India’s Gold Malls: A Glittering Retail Experience

A new breed of specialty jewelry malls are changing the way that jewelry is being sold in India. In a country that loves gold – India has an annual consumption of 700-800 tons – this concept is designed to give retailers better value for money, since specialty malls offer a higher conversion rate of browsers to buyers than generic malls.

Gold Souk was the first such mall to appear in the NCR region of India. The massive 180,000 sq ft mall is brimming with traditional jewelers, a designer’s gallery, and India’s largest brand store - Avenue Montaigne, which displays over 40 counters of watches and high end accessory brands. The mall offers both rental and ownership options with rentals ranging from Rs 150,000 to Rs 350,000 ($3,360 - $7,850) per month.

Weekday traffic is 800-1,000, rising to 2,000 at the weekends. With a conversation rate of over 60 percent, no wonder that during the last Diwali, a strong gifting occasion, souk sales were on average Rs 10 million ($224,210) a day.

Following the success of the Gold Souk, the developer Aerens, is planning to take this concept all over India, while Avenue Montaigne soon be launched abroad.

Fort Knox is set for a mid-April inauguration in Calcutta. Mall developers hope to attract tourists from Malaysia, Bangladesh, Hong Kong and Singapore as well as from neighboring towns and cities. In all, there is a potential market of more than 120 million people.

Rentals in this 80,000 sq ft mall, which will house jewelry stores and offices, start at Rs 90 per ($2) sq ft. There are expectations of a high conversion rate from the 400 to 500 people who are expected to visit the mall daily.

Down south, Prashanth Real Gold Tower will soon open in Chennai. The mall sprawls over 130,000 sq ft. As well as jewelry showrooms, the mall will have a business center, a gold bullion market, and a gem lab. 

Unlike the other malls, retailers only have a rental option, with a nine year lease, starting at Rs 100 ($2.25) per sq. ft. The mall is in a prime location on Usman Road, an up market jewelry bazaar with 200,000 daily visitors.

With state of the art security systems, which include CCTV, sensors, metal detectors and armed security personnel, as well as high marketing budgets to woo consumers, this new jewelry retail concept is doing well in India. Is this concept here to stay? Only time will tell.