scales tilt towards gold
dubai — After a subdued first quarter, UAE retailers are optimistic that the upcoming festive season would witness a significant rise in jewellery sales. Demand received a boost in December as consumers rushed to make their purchases before a 5 per cent value-added tax (VAT) was imposed on January 1, 2018. “As expected, the first month of the new year was relatively slow due to the general public getting accustomed to the new VAT regulations,” Anil Dhanak, managing director of Kanz Jewels, said.
However, retailers said that sales gained momentum in February-March and witnessed a modest growth in terms of revenue.
They believe that the upcoming Akshaya Tritiya, ongoing wedding season and Eid Al Fitr will witness around 15 per cent growth in gold and diamond jewellery sales.
“We have the festive period of Akshaya Tritiya falling in Q2, hence we are hoping to start with a bang,” Joy Alukkas, chairman and MD, Joyalukkas Group, said.
“We are optimistic that the advent of Akshaya Tritiya and the wedding season should bring sales momentum,” T.S. Kalyanaraman, chairman and managing director, Kalyan Jewellers, said.
Buying gold on Akshaya Tritiya is a popular tradition among Indians since gold is the ultimate symbol of wealth and success.
“The dynamics of the economy and the consumer needs in jewellery are changing, so the only thing we need to do is work on reviving our plans to this changing times and evolving our designs and offers to current consumer demands,” Alukkas said.
Echoing the sentiment, Shamlal Ahamed M.P., managing director — international operations, Malabar Gold & Diamonds, said Q2 has some favourable business periods like Akshaya Thritiya on April 18 and visitors coming from India to the UAE due to school summer holidays.
“Overall, we are expecting Q2 to be better than Q1 in the UAE,” Ahamed said.
Tourists to drive sales
Karim Merchant, Group CEO and managing director, Pure Gold Jewellers, said with Dubai’s growing economy and other developments that are taking place ahead of Expo 2020, the UAE has witnessed an influx of tourists, which has transformed the UAE’s retail landscape drastically.
“Our outlook for the second quarter this year is positive — we expect a good single-digit growth as people have adapted to VAT implementations and we keep abreast of the market dynamics and changing consumer trends,” Merchant said.
Kalyanaraman said the UAE is the hub for gold jewellery in the region and continues its dominance due to the quality of gold and the extensive range of designs and styles.
“Purchasing gold is an important part of many cultures and traditions and the same holds true for Indians
The advent of Akshaya Tritiya and the wedding season should bring sales momentum T.S. Kalyanaraman, chairman and managing director, Kalyan Jewellers
in the UAE. And this continues even as the market forces change. There is a huge shift that has taken place in the retail demand for gold and diamond jewellery in India and in the GCC region. A few years ago, people just wanted to take some gold jewellery with them when they went back to their home countries, but now they are brand-conscious, design-conscious and want an ambience when they shop,” he said.
Chirag Vora, managing director of Bafleh Jewellery, said in terms of retail, there was a 30 per cent
We expect a good single-digit growth as people have adapted to VAT implementations Karim Merchant, Group CEO and managing director, Pure Gold Jewellers
drop in sales year on year whereas there was a drop of over 50 per cent drop in sales in wholesale.
“One primary reason could be a lot of pre-VAT purchases by the consumers at the end of December 2017,” he noted.
Contrary to the general sentiment, he said sales in the second quarter also look weak because of the global weakness in jewellery sales as well as the pressure of resistance to the introduction of 5 per cent VAT.
— riaz@khaleejtimes.com
Overall, we are expecting Q2 to be better than Q1 in the UAE Shamlal Ahamed M.P., MD — international operations, Malabar Gold & Diamonds