Saturday, May 28, 2022

Gen-Z Investors Moving Towards Digital Gold

The share of new age investments like digital gold has gone up due to an increase in digitalization. Young investors have shown affinity towards digital gold as it is convenient and 100% safe.

Gen-Z Investors Moving Towards Digital Gold
Vikas Singh, MD & CEO, MMTC-PAMP

Investment in gold remains consistent irrespective of the price and uncertain times. However, the share of new age investments like digital gold is going up particularly in the portfolios of young millennials and Gen-Z investors, Vikas Singh, MD & CEO, MMTC-PAMP, tells Lola Nayar in an interview.  
What has been the investors' response to paper and digital gold given the government incentives to promote these investment modes?
Consumer preferences and buying behaviours have considerably changed owing to the pandemic. Consumers have continued to flock to safe and liquid investments like gold in these uncertain times, however, the share of new age investments like digital gold has gone up due to an increase in digitalization. Young investors have shown affinity towards digital gold as it is convenient and 100% safe. With MMTC-PAMP they invest only in 24K or 999.9 purest gold, as ours is a fully integrated eco system with zero outsourcing/dependency on external partners. Hence we are the safest and are the most preferred option for investors.
On the sectoral front, we appreciate the recent initiatives like Electronic Gold Receipt (EGR) that will create a national pricing structure for gold and pave the way for the operationalization of a gold exchange in India. 
How committed are investments in digital gold? Does global market volatility impact sentiments sufficient to influence investments/ withdrawals? 
 As with most financial investments, in gold too true value is realised over a medium to long term. The market volatility matters and definitely impacts the sentiments of the buyers as they use the data to align their portfolios. MMTC-PAMP’s rates are linked directly to international markets, hence we provide real time gold rate to our consumers to ensure trust and credibility. Consumers continue to prefer trusted brands in these uncertain times, and as India’s only refinery accredited by LBMA (London Bullion Marketing Association) for both gold and silver, MMTC-PAMP has been accepted by investors across the board. 
How do Indians, who are one of the largest buyers of physical gold, compare with global investments in digital gold? 
Gold in India has historically been more than an investment. It is a culturally significant metal which has found a place in Indian hearts and homes alike. We have witnessed consumers across age and genders, investing in gold for purposes like gifting, wedding, religious connotations, investments, etc. The investments or purchases in gold have continued to go up since the economy unlocked, given the strong affinity towards the metals across India. We saw a 50% jump in digital gold sales in the lead up to the festive window (Sept’21 – Oct’21) and a similar quantum of spike in the number of engaged users. In recent times, we have seen an increasing adoption trend towards digital gold, especially among young millennials and Gen-Z investors.
Given the sharp rise in gold price over the last decade, has there been any shift in investment pattern? 
Gold has been the preferred and traditional investment tool for centuries and the demand has always been higher than the supply. Irrespective of the price change, the investments into the yellow metal have remained consistent as it is the only proven hedge against inflation. As the most trusted name for pure gold products in India, MMTC-PAMP offers the opportunity of investing in 24K or 999.9 pure gold without being deterred by the high entry price.  Investors can start building their portfolio in bite-sized quantities; for example, they can start investing with anything from Rs 100 to Rs 1000 every week or fortnight, and let the power of compounding do the rest. Young investors are moving towards this option because of the flexibility, high liquidity and easy exit options the product offers. 
MMTC-PAMP has emerged over the years as a trusted name in quality gold products including bullion and minted coins. What has been the growth in demand for your products? 
 As India’s only LBMA accredited fabricator for both gold and silver offerings, and India’s leader in digital gold, we offer unmatched services and products to our customers. With the launch of our direct e-commerce website and increase in our distribution footprint, our reach has increased multi-fold across cities. It has given us the right nudge to cater to demands from newer audience segments in urban and semi-urban cities. Our minted portfolio grew by 80% year-on-year in the previous quarter, and the digital gold portfolio also came through strongly. The demand for the metal has been on a consistent rise and we are continuously working towards creating unique and exquisitely crafted products for Indian gold buyers.    
Given the demand for your brand products, what are your plans for expansion of outlets, and range of products, particularly within the country? 
 In October’21, we announced our strategic move to expand our footprint in key cities across Karnataka, Tamil Nadu, Telangana and Andhra Pradesh. We partnered with Anand Jewellers, the leading jeweller of Indore, to enter Madhya Pradesh. We have recently launched a store in Kolkata with a focus on silver coins engraved with  AshtaLakshmi. In terms of products, we have been at the forefront of bringing unmatched quality and craftsmanship to our consumers with region specific and cultural launches. We aim to reach out to around 1,000 local jewellers and retail outlets over the next three years.  On the digital gold front, we are not only expanding our distribution network but also investing in our own D2C platform which will allow investors to directly buy from MMTC-PAMP.
To ensure consumer satisfaction, MMTC-PAMP has been collaborating with major jewellers in the country to craft products that have helped to win and promote sales during festive seasons. Any plans to extend this partnership? 
 We already work with trusted names like Muthoot, Malabar Gold, Joyalukkas, and Senco. We have also released co-branded products with some like Jos Alukkas, AB Jewels and Kalamandir Jewellers in the market. India is the second largest market of gold and the sale is not limited to festive season; there is a consistent inflow of customers throughout the year.