By Nilah Singh and Stephen Rego

 

Festivals and jewelry have been an intrinsic part of Indian culture throughout the ages. There are several festivals all across India that have traditionally been occasions for jewelry purchase. But today, increased promotions and marketing efforts by bodies like the World Gold Council, as well as the jewelers themselves, are creating greater interest and fueling jewelry sales.

India, a country with a population of 1.12 billion people living in 28 states and seven Union Territories and a nation whose peoples communicate in 22 recognized languages and 844 dialects, is a multi-racial, multi-religious, multi-cultural society. India is also the seventh largest country in the world, covering an area of 3,287,263 sq km and tracing its history back to 2500 B.C., to the Indus Valley Civilization, one of the four earliest known urban civilizations. In addition, India has perhaps the largest number of festivals in any political entity in the world.

 

Needless to say, the country has evolved into a rich tapestry woven in many-colored threads. Its intricate complexity means that there are several festivals specific to certain regions and cultures. Given the fact that the tradition of making and wearing jewelry can be traced as far back as the advent of the country itself (2500 BC), many of these are important occasions traditionally associated with the purchase of gold and jewelry.

 

The one festival that unifies most of the country in celebration and perhaps corresponds most closely to the “holiday” season in the western countries is Diwali. As traditional festivals are marked by the lunar calendar, this five-day festival takes place sometime in October or November. Out of the five days, each of which has its own significance, two are related to wealth. The first day of Diwali, called Dhanteras (Dhan means wealth), has been seen throughout the ages as a particularly auspicious occasion for gold and jewelry buying. The third day of Diwali is dedicated to Lakshmi Pujan (worship of Lakshmi, the Goddess of Wealth), when the deity is ritualistically propitiated for the prosperity of the family and the business. For some groups of Indians, particularly the Gujaratis (the predominant community in the diamond industry), this is also a day for chopdi pujan, when the books of accounts are worshipped, and new books of accounts are opened after due rites have been performed.

 

Twenty days before Diwali, there is a ten-day festival, Navratri (nine nights) of prayer and worship, which culminates on the tenth day in Dusssehra, also an extremely popular and auspicious festival linked to gold jewelry purchase. Dussehra is most popular in the north but is also celebrated in many other parts of the country.

 

Both Dussehra and Diwali are connected with one of the two best known mythological works of India – the Ramayana (the Story of Lord Ram), which have left an indelible imprint on the Hindu religion and the culture of the country (the other work is the Mahabharata, which deals with another set of kings and has as its central figure another well-loved deity, Krishna). Both works deal, in their own distinct ways, with the battle between the forces of good and evil, darkness and light. Legend has it that Lord Ram, who is considered to be the incarnation of the God Vishnu, and was the King of Ayodhaya (a northern kingdom of ancient times), was exiled for 14 years due to the political machinations of his step-mother. While living in the forest with his wife Sita and devoted brother Lakshman, Ravana, a demon King, abducted Sita. A long and bitter battle followed in which Lord Ram attempted to rescue Sita, which culminated in the destruction of Ravana, the ten-headed demon. (Literally Dussehra means victory over the ten-headed one). But the significance of this conquest is not merely seen in the physical, material sense. It is a metaphorical victory over evil, the forces of darkness and, at the most metaphysical level, a subjugation of the ten senses (as they counted in earlier times). Even today, the festival is celebrated by the recounting of the Ramayana through folk theatre for the nine days of Navratri and on the tenth day, huge larger than life effigies of the demon Ravana and his brother stuffed with firecrackers are set ablaze.

 

Exactly 20 days later, the festival of Diwali begins. It marks the return of Lord Rama to Ayodhyaya. And as his return fell on a night of the new moon, the darkness was sought to be dispelled by lighting many earthern lamps both to guide him safely to Ayodhaya and to welcome him home. The practice is followed even today as people all over the country decorate their homes and surroundings with tiny earthern lamps during Diwali, which is known as the festival of lights.

 

As Dharmesh Sodah, director of the World Gold Council, says, “Festivals have always been around in India and gold has been linked closely with the culture. Research by the WGC shows that consumers need a reason to buy. Festivals provide that occasion.” According to their estimates, purchases related to Diwali account for about 10 percent of the gold market.

 

Although festivals in India are significant purchase occasions, it is important not to forget weddings, which form an extremely important market segment. In fact, Dussehra and Diwali are the onset of what continues as the most important jewelry purchase season for India, taking into account the wedding period (roughly November to January), including Christmas and continuing until Valentine’s Day, which has also in the past few years emerged as one of the more important jewelry purchasing occasions.

 

Though gold either as jewelry or coins is the preferred product, diamond jewelry, branded jewelry, and platinum jewelry are all seeing the effects of the increased demand for jewelry.

