Consumers Wanting to Upgrade to Platinum: Vaishali Banerjee

Ms. Vaishali Banerjee, Manager, Platinum Guild (India) in an exclusive chat with G2J speaks about various issues of the super metal.Q: What is the consumption, demand and growth rate of platinum in India?
A: Today platinum is fast becoming the metal of choice for the consumer who wants the very best. Platinum was launched in India in 2000 but two years ago is when it started picking up pace significantly as there was a very aggressive marketing programme launched in 2009, which has continued into this year.
Vaishali BanerjeeThe growth percentage for platinum jewellery has been much higher than last year. Key retailers have also had their marketing programmes for platinum this last season. The response has been very positive with all the markets and retailers reporting strong growth across different product categories in platinum. Many of them have reported platinum jewellery sales doubled since last year.
Today’s woman seeks exclusivity in jewellery. Her quest for that unique piece of jewellery that symbolizes her inner aspirations or reflects her style is by no means casual. She now has an additional choice of precious metal – a metal which is naturally white, pure (platinum jewellery is 95% pure – in fact the purest of precious metals available to the consumer in gem set jewellery); rare (30 times more rare than gold) and eternal (it can withstand wear and tear and is timeless). Therefore, if a consumer wants variety and true value, the choice naturally veers towards platinum. Additionally, the base of consumers is expanding with the increase in the economic growth. This has consequently impacted the platinum jewellery industry positively. The growth has been +50.
Newer markets have seen 100% growth while existing markets – 40 to 60% in consumer off-take. Platinum Day of Love campaign has been quite successful in developing the engagement and wedding ring market for platinum across markets in India. At an overall level, in 2009 there was 100% growth, 2010 witnessed 80% and 2011 around 70% with the market stabilizing.
Q: Is it true that platinum jewellery is struggling to make an impact in India? Is this because of the strong cultural association with gold and platinum’s resemblance to silver?
A: The platinum price has been steadily growing over the years, but it is less volatile than gold as it is a rare metal being 30 times rarer than gold. Platinum generally costs approx. 1.5 to 2 times the price of gold at metal price. Currently with gold prices surging the difference in the rate per gram is not that much and hence many are opting for platinum jewellery. The reducing price difference between the 2 metals has resulted in consumers wanting to upgrade to platinum. This is especially the case for their diamond or gem set jewellery. People are also now looking at plain platinum jewellery in chains, bands and bracelets, etc. The price difference has helped consumers to own a piece of platinum jewellery in their basket. In fact jewellery consumers are now more attracted towards platinum with its premium over gold narrowing due to the relentless price increase. This shows in the overall increase in platinum sales at the retail level and is also evident through the increase in the number of retailers across the country. Many remote jewellers have shown interest to expand their business in platinum jewellery as well. So the availability will be more wide spread across India soon.
Platinum is not here to displace gold or other metals in the market as the world over platinum jewellery and other precious jewellery co-exist. Besides platinum is an extremely rare metal and therefore it will never be able to be on par with gold. Found in very few places around the world, platinum is 30 times rarer than gold due to which it can never displace gold or other precious metals. Besides platinum mined itself is not that much as it’s a very precious and rare metal and therefore is considered premium and an excellent store of value. India’s consumption of gold is higher than the annual metal production for platinum.
Like all metals it is traded in the metal exchange and that determines the metal price. Over the years the price of the metal has shown appreciation. Most retailers offer a buy-back on platinum jewellery much the same way like other precious jewellery. The policies are dependent on the retailer.
The Indian woman loves jewellery. The urban woman today is more educated and aware of current trends. Jewellery is an important component of her attire. She wants to be distinctive and remembered for her style. She seeks options in jewellery metals and designs. Willing to try out newer looks and experiment with designs, she wants exclusivity in her jewellery. Today, there exist more options in jewellery and she is looking at choices. Platinum jewellery is one such desirable choice to her when she is looking for the very best.
Platinum provides an opportunity to offer something new to existing customers and helps bring in new customers who are keen to buy platinum jewellery. While retailers continue to sell platinum jewellery to their existing customers, a large part of the business comes from new customers. We have engaged jewellers who are far better placed to know the customers choice in platinum. We get a lot of input from retailers to develop new designs for specialised customers. There has been a momentum in the market for platinum.
We have also recently launched our season’s collection2011-12 that encompasses designs that reflect the latest international trends adapted to suit the Indian market with understated, fine jewellery with clean cut lines. It is a contemporary expression of a traditional motif. The collection has been crafted using two design inspirations, “Less is more” and “Abstract nature”. The concepts capture the true innate qualities and highlight the natural lustre of the metal; simplistic designs, which signify understated elegance, modern value and sophistication.
Q: Is Platinum Guild International developing new markets? Or is the focus to strengthen platinum’s position in established markets?
A: We are extremely positive about the potential that India presents for platinum in the jewellery industry. Customers find platinum jewellery as an excellent ‘store of value’. It has tremendous heritage value and the metal has appreciated with time. A few of the jewellery trends that emerge are:

  • Being 30 times rarer than gold, platinum is ideal for the contemporary woman who is looking for exclusive everyday-wear jewellery. One can easily wear platinum designs with both western and Indian outfits
  • Wedding trousseau and jewellery occupy centre stage. It is only obvious that the bride, groom and their families want to put their best foot forward. The options available are many, but the fresh new entrant is the rare metal – platinum
  • Platinum, one of the most enduring precious metals can perfectly commemorate love. Since time immemorial, this naturally white precious metal with its moonlike luminescence has symbolized eternity. So when couples declare their deep undying love for one another there is no other better way to express it than with Platinum Love Bands
  • Found in very few places around the world, platinum is 30 times more rare than gold. Platinum jewellery is exclusive, a statement of individuality, and desired by those in the know, making it the perfect metal for gifting purposes. It makes birthdays, anniversaries and even promotions an occasion to remember, forever
  • Through the ages, the most discerning of men have preferred platinum when it came to their jewellery. The look of platinum and its weight appeals to men as it is understated, yet sophisticated and elegant. The heft and weight of the metal can make for a substantive piece of jewellery without signs of being ostentatious. Young men prefer platinum chains, bracelets, cuff links and wedding bands
Q: What is your view on the outlook for platinum supplies? Do you think production problems in South Africa will continue for years to come?
A: Production issues are being addressed but there continue to be cost, labour and other factors that have made it difficult for the producers to achieve their targeted output in recent years and will remain challenges going forward.
The platinum price is set externally and all the factors that influence the market can make a significant difference as we have seen with the very large fluctuations in 2008. As a result it is hard to forecast what will happen as it will depend on both industrial and jewellery off-take and the levels of production.
The surplus output forecast affected the price of platinum, but this move helped narrow the premium over gold and led to more demand for the metal from aspirational jewellery consumers. This has increased the overall sales, evident through the increase in the number of retailers across the country.
Retailers have lowered prices and seen a positive response; manufacturers report higher orders and are restocking their showrooms given the lower prices. Too early to judge the full effect of the lower prices on any delayed purchases.

Interview by Suresh Chotai