De Beers taught us diamonds are forever. In India, we know that holds true for gold.
Gold is an intrinsic part of Indian culture. Indians grow up listening to the tales from Panchatantra where goodness is rewarded with pots of gold. When Indian women were not allowed to be part of the formal economy due to the pressures of patriarchy, they had but one asset to fall back on-gold.
Yet fewer Indians are buying gold right now. Gold demand fell nearly 17% last quarter and gold prices surged 18% year-on-year in June, according to the World Gold Council. The same month, the Aditya Birla Group-one of India's largest conglomerates-announced its own jewellery brand: Indriya. The group is the most recent addition to a market seeing increasing formalisation at a time when Indians' household savings are at a historic low and millions of people are taking out whatever little money they have to pour into stocks and mutual funds.
What explains this rising formalisation in a market that is visibly bleeding? One word: trust. Indian retail jewellery brands trust their countrymen to return to stores just as the festival season hits and then the wedding season kicks in. And Indians are willing to pay a premium to trust that the gold they are buying is genuine, pure and hallmarked, the designs they are getting are in line with the latest trends, and that there is assured return on resale.
Experts and branded jewellers seem steadfast in their belief that the stagnating demand for gold is temporary and people will queue up at stores again soon.
Golden Goose
This story is from the September 2024 edition of Outlook Business.
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This story is from the September 2024 edition of Outlook Business.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
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