Affluent urban dwellers in fast growing India and China are buying more gold jewellery, an international gold executive said on Tuesday. "Both countries are on the same page... both are labelled as growth regions (for gold)," said Albert L.H. Cheng, Managing Director - Far East, of the World Gold Council, speaking on the sidelines of the London Bullion Market Association conference.
Cheng said the Asian neighbours, each with a population of over a billion, are seeing a shift in buying behaviour and tougher competition from lifestyle goods.
"In both countries consumers are seeking a shopping environment... more and more jewellery shops are moving into malls," Cheng, who has worked in Asian gold markets for 22 years, told Reuters. Cheng said both markets were liberalising, but imports and exports were still controlled by the government and the local currencies were not fully convertible.
"This is the one last piece (of regulation) that needs to go," Cheng said referring to the curbs in gold trade in both countries. India, the world's largest gold consumer, sees demand ranging between 700-800 tonnes, while China, usually the number three consumer behind the United States, has a lower gold demand at 260 tonnes.
Cheng said that Chinese manufacturers were consolidating, though in India the market still remained highly fragmented. He said about seven large Chinese producers manufactured almost 70 percent of their gold jewellery in Shenzhen. "In India I see the emergence of Tata and Reliance, but I don't see consolidation happening very fast."
Cheng was referring to Tata group's jewellery business Tanishq and Reliance Industries' new jewellery venture that aims to open 300 outlets in three years. World Gold Council data show there are more than 300,000 jewellers in India, most of them family-run and scattered across the vast country.
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