Mumbai: As a part of its strategic marketing initiative to boost retail demand of gold in India the World Gold Council is negotiating with top Indian retailers Reliance Retail and Pantaloon Retail India for marketing and supply of gold jewellery.
“We are negotiating with Reliance Retail and Pantaloon to help them identify and source gold jewellery from manufacturers in India and abroad,” WGC’s managing director Philip Olden said here recently.
“We will also provide retail training, merchandizing and advertising to retail players in India,” Olden said.
WGC is an organisation funded by the world’s leading gold mining companies with the aim of promoting demand for the precious yellow metal.
Reliance Retail is investing Rs25,000 crore in its retail foray, while Pantaloon has drawn up mega expansion plan in this segment.
“India is of critical importance to us and we believe that having collaborative marketing initiatives will help boost gold consumption,” Olden said.
WGC strategy is to improve and transform the gold market in India. It’s annual spending on marketing initiatives in the country is estimated at $16 million, with its 12 Indian partners including leading brands like D’Damas and Tanishq.
“Our strategic plans for the next three years sees a 50% rise in our India budget,” Olden said.
The organization’s programmes in India are targeted towards stimulating a fashion-based market.
Gold jewellery is seen as lifestyle and the Indian consumer is now looking at contemporary styles for parties and occasional wear. The gold jewellery market in India is estimated at $9 billion.
According to Olden, several factors are driving gold’s demand in the country, such as rapidly expanding retail network and broadening of demand outside the wedding category.
The WGC is very optimistic about the Indian market. Gold consumption in the country is likely to cross the 1,000-ton mark for the first time if prices remain stable or grow steadily, he said.
The consumption of gold rose over 70% to 528 tonnes in the first half of the current year from 307 tonnes in the corresponding period last year. The consumption was a little over 700 tonnes in 2006, despite steady price, he added.
“If prices remain stable, we will continue to see strong growth,” Olden said.
“If there isn’t too much volatility in prices, the second half should also see this high rate of growth in consumption. Also, the festival and wedding seasons which create a strong demand, is just starting,” Olden added.