Author: Paul Ploumis
14 Oct 2014 Last updated at 08:20:00 GMT
NEW DELHI (Scrap Monster): Demand for jewellery in India seems to be badly affected by the uncertainty in gold prices. According to Titan-the leading gold retail chain in the country, customers are holding back on expectations of further fall in gold prices. However, the company sees consumer confidence at its highest level and expects gold buying to accelerate during this festive season.
Bhaskar Bhat, Managing Director, Titan Co Ltd. stated that jewellery business contributes to nearly 80% of the company's business. Roughly three-quarters of the jewellery sales come from gold. There is a lack of consensus among customers with respect to gold price movement. Mixed reports by analyst community have only helped to add to uncertainty in gold prices. Even after 20% fall in gold prices during the past one year, consumers still anticipate some more downside for the yellow metal, which make them postpone their gold purchases.
The company expects a bounce-back in urban gold demand with the advent of festive season. Titan is well-positioned to be one of the greatest beneficiaries of the rising consumer sentiments. The improvement in discretionary spending by the Indian population is likely to benefit the company which has widespread presence across urban regions of the country.
Tanishq-Titan's subsidiary company was forced to stop its ‘Golden Harvest' gold jewellery purchase scheme in April this year, following the imposition of the new Companies Act by the Reserve Bank of India (RBI). The company has already received shareholder's approval for the revised scheme, which will be launched soon. The scheme contributed nearly 20% of the total sales.
According to Bhat, the company also aims aggressive growth in gold sales through e-commerce channel.