 

However, the DTC, De Beers’s marketing arm has a slightly different outlook. “Diamond jewelry (DJ) purchases are more occasion-led, than festival-led,” says Prasad Kapre, business director of the DTC in India. “Diwali isn’t the major contributor to DJ sales. For us the major occasions are engagements, weddings, anniversaries etc. The largest chunk of DJ sales takes place from September until the end of February.”

 

According to research conducted by the DTC, festivals are the fourth largest diamond jewelry buying occasions after weddings, anniversaries and birthdays. Festivals account for 9 percent of all DJ sales in India. The fourth quarter is the period during which most diamond jewelry is bought in India (thanks to weddings, anniversaries and festivals), accounting for 36 percent of all purchases.

 

A few years back, the DTC launched the Diamond Season. “The objective of this was to extend the Diwali season sales,” says Kapre. “For this we have special promotions which start after Diwali.”

 

Kapre says that the strategy of the DTC would be to look for “big ideas” like the trilogy Journey concept but which would be something specific to India, rather than to take the festival route.

 

Creating New Occasions Out of Ancient Festivals

The power of marketing and how it can influence trends is clearly seen in the World Gold Council’s revival and popularization of another auspicious festival.

 

Says Sodah, “Though Diwali (Dhanteras) and Dussehra remain the most important festivals, we have looked at newer occasions like Akshaya Tritiya. There is a belief in the south that if you buy gold on this day, it multiplies. It is the Dhanteras of the south.”

 

Akshaya Tritiya is one of the four most auspicious days in the year. Traditional Hindus, and even many who otherwise do not strictly observe the rituals, often consult the charts for the muhurat, or an auspicious time, to conduct activities of significance like the launch of a business, a marriage, the purchase or entry into a new home and so on. However, on Akshaya Tritiya, one can do any of these things at any time, as there are no malefic influences at any time on this day. Although there are several legends associated with this festival, the strongest connection is with the second significant mythological work referred to earlier, the Mahabharata. The story goes that on this day the Pandavas (five brothers who were kings and represented the forces of good), received the Akshaya Pathram from Lord Krishna before they went into exile, as a result of which, they were provided with limitless food during their banishment. Akshaya literally means “that which does not diminish” (implying abundance), while a pathram is a bowl or container.

 

It is therefore believed that if you buy gold or jewelry on this day, it is multiplied throughout the year.

 

Around five or six years ago, the World Gold Council began localized promotions during this festival in the southern states of Tamil Nadu, Kerala and Karnataka with staggering results. Jewelers launched advertising programs and other special schemes and found that their sales multiplied immensely. In 2005, the WGC took this festival national.

 

This year, trade estimates are that 55 tons of gold were sold on the occasion of Akshaya Tritiya (which fell on April 19 and 20) in the country, against 38 tons last year. It is estimated that this represents about 8 percent of the country’s annual gold offtake.

 

Statistics, however, cannot adequately summarize the virtual hysteria unleashed around Akshaya Tritiya. Every jeweler has special offers and an advertising and promotional blitz hits the market during which consumers literally line up outside jewelry shops. Several jewelers also report that they have pre-booked orders for delivery on that day. Although the Akshaya Tritiya festival this year saw jewelers better prepared, both in terms of product stocking and security arrangements, last year it is reported that while some jewelers had to extend shopping hours, some even had to shut shutters as they could not cope with the crowds.

In addition, although traditionally this festival has been associated with gold and jewelry purchase, this year many other segments such as travel and hospitality, electronics and other goods tried to capitalize on consumers’ desire to spend.

 

One area that this festival has opened up is retail bullion. As liberalized laws and the traditional gold-as-investment mentality of the Indian consumer coalesce, bullion in the form of gold coins and bars has become a hot seller.

 

Organizations like the Gold Club of Chennai (GCC), which this year retailed 24 karat gold coins, ranging from 1 to 10 grams in weight, in its 200 retailers’ outlets, found them to be a lucrative proposition; they attracted a 4 percent premium, and a 100 kilogram sale.

 

However, a surprise entry in this field was the banks. Until recently, they were only associated with wholesale bullion sales, but now more and more are entering the retail bullion arena.

 

Recently, Reuters reported that although the gold coin market represents less than 1 percent of profits, many banks are “scaling up, [their presence] while others are plotting [an] entry.”

 

The Indian Overseas Bank (IOB) last year sold 25 kilograms of gold coins on Akshaya Tritiya, according to The Hindu Business Line, dated May 2006. The story quoted General Manager V. Krishnaswamy as saying, “Our 20 gram and 50 gram denominations have sold better than the 4 gram and 8 gram ones. These are serious investors we are talking about.”

