Hallmarking of gold to be mandatory from next year
The narrow alleys of the Gold Souk in Deira and open markets of Meena Bazaar in Bur Dubai are bustling with deals and promotions on jewellery in the run up to Diwali.
Fierce customer protection, abundance of choice in designs, and wide price range have elevated Dubai as the jewellery destination of the world
Volatility in the price of gold has not deterred buyers from spending this year. Both residents and tourists continue to flock the narrow alleys of the Gold Souk in Deira and open markets of Meena Bazaar in Bur Dubai in large numbers to get the best deal for their money.
According to Tawhid Abdullah, Chairman, Dubai Gold and Jewellery Group, the year has so far been a good one. "Gold prices at the beginning of the year were a little on the higher side. Certain carats like 22k went up for which the first quarter was very good but the third quarter was a little bit less. However, the demand for 18k and 21k was good for all the three quarters. Also, the diamond business was reasonably good."
People are continuing to buy gold regardless of the fluctuation in prices. Abdullah highlights that confidence and optimism in the market is more compared to two or three years ago. People have continued to buy gold as savings, a fashion statement, or for weddings or special occasions. Today small jewellery is driving demand; these are perfect fashionable pieces and is also suited for gifting.
Abdullah adds, "Gold jewellers are preparing for special promotions for Diwali and everybody is getting ready for a big season. People from the subcontinent continue to be the biggest buyers of gold in the UAE. The Chinese have been big buyers this year; also Asians who live in America and Europe. Tourists form a big chunk of the market while Arabs are big buyers of 21k gold."
Abdullah says, "Gold trade is more demanding along with customers who want the very best deals. Business is promising. However, marketing efforts can be strengthened by retailers offering a variety of quality jewellery and provide good after-sales services."
Uniform price display initiative
Today, the consumer is so well protected that when you enter a store, almost everywhere in Dubai, you can demand to see a signboard with the price.
Abdullah says, "Some stores who don't display it are not serious. In fact consumers should demand to see it. This is a tool to protect consumers." Dubai is the only city in the world, notes Abdullah, which has an organised sector for jewellery. Thanks to this, it is easy to communicate, exchange opinions and tackle issues.
"We are also lucky that all government departments support the industry because they know that at the end of the day worldwide standards are adhered to in the country. Dubai is known for its affordable prices, along with the best quality and innovation. The aim is to continue this in the coming years," he adds.
City of Gold
Dubai didn't become the 'City of Gold' all of a sudden, clarifies Abdullah. "It has been built over the years. We maintained the quality, look, after-sales service and price."
He pointed out that today there is a revival in the younger generation's interest for gold. They finding something that they want to wear. Dubai is very up to date when it comes to lifestyle.
"We were successful because we eliminated unfair competition. In certain parts of the world they compete not on quality but on price. Here we don't have a price war. Secondly, we are bringing to the consumers the best quality and after-sales service. The competition here acts as an incentive to perform better," adds Abdullah.
As the capital of the jewellery industry, the government issued the law of hallmarking gold last year, informs Abdullah. The law will be implemented early next year. There will now be an extra tag and this is going to be mandatory on every piece of jewellery. This tag will contain the carat, the weight of gold, and details on any precious stones and all this information should reflect on the invoice. Abdullah highlights that this has been done for consumer protection. If they have a complaint later, they can refer to the tag and invoice. "This way we have fulfilled consumer protection," he added.
According to Abdullah, the future is not going to be easy but more challenging. More promotions, professional training along with consolidation, local production, and international presence will strengthen Dubai's role as a re-export market. The sector has to adjust to the upcoming VAT too.
"The aim of the Dubai Gold and Jewellery Group is to have a presence in all segments of the industry such as manufacturing, wholesalers, retailers, exporters and diamond jewellers, and assist them in promoting this sector in Dubai," he concludes.
According to Chandu Siroya, Vice-Chairman of the Gold and Jewellery Group, the 18k gold jewellery market is doing very well. The price has been coming down and people have started spending more. "For Diwali, a number of stores are carrying out a wide variety of promotions. These are good because they attract more buyers during the season due to the price advantage," he says.
Furthermore, the cut-throat competition further acts as a great way for consumers to get a good deal, according to Siroya. He added that if the gold prices remain at current levels there will be steady movement in the market. "Dubai boasts of the best jewellery designs from all around the world. Plus we have retained the tag of the 'City of Gold' and are well on the way to become the jewellery destination of the world," he added.