Dubai explores new ways of selling gold

2012-FEB-14

Gold merchants in Dubai are seeking new ways to offer their gold products to tourists and buyers from India. More and more gold kiosks are being opened which – in contrast to large showrooms – can satisfy many potential customers in a short period of time. Because it takes fewer employees to run such a kiosk, this distribution model also helps sellers to reduce their costs. The typical range of products contains gold ornaments, gold jewellery and gold coins – all of which are very popular among walk-in customers.

According to Ramesh Ramani, CEO of BRR Jewellery, it’s important for businesses such as his to cater to rising tourist demand. Those customers are mostly tourists from countries like India who hope to find hot deals in Dubai. Due to on-going high demand for the yellow metal, so-called Express Outlets are springing up like mushrooms. The much lower rents for the small kiosks are also playing a role and after receiving a licence they can be opened virtually anywhere making it easy for merchants to approach well-visited tourist centres. Another plus for the gold kiosks are the low personnel costs as it only takes two to three well educated employees to assure a smoothly operating business. The large showrooms on the other hand require a lot more personnel and the presentations of gold products take more time compared with gold kiosks. The large Indian jewellery firm Sky Jewelley recently opening its first gold kiosk in Dubai.

Dubai’s gold wholesale dealers are profiting from the high demand for precious metals in India and China. However the Indian government raised the fees on gold and silver imports into India in mid January. While the fees for importing Gold were raised by about 60%, the fees on silver were doubled. Many gold and silver merchants in India are being tempted to expand their businesses owing to the growth in Asian gold commerce. Dubai is at the centre stage of their interest as the Gulf state is developing into an important market for international gold trading.

Dubai’s merchants are increasingly confident that their precious metal sales will continue to increase over the course of the year. Last month the Dubai Shopping Festival attracted a large number of gold buyers from all over the world, with many tempted by the gold jewellery on offer.