 

While it is reported that the banks envisage a 25 percent growth annually in this segment, the ICICI Bank, which was the first entrant in this field in 2003 and is said to have sold about three tons last year, says it has been witnessing a 50 percent growth year-over-year.

 

The banks sell coins with Swiss Assay Certified 99.99 percent pure gold (999 gold), which are also available through retail jewelers. Higher margins on retail bullion – as much as up to 5 percent on 5 to 100 gram coins and up to 7 percent on low value ones, as compared to less than 1 percent on wholesale gold products – has made this an attractive option. Not to mention the brisk demand from consumers.

 

Other Festivals

In this land of immense diversity there is no dearth of festivals as one travels from north to south and east to west.

 

“There are several regional festive occasions that we also focus on at the local levels,” explains Sodah. “There is Onam and Vara Lakshmi in the South [and] Raksha Bandhan, Karwa Chauth and Guru Pushya Nakshatra that are popular in the west and north.”

On a larger scale, there is also the Durga Puja in the east, which coincides time-wise with the Dussehra period. All of these have also been traditional occasions for jewelry purchases, and companies have now begun enhancing their promotions during these festivals.

The Promotional Push and its Effects

“Apart from the wedding-related sales, the jewelry business in India is skewed largely towards major festivals ranging from the Navratri to Diwali and continuing up to Valentine’s,” says Mehul Choksi chairman of the Gitanjali Group, which has the largest collection of brands in the country. The wedding season for southern India and the Marwar region [a region of southwestern Rajasthan state in western India] falls pretty much around the Akshay Tritiya, while for the rest of the country [it] is more a period extending from December to mid-February.

 

“Thanks to the World Gold Council, the Akshaya Tritiya has been effectively established as the occasion to buy gold jewelry. Hence, the objective of our promotions for this festival is to upgrade the gold jewelry buyer to the diamond jewelry purchaser category. Navratri/Durgapuja is a period of heavy purchase for the outlets, specifically in the east.

 

“Strategically we focus our advertising and promos to this specific region at this particular period of the year. Often, we run contests locally, partnering with radio channels of the east. The Dhanteras/Laxmipuja is a time when the Hindus in India, as a religious practice indulge into purchase of both gold and diamond jewelry. The objective during this period is to maximize the market share, since most brands as well as non-branded jewelers are all offering discounts. Valentine’s Day, over the years, has developed into a great occasion for gifting of jewelry and it is yielding into business results, especially in the metros and the mini-metros.”

 

The group’s various brands and companies work in a combination of advertising, promotional and BTL activities, some of which happen at a nationwide level and others that are specifically regional or only during a local festival to create excitement and brand engagement. (BTL, Below The Line, is an advertising technique that uses less conventional methods to promote products and services. These may include activities such as direct mail, public relations and sales promotions.)

 

The company is looking at promoting festivals like Jamai Shashthi and the Poila Baishakh in western Bengal, the Assamese New Year in Assam and Vishu in Tamil Nadu, which are all being done for the first time, but with the aim of building these occasions as important periods of sales over the next five years.

 

Says Shailesh Sangani of Gili, India’s pioneer brand, “We have instituted an annual practice of bringing out a Gili jewelry catalogue just prior to Diwali, which is distributed with The Times of India, the country’s most important English daily. We bring out about 2.5 million copies and find that this promotion has been working very well for us.”

 

Sangani notes that sales of Gili jewelry typically rise by about 150 percent during the Diwali festival season. “But now we see that the season continues even through Christmas and to Valentine's Day, which has become an important occasion for us.” For Kashi Jewelers of Kanpur, festival sales represent 20 to 30 percent of their total turnover. “Though wedding sales for us is by far the largest sales opportunity, we do about three times the daily average on an occasion like Akshaya Tritiya,” says Rajan Kapoor, chairman of Kashi. “And the September to February period represents 70 to 75 percent of all our sales.” Preparations begin in early September for special promotions within the showroom, and special gifts like washing machines are offered on sales worth certain amounts.

 

Nitin Bardia, Director of Anopchand Tilokchand Jewellers, feels that the most important festivals in the Chattisgarh region – where they are based – and for the rest of central India are Diwali and Guru Pushya Nakshatra (which occurs several times a year and is considered to be a favorable/auspicious constellar formation). By introducing festival jewelry ranges and offering lucky draw coupons ATJ has been able to enhance its sales three-fold to four-fold during these occasions, compared to the daily average.

