It's that time of the year when gold retailers in the UAE roll out attractive offers and enjoy brisk business. With the Indian festival of lights - Diwali - just a few days away, Gold Souq, the main hub of yellow metal trade in the region, is witnessing intense competition among retailers.
Diwali special offers and promotions range from free gold coins, cash back vouchers, advance booking and hedging; selling ornaments without the making charges, zero deduction buy-back schemes and even mega prices of a kilogram gold bars.
Diwali is an occasion for the Indian community to buy and gift gold. And the high price of the metal does not deter people from the Subcontinent in indulging themselves. The can be seen literally scrambling for gold coins, gold bars and gold jewellery.
Wholesale dealers who used to supply ornaments to these retailers are also entering the fray by opening their own branded retail chains. Thus increasing the already vibrant competitonin the retail sector. Says Ramesh B Vora, Director, Bafleh Jewellery, a company that has been engaged in wholesale business for more than two decades: “We have been in the wholesale gold jewellery business for several years and we know the market very well. We are establishing a chain of retail outlets now in the UAE, and the first one is opened in Gold Souq. For the next five days, we will be selling gold jewellery without making charges. We have enough stock of gold coins and bars for the Diwali season.”
The wholesale jewellery dealer who supplies ornaments to the leading retailers in the UAE and foreign countries will expand its retail network to Abu Dhabi and Dubai, with plans for such outlets in other GCC countries as well. “Even though the price of gold has been skyrocketing, Gold Souq has seen no decline in business. All the 160 shops in Gold Souq are doing good business and Diwali is a special occasion for gold retailers. There are no shops available here and the rent level of key money rates have not changed,” said Chirag R Vora, Director, Bafleh Jewellery. "we are setting up new retail outlets in Abu Dhabi and Dubai. Earlier there used to be 10 shop openings in one month, but now a days, one new shop may be opened in 10 months. However, some of the closed retailer shops have reopened. We have wholesale customers from the UAE and various countries including the USA, Europe and Africa. Now we know the valuation of the retail market. Despite high gold prices, the demand has not decreased because investors have earned minimum 25 per cent return from gold,” he said and added "we are not competing with our retail customers".
BRR Jewllery, another wholesale dealer, has recently opened its own retail outlets in the Gold Souq. “The gold price came down to $1650 per ounce last week. The high price is not the issue, customers will buy if the prices are stable. There is huge physical demand for gold in India for Diwali and the situation in the European and American market favours gold investment,” added Ramesh.
“Not a single shop is vacant in the Gold Souq now and the key money rate or rent level have not declined. Even in the case of diamond, prices have doubled in the last one year,” added Chirag.
The focus is on 22 carat, catering to the Indian community, but there is also considerable business for 18k, 20k and 21k gold jewellery.
Damas Jewellery is offering 3 kilograms of gold as bumber prize for this Diwali. Damas has introduced several new designs for the festive season and each week it is offering one kilogram of gold as a bumber prize. Customers who purchase jewellery worth Dh1,000 will get a chance to win 1 kilogram of gold and three winners will get one kilogram of gold each.
It is also offering free gold coins to customers who purchase diamond or pearl ornaments worth Dh500 or those who purchase gold ornaments worth Dh3,000. Customers who buy gold worth Dh5,000 will get one gold coin and gold plated photo frame and if the purchase is for Dh10,000, they get two gold coins and a gold-plated photo frame.
Malabar Gold, Joy Alukkas and Sky Jewellery also have Diwali promotions – zero discount scheme whereby the jeweller will buy back ornaments sold through its outlets at the same price, free gold coins for customers who buy jewellery worth Dh5,000 and above.
Sky Jewellery is offering 40 grams free gold, if customers purchase diamond ornaments worth Dh25,000.