Shops Shut, No Demand: Akshaya Tritiya to Lose Sheen Amid COVID

With gold trading at an all-time high, consumers are keen to sell their wares but demand is low and so is cash flow.

Updated
India
3 min read

Video Editor: Purnendu Pritam

While Akshaya Tritiya in 2019 saw the sale of close to 33-35 tonnes of gold on a single day, this year promises to be much leaner when it comes to the physical sale of gold jewellery, coins and blocks, due to lockdown imposed to contain the spread of coronavirus.

Not classified an essential item, jewellery stores and showrooms across the country have been shut for over a month, since mid-March and jewellers are worried about losing sales, that tended to double or triple, in the month leading up to the day considered auspicious for buying gold.

Jewellers say that the loss of sale would hit their businesses by 20-30% with the extended lockdown, spelling doom for sales even after it lifts, as people would be low on cash and more interested in spending that money on essential goods and services.

“Jewellers are worried that the auspicious Akshaya Tritiya will see close to zero physical sale of gold this year, due to the coronavirus lockdown. With gold trading at an all-time high, consumers are keen to sell their wares but demand is low.”
Anuj Gupta, VC, Angel Broking

‘Slump in Sales, No Interest in Buying’: Jewellers

Big and small jewellers across the country are facing the same issue: closed markets and zero interest in consumers. Many of them spoke about how the high rate of gold was making customers call them and they are eager to sell. However, customers do not have the cash and resources to make such transactions materialise.

Normally recorded above average in some cases, 50% of the annual sales during the month preceding Akshaya Tritiya, jewellers are anxious about making up the losses. Additionally, they are unsure about receiving any government aid.

“Whatever jewellery the public buys is seen and bought after much care, so online sales market is not that much. Since the showrooms are shut, physical sales are equal to zero. I doubt that even after 3 May the lockdown will end. It may extend to 15 May or 30 May. So our sales this year, will be reduced by 20-30% and even when the markets open, gold is not considered a necessity. People will look after their other needs and take care of the home and hearth, clothes, school fees and then comes jewellery,” said Mahindra Singh Tater, a jeweller with stores in Surat and Mumbai.

Several jewellers are small and medium business owners, who have no alternatives to make sales from like an online portal.

“Akshaya Tritiya has been good for us in the previous years and we have had good sales always during that period but this year is very different because of the crisis we are all in. Our stores are shut for the past month and we don’t expect any sale at this point. We don’t have an online presence,” said Sheena Bharwani, of Bharwani Jewellers, Lucknow.

Others are unable to make sales happen despite posting on Facebook, Instagram and social media.

“We can post our designs on facebook, Instagram or whatsapp and for which there have been a lot of inquiries on that but we ave not been able to convert it into real business.,” said Krishnamurthy, Former President of Jewellery Association in Coimbatore.

Options to Buy Gold Online

Investing in the commodity has also long been regarded a sound investment, with gold being one of the highest traded commodities in India.

You can buy gold online via mobile wallets such as PayTM, PhonePe and under the Gold Rush Plan of Stock Holding Corporation of India. All these options to buy gold are offered either in association with MMTC-PAMP or SafeGold or both.

The Sovereign Gold Bond (SGB) scheme FY 2021, launched by the Reserve Bank of India (RBI) is a viable alternative to consider with the government offering 2.50 per cent interest per annum, payable semi-annually.

“While physical jewellery wont be available around this time, the government has also launched the sovereign gold bond, which can be traded. Banks are also open so one can buy gold coins. Or also buy the gold ETF or purchase from any of the online businesses,” said Anuj Gupta, deputy VC, Angel Broking.

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