India's Enduring Love Affair with Gold: Unpacking the Numbers

How do different Indians treat Gold?

Did you know an impressive fact that Indian housewives collectively hold a staggering 11% of the world's gold, surpassing the combined reserves of the US, IMF, Switzerland, and Germany?

Gold holds a special place in India's cultural and economic landscape, and the numbers speak volumes. In a data-driven exploration of India's deep relationship with the precious metal, we uncover astonishing statistics that illustrate the nation's remarkable affinity for gold.

An astonishing daily average of 2.3 tonnes of gold purchased – equivalent to the weight of a small elephant. With 20-25% of the world's annual gold output finding its way to India and 75% of the nation's gold demand taking the form of exquisite jewelry, it's clear that gold is more than just a metal; it's a part of India's identity.?

A striking revelation comes in the form of 50% of India's annual gold demand, amounting to approximately 15 million weddings a year. In this article, we delve into the data to unravel the complex web of India's relationship with gold, offering insights into its historical, cultural, and economic significance.

India is the second largest gold jewelry consumer in the world. In 2021, India bought 611 tonnes of gold jewelry, second only to China (673 tonnes), but comfortably ahead of all other gold-consuming markets, according to the ‘Jewellery Demand and Trade’ report released by the World Gold Council on January 19, 2023.

Sherlock AI dives into the details!

Sherlock AI has its case all setup. To understand the underlying frenzy behind the gold purchases, Sherlock AI plans to uncover trends on a state level first

First Sherlock AI sets out to understand the presence of ‘jewelry shops’ across different states adn correlate it with the population of the state to find the ‘per capita’ jewelry shop distribution, which is calculated as number of jewelry shops per 1 lakh population in the state.

Very interestingly, the number of shops is topped by Maharasthra, UP, West Bengal, AP + Telangana, Gujarat, Tamilnadu, Karnataka. Very interestingly all the five southern states feature in the top 10 list!?

Moreover, in terms of the per capita shops, Telangana tops with 21.2 shops for each 1 lakh population, followed by Maharashtra (14.6x), Gujarat (14.3x) and the southern gang- Karnataka (13.3x), Kerala (12.8x), Tamilnadu (11.3x). The eye opener here is that it’s not just Southern India which has an ache for the glittering metal, but Western India as well (mainly Maharashtra and Gujarat)

But is this sufficient to understand how much each state actually ‘buy’ gold? Absolutely not!

Sherlock AI now dives into the per capital expenditure on gold at a state level

Kerala: Go(l)d’s Own Country

Southern India dominates Indian gold jewelry consumption, accounting for 40 per cent of the country’s total demand. Gold accounted for 23 per cent of gem and jewellery exports in 2021.

The first thing that catches the eye in the chart is how different Kerala is from the rest of India in terms of spending on gold ornaments. For instance, not only does rural Kerala top the rankings for spending on gold ornaments, its per capita spending is six times higher than the state that ranks number 2—Goa. Indeed, rural Kerala’s per capita spending on gold ornaments is far ahead of the total per capita spending of all the other six top states by gold consumption shown in the chart.

Urban India, being richer, spends more on gold ornaments than rural areas. Nevertheless, here too urban Kerala ranks first by a mile among the states. To be sure, Kerala has relatively high per capita income, but it’s certainly not so different from other Indian states as the gold consumption data suggests. Cultural factors must be behind its status as an outlier. It is no wonder then that the Kerala chief minister wants a low goods and services tax (GST) for gold.

At the other extreme are the states with the lowest per capita expenditure on gold ornaments. As the chart shows, the north-eastern states figure prominently in this list—again the reason is likely to be cultural factors rather than poverty. It’s likely though that poverty is the factor behind states like Bihar and Jharkhand having low per capita gold consumption.

In this journey of discovery, Sherlock AI stands as a beacon of precision and insight. Not only does it help us decode the complex dynamics of gold consumption, but it also emerges as one of the leading precision targeting tools for customer acquisition. Imagine having the power to reach potential customers in Kerala who have visited a gold store twice in the last month. With Sherlock AI, we can craft targeted marketing campaigns that zero in on these individuals, providing businesses with a unique advantage in understanding and connecting with their audience.?

As we dive deeper into the intricate tapestry of India's gold obsession, we're reminded that in a data-driven world, Sherlock AI is the key to unlocking new horizons in customer engagement and acquisition. Reach out at [email protected]