Akshaya Tritiya is one of the most auspicious occasions in Hindu religion. The word Akshaya means ‘Eternal’ and Tritiya means ‘third phase of the moon’. Akshaya Tritiya falls on the third lunar day of the month of Vaisakha in the Hindu calendar. Akshaya Tritiya is considered an auspicious day to start a business, construction of building or an investment. Buying gold on Akshaya Tritiya is believed to bring good fortune and prosperity. On the day, there is even a specific time period which is considered auspicious to buy gold, also called the shubh muhurat.1
A higher gold price, nation-wide lockdowns and concerns over household income curtailed gold demand on Akshaya Tritiya (AT) this year. The occasion fell on 26 April and early anecdotal reports indicate that sales were weak due to the challenging environment. The local rupee gold price (for 995 fineness) on AT was Rs 46,420/10g, almost 50% higher than last year’s price of Rs 31,496/10g. And besides the higher price, logistical constraints for delivery, concerns over income and the imposed lockdown combined to significantly impact festival gold sales.2
Some gold retailers enhanced their online presence in a bid to support sales amid lockdown. As stores were forced to close, some retailers focused efforts on improving their online platforms for gold sales, using digital channels to market their brand and offer promotions.
Our conversations revealed some recurring themes during AT:
- Retailers with local presence, strong brands and digital offerings witnessed modest sales. Retailers who have invested in their digital promotion channels have reaped rewards for their efforts. This investment, together with their strong brands and local presence, helped support sales. C. Krishniah Chetty promoted gold through various digital channels (online, email and WhatsApp booking), which helped to bump up online sales during the festival. Similarly, Senco Gold & Diamonds saw good online demand from consumers in the state of West Bengal due to its local presence and brand strength.3
- Some adopted innovative offers to attract consumers. Some retailers introduced novel ways of encouraging consumers to buy, such as providing opportunities to lock in prices, or offering gold ownership certificates or gold vouchers. For example, retailers such as Kalyan Jewellers offered attractive plans such as Double Gold Rate Protection4 giving the consumer the option to lock in prices for a 10% advance payment, while C. Krishniah Chetty Jewellers offered PAPER-GOLDTM5 to woo consumers during AT. With all such offers, gold delivery will become available only once the lockdown is over, at which time certificates and vouchers can be redeemed for physical gold.
- Marketing efforts were postponed by some retailers in the interests of staff and consumer safety. Kerala based jewellers and regional players, such as PN Gadgil & Sons Pune, chose not to promote gold through their online channels due to concerns regarding home delivery amid COVID-19 (see the video).
- Gold sales on established digital platforms were robust this year: As gold bought via digital platforms does not require immediate delivery, sales of gold via these platforms remained healthy. Paytm reported sales of 32kg of gold through its digital platform while Safe Gold also reported robust sales this AT.6 Another prominent digital gold platform, Augmont, reported gold sales on AT of four times its average daily sales year-to-date.
With no clear visibility on when nation-wide lockdown may end, the possibility that lockdown may be lifted at different times across different states, and consumer concern over income stability, it appears that COVID-19 restrictions persuaded many to defer making advance purchases through retail websites on this AT. Digital platforms are a nascent channel for gold buying in India, and purchases via this route are still currently small. Online investment activity, however, has grown significantly in India over recent years, as shown in our recent report Retail Gold Insights: India Investment. Mobile phone penetration means more consumers than ever have digital access at their fingertips. Retailers that can deliver a fulfilling digital experience for their customers during this period of innovation will establish a strong foundation upon which future demand may flourish.
Footnotes
1 www.gold.org/goldhub/gold-focus/2019/05/gold-shines-brighter-akshaya-tritiya
2 India implemented lockdown from 25 March 2020 to 14 April 2020. The lockdown was then extended to 3 May 2020.
3 Senco Gold & Diamonds has total 108 showrooms out of which 68 showrooms are based in the state of West Bengal sencogoldanddiamonds.com/our-stores
4 www.candere.com/trending/gold-rate-protection.html
5 www.ckcjewellers.com/papergold/. With PAPER GOLD plan, consumers can exchange these for physical gold (gold jewellery or coins) in next 11 months or withdraw booking at prevailing buyback rate. Consumers are protected in terms of gold rate as they can purchase at lower of CKC’s PAPER GOLD booking rate or the prevailing within the next 11 months.
6 http://www.ptinews.com/news/11422841__Gold-demand-on-Akshay-Tritiya-likely-to-plunge-95-pc$storyes. The World Gold Council and its affiliates are affiliated with SafeGold
