Gold rates fell amid the Covid induced lockdown in the country.
Jewelers in India have started selling gold for a little over $1 online after the pandemic upended sales, forcing them to reassess traditional ways of doing business.
Sales crashed last year in the second-biggest consumer after a nationwide lockdown shuttered stores across the country. But it also led to a bump in India's nascent market for online gold sales. That's pushed jewelers such as Tata Group's Tanishq, Kalyan Jewellers India Ltd., PC Jeweller Ltd. and Senco Gold and Diamonds to launch offers to sell gold for as little as 100 rupees ($1.35) either directly on their websites or through tie-ups with digital gold platforms. Consumers can take delivery once they have invested enough for at least 1 gram of gold.
Digital gold sales aren't new to India, with mobile wallets and platforms like Augmont Gold For All, and World Gold Council-backed SafeGold offering the product. Jewelers had so far shied away from selling such products online, restricting them to their stores as the bulk of purchases in India are still made in person.
"Covid, obviously, has changed the mindset of a lot of jewelers and they have also been proactive in selling jewelry online. So this is just the extension of the whole mindset," said Ketan Kothari, director at Augmont Gold, which has more than 4,000 jewelers as partners.
Festive Demand
The jewelers have launched the offers just as the festive season begins in India, when gold demand peaks. Digital purchases are rising as more Indians warm up to buying via the internet. That, along with a more technology-friendly, younger generation of consumers is expected to boost the sector.
"We have been witnessing a renewed interest among consumers, especially youngsters, who are looking to make systematic investments in the yellow metal," according to Ramesh Kalyanaraman, executive director at Kalyan Jewellers.
While online gold purchases, which includes the sale of ornaments on jewelers' websites, accounted for only about 2% of the overall sales value in 2019, the bulk of these transactions were made by people under the age of 45, according to a World Gold Council report last year.
A drop in gold prices has also boosted volumes on the platforms, said Gaurav Mathur, founder of SafeGold. said. People perceive the current gold prices to be low and they are more used to transacting digitally across categories and not just gold, he said.
"Since February last year, we have seen a 200% rise in sales on our platform with most consumers snapping up coins and bars in the range of 3,000 to 4,000 rupees," Augmont's Kothari said. "During the pandemic, buying gold in the digital form has gained immense popularity and we expect sales to increase by 20%-30% this festive season compared with last year."