Indian Gold Book:Indian Gold Book - Gold Bars Worldwide

TRADITIONAL JEWELLERY RETAILERS
SIZE
A relatively small number of retailers appears to account for a high proportion of gold jewellery sales
nationwide.
Although most retailers are cautious about revealing their own sales, and estimating the sales of their competitors, some
general comments can be made.
• There appear to be several thousand outlets nationwide that sell more than 300 g daily (on average during a year).
Some outlets sell more than 1 kg daily. Many large retailers sell 50 times, some 100 times, as much as small outlets.
• In most of the cities visited, the top 10% of outlets are reported to account for 50% or more of total jewellery sales.
More than 50% of the total number of outlets in their cities are regarded as selling less than 50 g daily.
• In the small towns and villages visited, although there can be large and dominant outlets in some, sales generally appear
to be more evenly spread across many small outlets, most appearing to sell less than 50 g daily.
Anecdotal evidence (at this time) suggests that a very high proportion (perhaps 75%) of the approximately 300,000 outlets
in urban and rural areas sell less than 50 g daily, many less than 10 g.
It also suggests that less than 15,000 large family retailers may account for as much as 30% or more of gold jewellery sales
nationwide.
METHODS OF PAYMENT
Retailers accept payment in 3 forms: cash, old jewellery and coins/bars. The amount of old gold jewellery
recycled is substantial.
Although the sample of urban and rural retailers is small, the range and indicative typical amounts were recorded (as a
percentage split) as follows.
URBAN Range Indicative estimates
Cash 40 - 85 70
Old jewellery 5 - 60 25
Coins/bars < 1 - 10 < 5
Total 100
RURAL
Cash 30 - 80 60
Old jewellery 20 - 70 35
Coins/bars < 1 - 10 < 5
Total 100
Anecdotal evidence suggests that in 2001 the split nationally may have been approximately: cash (65%), old jewellery
(30%) and coins/bars (less than 5%).
Urban retailers observe that the amount of old jewellery exchanged has increased over the past 5 years. The proportion
had risen for many from 15 - 20% to 25%.
Most rural retailers indicate that the level of exchange is normally high, but tends to fluctuate according to local economic
conditions.
When visiting retailers in the west and south in May 2002, almost all reported that exchange had increased significantly due
to the higher gold price, alongside a depressed economic environment. At times it had exceeded 50%.
Old gold jewellery
Old jewellery is exchanged mainly to buy new jewellery for marriage purposes, to replace worn-out jewellery, and to obtain
fashionable new designs.
Marriage jewellery. Although the wealthy tend to pay for new jewellery mainly in cash, the middle and lower classes tend
to rely a lot more on the exchange of old jewellery accumulated over many years.
Worn-out jewellery. As bangles, chains and earrings are usually worn on a daily basis, many customers exchange broken,
dented and scuffed pieces. High caratage jewellery is prone to wear and tear.
“Fashionable” jewellery. Exchanging items, even if bought only months or a few years previously, for new jewellery with
fashionable new designs has grown significantly over the past 5 years, mainly by the high and upper middle classes.
The amount of old gold jewellery exchanged can greatly influence the amount of gold imported, as well as annual estimates
of the amount of jewellery fabricated and consumed.
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AN INTRODUCTION TO THE INDIAN GOLD MARKET