Mumbai, Maharashtra -- (SBWIRE) -- 09/09/2014 -- India's platinum demand is likely to rise a staggering 35% in the calendar year 2014 on rapidly changing consumer preferences especially from bridal segment, which was earlier confined to gold and diamond.
A recent study by the apex industry body Platinum Guild International forecast India's platinum jewellery demand at 40 tonnes in 2014 on growing appetite of consumers of this white precious metal. In 2013, overall platinum demand stood at around 30 tonnes which saw an emphatic 41% growth from the previous year, of course from lower base.
While both gold and platinum offered negative returns in 2013 due to depressed sentiment in global economy. With the United States posted positive economic numbers which led to start of tapering in the monthly bond buying programme, investors started profit booking in gold. This gave a rise in demand of platinum as an alternative metal.
"Platinum has captured gold and diamond market in engagement and love band segments which is expected to grow significantly with the emergence of wedding. Even other segments in branded platinum jewellery have recorded significant jump in the last few years," said Vijay Jain, CEO, Orra.
Interestingly, platinum price in India in global markets was thrice that of gold few years ago. But, the gap narrowed with investors' skewed interest in platinum. With the global industrial activities remained under pressure on subdued economic performance, platinum demand was also under pressure being around two-third of platinum used for industrial purposes.
Now, introduction of new design and cuts, albeit in limited segment, platinum demand from jewellery sector has started moving up. Especially in India, with the price gap between gold and platinum narrowing down from over 100% (platinum was quoted with 100% premiums over gold in India) to 10-25% now depending upon the type of ornaments. "Consumers were a bit hesitant on the price front earlier. But, with the price difference narrowing down, platinum has become a preferred choice even for auspicious occasions. The metal continued to see lack of investors' interest, though," said Jain. The study - 'Retail Trade Barometer' reviewed and reported by Strat won Business Consulting with a cross section of retails from chain stores and independents who account for 50% of platinum jewellery sales, found retailers bullish for 2014.
Platinum versus gold performance ($/oz) Year Jan-01 Dec-31 Variations ($) Gold 2013 1,693.75 1,204.5 (-)29 2014* 1,225 1,298.75 6 Platinum 2013 1,566 1,357 (-)13.35 2014* 1,388 1,440 3.75 Source : Kitco.com, * 2014 data upto May 12
"There is a very strong consumer desire for platinum jewellery in India despite being the overall market still relatively small in a global context. But the market has been growing at an exponential rate. The outlook for 2014 and beyond is also extremely positive. There are many factors which provide the basis for continued growth - the success of the Platinum Day of Love programme, increased distribution across India with more retailers stocking platinum, product innovations and exciting designs, and platinum's powerful emotional connection with consumers, " said Nicholas Graham Smith, Chief Operating Officer of Platinum Guild International.
The retail forecast for 2014 looks very promising and there seems to bean opportunity to take this further. "Firstly, we have been very successful at utilising digital media and integrating marketing programmes that have positioned it well amongst the younger audience, making it emotionally significant for them. Once the knowledge of the value of platinum deepens, the demand will increase. Platinum Day of Love couple bands is the volume driver. Men's jewellery is a nascent category and it delivered very strong figures - some retailers reported doubling their sales. Also many have shown interest in stocking heavier items in terms of jewellery and PGI is evaluating the next segment of growth for the market,"said Vaishali Banerjee, Country Manager India, PGI.
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