Digital gold sales online gives jewellers reason to smile this festive season

Representative photo: iStock

Although Covid-19 and the subsequent lockdowns had dampened prospects for jewellers, they have reasons to look forward to the upcoming festival season.

A small shift is what has helped them see the bright side of things. Just like many other industries, they too have shifted their business online, and are now able to reach their customers and reap rich rewards.

Shuttered shops are a thing of the past as jewellers such as Tata Group’s Tanishq, Kalyan Jewellers India Ltd., PC Jeweller Ltd. and Senco Gold and Diamonds, etc. are offering gold to consumers online.

What is more, to attract all kinds of customers, they are offering the yellow metal at prices as low as ₹100 either directly through their portals or on digital gold platforms.

Advertisement

Platforms like Augmont Gold For All, MMTC-PAMP and World Gold Council-backed SafeGold offer the product after following due process that involves registration.

Under MMTC-PAMP’s gold accumulation plan, customers can purchase gold worth Rs 1,000 and in multiples thereof whenever they wish to. There is no requirement to pay any amount at fixed or periodic intervals.

The jeweller will accumulate and store the gold, with full insurance cover and security. The customers can ask for the gold to be delivered after they have invested for at least 1 gram of gold.

Also read: Amid COVID bloodbath, gold is the lifeline for most

Under the SafeGold route, customers can buy, sell or take delivery of gold in low amounts on their app or portal after registering an account. SafeGold allows customers to buy and withdraw their gold in small or lump sum amounts any day of the year.

Buyers can also purchase gold through popular digital wallets such as Paytm, Amazon Pay, Google Pay and PhonePe.

“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,” Ketan Kothari, director at Augmont Gold, which has more than 4,000 jewelers as partners, told Mint.

“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,” he 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.”

Jewellers have also launched offers for the festive season, a time when people make purchases. They feel that the younger generation, who are more tech-savvy, are more ready to deal online than the older generation.

Also read: Mandatory hallmarking for gold jewellery, artefacts from Jan 2021: Paswan

“We have been witnessing a renewed interest among consumers, especially youngsters, who are looking to make systematic investments in the yellow metal,” Ramesh Kalyanaraman, executive director at Kalyan Jewellers, was quoted as saying in the Mint.

According to a World Gold Council report last year, a bulk of the gold purchases online were made by people aged under 45 years.

Gaurav Mathur, founder of SafeGold. said that sales have been boosted by the dip in prices over the last few months.

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, according to Mint.

However, there are a few things to keep in mind while purchasing gold online, especially its purity.

“Digital gold purchased from MMTC-PAMP is more likely to be purer than that purchased from platforms in collaboration with SafeGold,” said Pranjal Kamra, CEO, Finology, told Mint.

Gold sellers charge a certain amount above the sale price and GST to customers on account of storage, insurance and trustee fee, etc., and a different amount for delivery or making charges, if you want it designed in a specific manner.

“Investors should understand the process of redemption along with applicable charges in case they are investing with intention of taking physical delivery,” said Sameer Kaul, MD & CEO, TrustPlutus Wealth Management.

Some experts in the field feel that the major disadvantage with digital gold is the lack of regulatory mechanism, due to which investors can lose their money.

“Gold funds come under the regulatory jurisdiction of SEBI. Investors can also easily invest in gold funds and redeem them through the mobile apps or websites of various mutual fund houses, investment platforms and marketplaces,” Naveen Kukreja, co-founder and CEO, Paisabazaar.com, told Mint.

CATCH US ON: