Value of Diwali Sales Increases But Volume Drops

Diwali SalesIndian jewelry retailers experienced an increase in Diwali sales by value thanks to higher gold and diamond prices, but sales volume declined.

”Diwali sales were good, primarily of gold jewelry,” said Rajesh Mehta, the chairman of Rajesh Exports, which sells its jewelry under the Shubh Jewellers brand in India. ”However, diamond jewelry sales for us were stagnant. We didn’t see too much excitement there. That’s because prices were very high and people wanted to buy more gold jewelry.”

Mehta stated that sales volume for the brand was good since the company increased its number of retail stores to 73 across the country. The Bangalore-based Rajesh Exports opened 25 new retail stores in the southern state of Karnataka on October 24 on the occasion of Dhanteras, an auspicious day for gold purchases in India.

”We are looking at rapid rise in sales volume, primarily because we are increasing the number of stores,” Mehta said. The company plans to open 15 stores in the next four months, he added.

Deepakbhai Tulsiani of Dwarkadas Chandumal Jewellers stated that sales were lower in the past two to three months leading up to Diwali, the festival of lights, which was celebrated on October 26, but improved in the past 15 days because of the festival.

”However, the volume has gone down because of higher prices as compared with last year,” he added.

Gitanjali Group, which retails diamond jewelry under the brands Gili, Nakshatra, Asmi and D’Damas in India, said that that overall the Diwali sales were very positive and the company had total sales of approximately $82 million (INR 4 billion).

”Out of total sales, 60 percent came from gold and 40 percent from diamonds,” said Mehul Choksi, the chairman of Gitanjali Group. In 2010, diamonds contributed 60 percent of the total Diwali sales for the group. Choksi said that this year, diamond sales went up by 40 percent in terms of value, but remained flat in terms of volume. Gold rose 60 percent in value and 10 percent in volume terms, he added.

Choksi explained that overall smaller items were the best sellers, while gold coins were also a very popular item. He added that while bridal sales were generally good, smaller bridal three-piece-sets did well.

C. Vinod Hayagriv, managing director of C. Krishniah Chetty & Sons, stated that Diwali sales were good considering the economy is very tight. However, overall sales volume dropped compared with 2010 levels. He added that gold jewelry sales volume was flat, while silver jewelry had a decent showing.

”There was a fall of about 20 percent in diamond sales volume because diamond prices were unnaturally high,” Hayagriv said. ”This was not unknown. It was expected from June because of high prices.”

Mumbai-based jewelry retailers said that there was good demand for light-weight jewelry and gold coins from consumers.

”Now consumers are asking for light-weight gold jewelry as higher prices has affected the consumers’ purchasing power,” said Swapnil Gandhi of H. Kishor Kumar Jewellers.

Jewelers said that they were optimistic about the upcoming wedding season in India and expect sales to pick up going forward. The wedding season will continue through March and Mohanlal Otarmal Jewellers expects good business during this period, according to Rakesh Jain.

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