COVID-19 impact: Online buying of gold ornaments hits rock bottom

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The COVID-19 pandemic has changed the shopping habits of Indians a lot pushing them more towards online purchase to avoid visits to stores and run the exposure to infection.

However, one item that has steadfastly refused to lend itself to online purchase is gold ornaments.

Jewellers from different cities told Money9 that almost all customers prefer to visit outlets to touch and feel ornaments before buy it.

Whether it is Delhi, or Kolkata or Meerut, the experience is the same for all retailers.

Price Point

According to the India Bullion and Jewellers Association, the price of gold in bullion markets across the country has reached Rs 46,950 per 10 grams. This price is for 24 carat gold on April 28. The price of 23 carat gold stood at Rs 46,762 and that for 22 carat was at Rs 43,006.

On the other hand, 18 carat light was priced at Rs 35,213 and 14 carat at Rs 27,466 per 10 grams on April 28.

Online Option

Experts feel that the online gold market is for investors only and not for retail buyers who buy ornaments.

“The price of gold is falling due to lack of demand in the market. But, those who are investing in gold are buying online,” remarked Surendra Mehta, secretary, India Bullion and Jewellers Association.

Gold Rush

The sale of gold ornaments through online did not witness any notable growth over the past decade, concurred all prominent jewellers. They said that conventional outlets is still the preferred choice for buying gold jewellery since one does not want to spend a lot of money on something that demands a tactile feel and trying on physically before making the investment decision.

“In the past 8-9 years we have never witnessed any remarkable growth in online platforms. A mere 0.8%-1% of our total sales comes from online customers. This is despite we being present in all leading online platforms. We also have our own online platform,” said Subhra Chandra from PC Chandra Jewellers.

However, retailers now take orders online through e-commerce or social networking sites. According to Ravindra Kumar of Kundan Jewellers, Meerut Bullion Market, the business is gradually growing. The pandemic has opened up these new avenues and sale of gold jewellery have started through Instagram, Facebook also.

Turning the tables

Jewellery houses like Senco Gold and Anjali Jewellers have revamped their online platforms recently hoping for online customers. These retailers have their own apps and are present on e-commerce sites. Still there is no sale through this medium worthy of mention, retailers told Money9.

“We are using video calling, online booking, and booking on WhatsApp to supplement physical sales. But business growing marginally despite our best efforts with online sales just contributing 1%-2% of total sales. However, digital tools like video calling and WhatApp call are helping physical sales also.” confirms Suvankar Sen from Senco Gold.

Senco and Chandra both confirmed that light ornaments are more likely to be sold online than conventional 22 carat ornaments. Nose pins, earrings, pendants or rings are sold mostly in online medium.

“Mainly people in the age group of late 20s, 30s or early 40s are opting to come online to buy light ornaments. No heavy jewellery generally sold over this platform,” said Subir Sen from BC Sen Jewellers.

“Online business is not a easy game at all. Only light jewelery can be sold online. There are just about two or three customers every month who are buying gold ornaments through online mode, because, it is a business of trust. There is a risk involved of losing the ornament,” said Vivek Shekhar of Manohar Lal Sarafa & Sons, Meerut.

“Therefore, the emphasis is on running the business from the shop itself. The market of physical gold is and will remain much larger than the online market. Buying gold online can be considered better in terms of investment but, for jewellery only physical buying will work,” added Shekhar.

A representative from Kolkata’s Anjali Jewellers seconded the view of Shekhar. He also said that mainly youngsters between 30 years and 44 years opt for online shopping notching up about 1%-1.5% of the total sales for them.

Precautions

In cases of online shopping, all retailers take extra care while shipping the jewellery to the customers. Companies such as PC Chandra, Senco Gold and leading retailers insure the ornaments.

All the leading jewellers said it would perhaps need years of trust, assurance from jewellers and, most important, a change in customer inclination itself, for online sales to pick up.