All that glitters is gold: Jewellery industry bullish on robust festive gains

The first half of 2024 has been a pivotal period for the jewellery industry in India, marked by shifts in consumer behaviour, regulatory impacts, and evolving market strategies. As the industry prepares for a robust second half, key players are reflecting on the performance, growth drivers, and consumer trends that have shaped H1. With significant events such as Diwali, Dussehra, and the wedding season on the horizon, the outlook remains optimistic, and brands are strategically positioning themselves for continued success.

In conversation with Adgully, key industry leaders, Saurabh Vidyadhar Gadgil, Managing Director, PN Gadgil Jewellers; Amit Pratihari, Managing Director, De Beers India; and Pelki Tshering, Chief Marketing Officer, Tanishq, share insights on the trends and shifts observed during H1.

Saurabh Vidyadhar Gadgil noted, “H1 has been good for the overall industry, largely due to the import duty cut, which has led to a surge in sales across the sector. We’ve observed similar trends at PNG, especially in August during Shravan, where we set records in various ways. The outlook remains positive, and we are optimistic about our performance.”

His perspective aligns with the general sentiment of a bullish market, with consumer confidence in jewellery and gold as an investment remaining strong.

For Amit Pratihari, the first quarter of 2024 was particularly promising for most retailers. He commented, “I believe the first quarter has been very positive for most retailers in the market, and as a company, we see it as a strong start. However, the last couple of months have been somewhat slow due to seasonal trends. Despite this, we are looking forward to the upcoming season with optimism, and I am confident that we will achieve double-digit growth.”

While there was a brief slowdown, the anticipation of growth in the festive and wedding seasons adds to the overall positive outlook.

Pelki Tshering from Tanishq also noted some fluctuations in demand, stating, “At the sector level, there might have been a bit of a slowdown, especially in gold, mainly due to the high gold rates, which led people to postpone their purchases. However, the beauty of the situation is that recently there's been a significant shift, with people either catching up on their postponed purchases or preponing their shopping for the wedding season.”

This insight underscores the resilience of consumer demand in the face of fluctuating gold prices, with anticipation building for the second half of the year.

High expectations from H2

Looking ahead to H2, the jewellery industry is set to witness some notable shifts in consumer behavior. Saurabh Vidyadhar Gadgil highlighted the continuing trend of consumers moving from the unorganized to the organized sector, remarking, “The rapid movement of consumers from the unorganized to the organized sector continues to grow. Despite prices rebounding after the import duty cuts, people’s interest in gold remains strong, which reflects both the strength of the Indian economy and the resilience of consumer spending.”

Gadgil’s optimism is rooted in the belief that the best is yet to come, with consumption driving the next phase of growth.

Amit Pratihari observed a shift in the types of jewellery that consumers are seeking. “They are increasingly looking for pieces with a more meaningful design language. People no longer want to buy just any jewellery; they want something that matches their personality and reflects their emotions.”

This trend reflects a more personalized approach to jewelry, where consumers are making more deliberate choices that align with their individual style and values.

Pelki Tshering pointed out that consumer behaviour doesn't change drastically between the first and second halves of the year, but the timing of purchases does. “When consumers buy, there are two lenses through which they make their decisions: adornment and investment. The investment factors can impact what happens in the first half versus the second half, but trends related to adornment remain consistent.”

With the heavy wedding season approaching, Tshering expects a surge in demand, aligned with the festive season.

In terms of growth and advertising spending, the outlook for H2 is positive across the board. Saurabh Vidyadhar Gadgil shared that PNG Jewellers plans to maintain their current efforts, noting, “We plan to continue allocating about 1% of the top line to advertising spend. Since we’re focusing on growth within Maharashtra, we won’t be investing heavily in brand building or marketing here but rather maintaining our efforts, which will positively impact our margins.”

For Amit Pratihari, the expectation is for continued growth, with De Beers aiming for 15% to 20% growth in the second half of the year. Pelki Tshering echoed similar sentiments, emphasizing on the importance of Q3, “The third quarter has always been a crucial period for the entire jewellery industry, especially because of Diwali, weddings, and other events. So, there will definitely be ad spend and investment aligned with how the yearly calendar unfolds.”

As the jewellery industry prepares for a dynamic second half, the combination of consumer trust in gold, evolving design preferences, and strategic marketing initiatives is setting the stage for continued growth. With leaders across the sector feeling optimistic, the outlook for H2 remains bright, driven by a mix of tradition, investment, and innovation.

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