Indian Gold Book:Indian Gold Book - Gold Bars Worldwide
Indian Gold Book:Indian Gold Book - Gold Bars Worldwide
Indian Gold Book:Indian Gold Book - Gold Bars Worldwide
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SUMMARY AND POSITIVE FINDINGS<br />
POSITIVE FINDINGS<br />
Retailers draw attention to many factors that will support demand for gold jewellery over the next decade.<br />
Population. Forecast to increase by 17%.<br />
Economy. Annual GDP growth of 3 - 5% in real terms would grow the economy by 50% or more.<br />
Underground economy. For many families, gold jewellery will continue to act as a discreet, tradable asset.<br />
Exchange control. If it continues, as expected, gold jewellery will remain an important hedge in the event of a rupee<br />
devaluation against the US dollar.<br />
Insecurity. India is not a welfare State. Most people will retain a sense of financial insecurity. <strong>Gold</strong> jewellery’s role as a<br />
tangible asset will continue to be important.<br />
Cultural tradition. All classes, although the commitment by class may vary, will continue to purchase plain (or studded)<br />
gold jewellery.<br />
Middle class. According to NCAER, the middle class is expected to increase by around 40%. Individual families may buy<br />
less, but the number of middle class families will increase.<br />
Women. For most married women, gold jewellery will remain an important personal asset.<br />
Adornment. The dimension is strengthening. Lighter weight “wearable” gold jewellery is viewed as a new market<br />
opportunity with much potential.<br />
Self-purchases and small family gifts. Both categories are expected to become more important as the economy grows.<br />
Sentimentality. The bulk of marriage-related jewellery is regarded as “sticky” and unlikely to be dishoarded. Although<br />
some is dishoarded, sometimes within months of the wedding, retailers frequently refer to “sentimentality” as a strong<br />
restraining factor.<br />
Rural. An enduring rural commitment to owning gold jewellery is expected to underpin the market. Its proportion of the<br />
population is forecast to change only from 71% to 68% by 2011.<br />
PERSPECTIVE<br />
• India is in a period of transition as it gradually emerges from its Third World status.<br />
Attitudes to owning gold jewellery for “adornment” and “investment” purposes are no longer homogeneous across the<br />
population. Among the urban/rural, rich/poor and young/old, they have started to diverge.<br />
The divergence is the outcome of varying rates of economic and social change among the different population groups.<br />
As a broad generalisation, among the urban, rich and younger populations, the motivation to purchase large quantities<br />
of gold jewellery has weakened.<br />
Among the rural, middle and lower classes and older populations, the motivation to purchase large quantities remains<br />
strong.<br />
• Although cultural and social change is regarded as irreversible, the pace of change will vary greatly among<br />
the many population groups.<br />
For most groups, it is likely to be gradual. It should not be assumed that the attitudes of the urban top end reflect those<br />
of the bulk of the population.<br />
As retailers stress, the primary market for gold jewellery is not the very rich or the very poor, but the emerging “middle<br />
class” (upper middle, middle and lower middle) not only in major cities but also (and especially) in the rural areas.<br />
AN INTRODUCTION TO THE INDIAN GOLD MARKET 21