INDIAN JEWELLER (IJ) Dec - Jan 2020

A further hike on GST is on the cards
After the GST Council meeting in
December last year, there is a rumour
that GST may be further hiked from 3
per cent to 5 per cent. If GST is increased,
the effects on the industry will be disastrous
according to jewellers. “They should reduce
the GST rate or leave it at what it is. If they
decide to increase, it will be a total catastrophe.
The current GST is amounting to 100 Rs
per gram which itself is a lot ,” adds Senthil.
According to World Gold Council (WGC),
there has been a 32 per cent decline in India’s
jewellery demand at 101.6 tonnes for July–
September 2019, against 148.8 tonnes for the
corresponding quarter last year. WGC also
reported an overall decline of 5.3 per cent to
395.6 tonnes for January–September 2019,
against 417.9 tonnes reported for the same
period last year. If more GST is levied, the
overall tax incidence will work out to 15.5 per
cent, a portion of which in turn will be levied
on the consumer, making them more skeptical
about buying jewellery. “There is already a
12.5 per cent duty and 3 per cent GST. Gold
from banks is always expensive and even
the organized players are feeling the pinch.
Consumers are already looking at GST as a
dampener, a further hike will keep them away
from stores and this will lead the industry to
not comply with the policies,” adds Mansukh.
When gold prices started rising initially in 2019,
consumers were skeptical because they thought
price rise was short lived. So the second quarter
was very slow for us. The feedback from consumers
was that ‘the prices will go down.’ As Diwali season
began people started realising that gold prices are
here to stay and so the 3rd quarter went really well
and we were able to cover the deficit of the second
quarter. Recent gold prices are at an all time high
and consumers have a little bit of a negative sentiment
thinking it might go down. But since prices have again shot
up in January, we had a very good sale. People are coming in,
booking jewellery as well as gold price, so that they can take
save on the cost of higher gold prices
Vaibhav Saraf, Aishpraa Gems and Jewels
Tech not disrupting;
consumers still
want to touch & feel
their jewellery
Jewellers in India are not utilising
data in an effective way. In that sense
both retailers and consumers have
not hit the level of maturity to drive
their entire business to augmented
reality. While other sectors are seeing a
significant amount of their sales driven
by augmented and virtual reality, there
is still a lot of time till consumers are
warmed up to the idea of buying high
value items like jewellery buy merely
looking at it on a screen. “Because of the
grey area in our industry, lot of data is
not captured. Machine intelligence can
only work if the data is fed in. If you are
averse to collecting that data, he cannot
use AI in his favour. Big players have
been able to tap into it. We use AI in a
big way and we also use analytics. But
the problem remains – how to ask the
end user, who is personally present at
your store, for information in a manner
which is not offensive? And then how do
you feed it in? The entire ecosystem has
to be created,” adds Himanshu. Indian
women want to wear their jewellery and
see. “This is definitely still a touch and
feel market. Jewellery is not an impulse
purchase,” adds Senthil.
INDIAN JEWELLER | december 19-january 2020 | 73