India's Golden Habits

Who buys all this gold? How do they buy it?

Previously we saw that South India led in terms of overall gold buying. With about 40% share, South leads by a huge margin, followed by the West with about 25%.?

Did you know that weddings make up the biggest chunk with south India contributing to over 300 grams of gold for each wedding? (upper middle class estimate). Also, from a form perspective, Bangles and Chains each take up about 30-40% of the total share together contributing to the majority of gold sales in India.?

Also very interesting, the market is extremely fragmented- with only 7% marketshare held by National chains and only 23% by organized regional players. Rest 70% is held by independent and smaller retailers?

Every year, after a short lull during monsoon, gold sales in the country pick up again with festivals. It is Onam that kick-starts this string of festivals across India.

Is there a correlation between income levels and gold purchases??

What about the second question—who buys all this gold? Well, the rather obvious answer is it’s the rich. The population is divided into 12 fractiles depending on their consumption. Fractile 12 is the top 5% in terms of consumption, fractile 11 the next 5%, fractile 10 the next 10%, fractile 9 the next lower 10% and so on, with fractile 1 being the lowest 5%. In other words, the fractile classes used are the percentile classes 0-5%, 5-10%, 10-20%, 20-30%, 30-40%, ..., 70-80%, 80-90%, 90-95%, and 95-100%. These fractiles are taken separately for rural and urban India.

As the chart shows, the richest 5% in rural India spend 6.2 times more on gold ornaments than the next 5%. In urban India, this multiple is 3.9 times. Sure, even the poor buy some gold jewellery. But note how much more the top 5% spend on gold ornaments compared to the middle percentiles. Clearly, the people who will benefit the most from a low goods and services tax (GST) rate on gold will be the rich.

It is very interesting to highlight that rural India is the largest consumer of gold jewellery occupying 55-58 per cent of the market share, and the middle class is the primary gold consumer in India. This is because of the sheer population volume as well as the fact that Gold serves as a primary asset class to these segments as well!

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]