Growing popularity and awareness among consumers are set to drive platinum demand by 50%
Growing popularity and awareness among consumers are set to drive platinum demand by 50% in India for the next couple of years. Moreso, aspiring customers’ desire for a change from the perennial gold with higher possibility of returns on their investment is likely to pull platinum demand in India.
Jewellers believe India’s platinum demand today at around 15 tonnes. But, its popularity is increasing day – by – day as the metal is considered as rare with estimated returns higher than gold. Since, platinum price has been sustainable lower than gold for the last over two years, its price may surpass gold soon which holds higher possibility of returns.
“This is in the initial growth stage so we expect demand to grow over the next few years. We are looking at an overall 40 – 50% growth with some part from organic growth and other from market expansion for the coming season,” said Vaishali Banerjee, Country Manager India, Platinum Guild International (PGI).
Platinum has witnessed a sharp growth where it has more than doubled over the last 2-3 years due to several reasons. The first three quarters of 2012 for platinum jewellery has been positive. While retailers continue to sell platinum jewellery to their existing customers, a large part of the business comes from new customers. Newer markets have seen 100% growth, while existing markets have had over 50 – 70% year on year growth consumer off-take sales at the retail level.
While platinum was quoted in London at $1545.50 an oz, gold remained at $1713.95 an oz in early afternoon trade. In India, however, gold was quoted around Rs 31,000 per 10 grams against platinum at around Rs 45000 per 10 grams.
Platinum provides an opportunity to offer something new to existing customers and attracts new customers who are keen to buy platinum jewellery. While retailers continue to sell platinum jewellery to their existing customers, a large part of the business comes from new customers.
There is a price advantage of platinum being more or less at par with gold or below. The consumer sees this at an advantage to convert their desire for platinum. Current research conducted with consumers across India shows that familiarization and knowledge about platinum has grown and the desire to own platinum is much higher with the belief in platinum is growing stronger. They understand and now prefer to have high quality diamond jewellery set in platinum. People are also now looking at plain platinum jewellery in chains, bands and bracelets, etc.
Many retailers also have their own initiatives with their new range/ collections in platinum which has also led to the growing interest and buzz. There are also bullion traders offering platinum bars and coins today. Indian consumers look at a store of value and like all metals it is traded in the metal exchange and that determine the metal price. Hence given the value of platinum, recently platinum contracts in demat, e-platinum, the first of its kind in Indian commodity markets has been launched. With the metal showing consistent growth over the years and not volatile, today many are considering platinum bullion purchase for long term investment. Platinum metal trading is available at NSEL, MCX, RSBL and other leading bullion dealers.
There are many occasions in a woman’s life where she gets jewellery and platinum is meant for some of them. Platinum is purchased as a gift of love could be between couples, parent daughter or child, siblings, etc or as self reward (self purchase) and normally platinum is symbolic of milestones occasions in a consumers life.
PGI has developed the ‘phase 2 of Platinum Day of Love’ communication, a regular interaction with retailers and consumers, which will further strengthen the symbolism of platinum with everlasting love. “We have seen the buying occasion for Platinum Day of Love extends to engagements and weddings and in some markets to festivals, birthdays and anniversaries. In the more traditional markets
it finds relevance post marriage; gold still holds a strong position for the occasion of marriage. While continuing to build on the core segment, platinum love bands, our efforts will be channelised to see that the category moves up the value chain and retailers take forward the category into other jewellery types,” said Vaishali.
Jewellery retailers like Gitanjali Gems and Orra have received encouraging response for their platinum jewellery demand on this festive season.
Gold prices are likely to ease to Rs 30,500 per 10 grams in the near term due to strengthening of rupee, experts said.