It was all going well in the first three months, with a lot of pent up buying taking place and for the wedding season. But the resurgence in COVID-19 cases have upended all carefully laid plans. Image Credit: Reuters

Dubai: For a second straight year, Indians will not be in the mood to mark next month’s ‘Akshaya Trithiya’ with a visit to the jewellery store. For a second year running, COVID-19 is interfering with their plans, and this year, even more so.

“Indians are dealing with life-and-death issues right now,” said Joy Alukkas, Chairman of the jewellery store network. “While May 14 is still some time away, whatever’s been happening will impact the need to pick up gold on Akshaya Trithiya.

“And even if someone wants to come to the stores, it will depend on the status of the lockdowns in each state. Even on lockdowns, there are differences, with Kerala allowing a limited number of hours and Karnataka a full shutdown.”

Akshaya Trithiya is one of the most important dates in the Indian gold and jewellery calendar, which is when Indians pick up a few grams or more of the metal. For retailers, sales leading up to and on the actual day represent a sizeable chunk of their first-half of the year volumes.

Joy Alukkas has always been forthright when he talks about the gold market and consumer trends. He says a recovery in gold demand will have to wait until India gets a grip on COVID-19 spread. Image Credit: Supplied

Harrowing times

But with India confronting daily COVID-19 infections of 300,000 plus, and its healthcare systems chocked up, gold or any kind of non-essential shopping is farthest from minds.

“I don’t think anyone can take a ‘business as usual’ attitude – as we did at this time last year, we can only hope things will improve soon,” said Alukkas.

Upbeat first quarter

According to Alukkas, it was so different in the first three months of 2021. And the latest numbers from the World Gold Council confirm it. During this period, Indians bought 102.5 tonnes of gold, spending 431 billion rupees in the process. In value terms, this was the highest spend on gold jewellery during any first quarter.

There was much pent up buying as well as substantial spending on wedding related purchase. According to the WGC, “wedding-related buying supported jewellery demand through Q1, boosted by a degree of pent-up demand from weddings postponed from 2020. Organised retailers ran offers and discounts on making charges to lure consumers towards wedding purchases.”

But “the outlook for the coming quarter is, however, cautious. As new lockdowns are imposed in various areas of the nation in response to rising COVID-19 cases, consumer confidence has dipped.”

Online options?

Even before the pandemic strike, leading jewellery retailers in India had been experimenting with online selling options. Tanishq introduced a ‘pay from home’ service in those Indian states that were holding assembly elections, in addition to features such as video calling to retail stores and virtual jewellery try on.

But such buying and selling activity will need time to gather speed. “With traditional Indian jewellery, the need to see it in-store and the experience of trying on is what shoppers still want to do,” said Alukkas. “We have been operating our online portal for five years – take up is OK, but stores are still what Indians prefer.”

But right now, heading to a jewellery store will be taking a backseat in most Indians’ plans…