RECESSION? Forget its impact on Gold Buying, says Commodity Online from Kochi, India.
Gold continues to be the most traded commodity in the southern Indian state of Kerala. The word recession has got nothing to do with it.
Kerala accounts for 20% of India's gold consumption annually...and India in turn accounts for about one-fifth of the world's annual gold sales. According to the Kerala Jewelry Manufacturers Association, the state is these days turning out to be one of the hottest destinations in the country for retail jewelry trade thanks to the ever-increasing demand and overall economic growth.
"Jewelry retailers from Mumbai, Gujarat, Jaipur and various other places are flocking to Kerala to tap the lucrative market here," says Association chief-patron P.V.Jose. He says that besides gold jewellery, outsiders are attracted to Kerala thanks to the huge demand for unconventional ornaments such as kundan jewelry (an ancient form of jewelry, using gold foil between gem stones and an enamel mount), filigree work (fine gold thread and wire), and stone-set jewelry.
Major players apart, small and medium scale retailers have sprung up all over the state, Jose goes on. The big business establishments in gold jewellery are already reaping the benefits of retail trade by way of huge increase in business, he adds.
Kerala has the largest number of gold jewelers in India.
About 500 kgs of gold jewelry is manufactured in Kerala each year, and a third of this is sold to sellers outside the state.
There are more than 5,000 gold jewelry and Gold Bullion retailers in Kerala, in addition to nearly 40,000 artisans engaged in the industry.
Thrissur continues to be one of the hubs of jewelry manufacturing in southern India, and it accounts for 3,000 large- and medium-sized factories and workshops.
The gold jewelry industry employs around 200,000 people directly and indirectly.
Around 150 top retailers and wholesalers participated in the Kerala Gem and Jewellery Show 2008 that organized from November 14-16 in Kochi.
According to P.T.Cherian, president of the All Kerala Gold and Silver Merchants' Association, gold is the central commodity for Kerala's economy. The show was organized in association with the global marketing group, the World Gold Council (WGC).
Buying Gold ornaments and Gold Investment has been part of the culture of Keralites for generations. Now Arrens Gold Souk International Ltd, a real estate developer, is setting up a shopping mall across 2.5 acres of prime-location land in Kochi, and one of the main features will be gold ornament showrooms.
In tune with the changing tastes of the younger generation, India's jewelers are also innovating with newer light-weight designs. White gold is also a favorite of the upper income consumers. In Kochi, customers seem to prefer chic western designs in "yellow gold" (an alloy of gold and copper), as well as "white gold" (mixed with nickel) and "pink gold" (gold with a rhodium polish).
More traditional jewelry is still in demand for wedding gifts and decoration. In Thiruvananthapuram, for instance, conventional jewelry with a contemporary twist reigns supreme.
Indian families invest in gold mainly for wedding dowries and gifts. But the metal also comes handy when in need of a loan. Banks are now eager to provide "gold loans" which are less risky than other types of retail loans. And the booming yellow metal market also gave a golden opportunity for several banks to cash in on. Even private banks such as ICICI and Federal Bank could sell of their entire consignments of Gold Coins within a short period of time, as retail investors rushed to take advantage of the recent sharp falls in prices.
Kochi is slowly emerging as the gold capital of Kerala. Bhima, Alapatt, Josco, A Geeripai, Keertilal, Tanishq and Kalyan have already covered the city with the yellow metal. The construction work of a gold souk is in full swing. Major jewelers from outside Kerala are also expected to invade this growing market. Kozhikode and Kannur remain attractive destinations for India's gold traders, too.
