the lifting of the ongoing lockdown", while Kalyan Jewellers and its online arm Candere offer booking of jewellery at 10 per cent advance, and EMI facility up to next six months with security against gold rate.

Other jewellery retailers such as Tanishq and Senco Gold and Diamonds are also offering discounts to attract customers to purchase jewellery online on the auspicious occasion.

"During the Akshaya Tritiya online sales offer that runs from April 22 to 27, we have witnessed 10-15 per cent sales compared to that of last year's. As all our offline stores are closed now due to the lockdown, we are experiencing customers preference for buying bars, coins and making the token advance," Senco Gold and Diamonds Executive Director Suvankar Sen said.

An official of the All India Gem and Jewellery Domestic Council said most of the large retailers expect 80-85 drop in sales on the Akshaya Tritiya this time compared to last year, as physical stores remain closed during the lockdown.

"They are going digital. But, small single-store jewellers are the worst-hit as they don't have any online channel to carry out business," he said.

"Large house will get our share of businesses this season through online sales. As we are not able to open our stores due to the lockdown," Sanjay Karmakar, a jewellery store owner in Dhakuria area of the city, said.

"High gold prices, logistic constraints on delivery, uncertainties surrounding wedding schedules, income anxieties and lockdown in various degrees make it an unusual period that is bound to seriously restrict gold demand," Somasundaram PR, Managing Director, India, World Gold Council, said.

Digital platforms could facilitate customers "token purchases in urban areas and support the tradition but they are not a significant alternative to the brick and mortar sales", he added.

(Published 26 April 2020, 16:13 IST)

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