Corporates prefer gifting vouchers than 'costly' gold this Diwali season

With gold having become 20 per cent pricier this year, corporates have shifted to vouchers for buying bullion or jewellery to appease their clients, customers, and employees this Dhanteras.

Many corporates have placed huge orders for purchase of vouchers at 10-15 per cent discount. Earlier they used to purchase gold coins — mostly in 5g, 10g, and 20g denominations — depending on contributions from each channel partner in the growth of their business. 

“The order size for Kalyan Jewellers has moved from gold to vouchers that are easy to redeem. Vouchers allow customers to buy bullion or jewellery. This year, we have witnessed close to 30 per cent increase in corporate voucher sales,” said Ramesh Kalyanaraman, executive director at Kalyan Jewellers.

Trading currently at Rs 38,296 per 10g, standard gold prices have appreciated by 20.4 per cent over the past one year, from the levels of Rs 31,810 per 10g last Diwali. Silver prices, too, have spiked by 19.2 per cent to trade at Rs 45,560 a kg on Thursday, from the levels of Rs 38,230 a kg a year ago.

“While gold coin purchases are not showing substantial growth this season, they are not indicative of a decline either. Gold jewellery purchases are showing better signs growth than coins this festive season,” said Sandeep Kulhalli, senior vice-president (retail and marketing), Tanishq — one of India’s largest branded jewellery retailers.

In July–August, the jewellery-buying sentiment was somewhat muted due to high gold prices. But elevated bullion prices haven’t dissuaded buyers either. Kalyan Jewellers estimates 15 per cent growth in overall sales this festive season and has huge pre-book orders for lightweight jewellery.

“There is a big jump in gold jewellery festive sales in the last five days. Overall, we estimate phenomenal growth in gold and diamond jewellery sales this year,” said Kulhalli.

Meanwhile, jewellers are also witnessing a shift in consumer sentiment to diamond jewellery due to massive discounts being rolled out by jewellers and the prices of diamonds having stabilised in the past one year. 

Tanishq, for example, offers 25 per cent discount on the value of diamond jewellery and waivers on making charges on gold jewellery. Kalyan and other jewellers, too, are offering massive discounts and free offers on purchase of jewels above a value threshold.

“With Dhanteras on Friday, the footfall at stores have picked up in the last few days. We are also seeing a surge in demand for gold coins, both at our stores and online. However, from a corporate gifting point of view, the demand so far is not that significant and is likely to remain subdued,” said Shaankar Sen, chairman and managing director at Senco Gold & Diamonds, and vice-chairman of the All India Gem & Jewellery Domestic Council.

Festive cheer

• Bullion prices have risen 20% in the past one year
• Demand for gold coins has declined
• Consumer sentiment has been improving over the past few days
• Demand for wedding and lightweight gold jewellery has also seen a pick-up
• Sale of diamond jewellery has gained traction, following steep discounts