 

P.C. Jewelers of Delhi has created a unique promotion for itself. Every year for eight days of Navratri, which precedes Dussehra, they run an in-house event with the registered name Shringhar (signifying the act of adorning oneself). So, if one day the theme is pearls, the entire showroom has pearl jewelry on display, or kundan gold jewelry; and different celebrities are invited to visit the showroom every day. But unlike many others there are no other material allurements offered. “We don’t offer discounts,” says Padamchand Garg, “as they degrade the whole effort. We emphasize our exclusive designs and get a very good response during this season.” For eight days, this showroom promotion is supported with newspaper adverts and they are rewarded with twice the number of sales they have on any normal day. Every year, the retailer also bestows the “Best Gold Lover Award” on a personality they feel has done much for gold jewelry, which remains its most popular item.

 

Interestingly, for Kolkata-based M.P. Jewelers the most important festival remains Dhanteras during Diwali, though Shibankur Roychoudhury admits that Akshaya Tritiya has also now become nationally significant. Coins, chains, pendant sets, bangles and ear rings (by and large non-wedding jewelry) in the range of Rs.15,000 to 25,000 ($360.84 to $601.40) are the most important items for M.P. Jewelers. The retailer’s sales for Akshaya Tritiya this year stood at Rs.11,053,000 ($265,890) compared to Rs.8,694,000 ($209,142) last year. For Dhanteras of 2006, the company realized sales of Rs.17,876,000 ($430,023) as compared to Rs.10,556,000 ($253,934) in 2005. This represents about a two-and-a-half fold increase over normal sales for the jeweler.

M.P. Jewelers also relies mainly on BTL activity like mailers, lucky draws and gifting schemes to encourage consumers to purchase during these periods.

 

Says Roychoudhury, “We are of the opinion that Dhanteras is a festival of the Aryans. While its equivalent Akshaya Tritiya, [is] a festival of Dravidians. While Dhanteras originated from northern parts of India and percolated down to east and south India, Akshaya Tritiya originating from south has not traveled effectively to east and north India. Only a coherent all-India marketing plan (supported by bodies like WGC, DTC, PGI and GJF) can provide better results.”

 

Suashish’s Ashish Goenka, commenting on the company’s brand Ishi’s says, “We believe that ‘Occasions should not be Occasional’ and create various new opportunities to gift diamond jewelry. Ishi’s therefore launches special collections for festivals like Mothers Day, Akshaya Tritiya, Raksha Bandhan and Christmas.”

 

Typically for Ishi’s, pendants and rings in lower price ranges of Rs.2,500 to Rs.10,000 ($60.14 to $240.56) do very well during festivals like Mother’s Day, Valentine's Day, and Raksha Bandhan. Whereas earrings and small neckpieces are best-sellers during festivals like Diwali, Durga Puja, Akshay Tritiya, with price points in the range of Rs.7,000 to Rs.25,000 ($168.40 to $601.40).

 

“During festival seasons,” says Goenka, “We create a buzz around these special collections through focused advertising and PR campaigns. Apart from this, Ishi’s regularly introduces “Gift with Purchase” schemes and special offers for its customers, to enhance the excitement and festive spirit.”

 

To add to the individual promotional effort, bodies like the WGC, Rio Tinto and DTC have taken up promotional and joint advertising campaigns in the past, focused around festivals.

 

Says Madhumita Dutta, head of marketing development for WGC, India, “We do a range of activities like press communications, television commercials, and even promos planted in popular soap operas. With partners we do newspaper ads. All this helps to reinforce the festivals and create the necessary buzz around them.”

Rio Tinto has for several years now carried out co-op advertising with its BEM clients around the smaller festivals like Raksha Bandhan and Karwa Chauth.

 

Festivals as Sales Drivers

With just two festivals accounting for roughly 18 percent of the annual gold sales of roughly 700 tons, and pushing up sales for individual jewelers anywhere from 150 to 400 percent, there is no doubt that they are important sales drivers for this country.

 

It is interesting that apart from traditional religious festivals, the concept in the minds of jewelers also includes occasions like Valentine’s Day and even Mother’s Day.

 

Last year, the Gems & Jewelry Trade Federation (GJF) a fairly young industry association, launched the Lucky Lakshmi festival, which ran from September to November. The idea was to create an all-India promotional platform in order to further drive festival season sales. Though this year the association has concentrated on consolidating itself and building up its organizational strength, there are plans to take the Lucky Lakshmi concept ahead in the near future.

 

However, success stories like Akshaya Tritiya have only just recently begun to unleash their full potential. As it is, the total Indian jewelry market, estimated at Rs. 650 billion ($15.6 billion), is slated to grow strongly. The trade feels that if more concerted attempts are made on nationwide basis – and some even speak of Dubai-type shopping festivals to lend added vigor to the market during high sales times – the jewelry industry could raise the bar even further.