Though they are not an informed crowd when it comes to variation in gold prices, the customers in Kochi city are ‘Impulsive’ buyers of the yellow metal. In the last three years, 70 per cent of consumers in Kochi prefer gold as a major investment option which is almost double the investor sentiment in New Delhi, the national capital.
These are the major findings in the latest research paper named ‘Gold and Consumer Behaviour - A Comparative Study of Cochin and Delhi by Centre for Public Policy Research (CPPR), a city-based research organisation. The study done by CPPR Research Associate Mary Honey O J concludes that gold customers in Kochi and Delhi are price insensitive in nature.
Setting the context, the study says, “Only three of its gold mines are working full-time (Hutti and Uti mines in Karnataka and the Hirabuddini mines in Jharkand) and producing about 0.5 per cent of the country’s annual gold consumption. India has to import gold to meet the stupendous gold demand.”
According to the report, in the last three years, 70 per cent of consumers in Kochi have opted for gold as their major investment option as against 9 per cent of consumers who chose real estate as their major investment option. The respondents were consumers from select gold jewellery outlets in Kochi and New Delhi.
“In New Delhi, 38 per cent of the respondents opted to invest in gold and 20 per cent opted for Public Provident Fund (PPF) in the last three years as their main investment options. The daily and weekly updation of gold price among consumers in Delhi comes to 78 per cent as compared to Kochi at 42 per cent. Nearly 37 per cent of consumers in Kochi update themselves on a monthly basis,” it said.
The study makes it clear that gold is price sensitive at low prices but it is insensitive to price increase, especially in Kerala.
In Delhi, 80 per cent of consumers go for a planned gold purchase where the planning period ranges from three to six months. However, in Kochi, only 65 per cent of the consumers plan their purchase in advance. For people of Kochi design is of least concern than price and quality, the study stated.
It is predicted by the World Gold Council (WGC) that the demand for gold in India in 2013 will be in the range of 865 tonnes to 965 tonnes.