Digital gold gains currency
Millions of Indians continued the age-old tradition of buying gold during Diwali this year with a new-age twist.
Consumers took to the relatively new digital gold category to avoid trips to crowded markets during the pandemic; that they could buy without a minimum purchase restriction added to the attractiveness of digital gold as the price of the precious metal hovered near a record high.
Digital payment firms such as Paytm and PhonePe, which sold digital gold, reported strong demand emerging from smaller towns and cities this year, in addition to metros. The companies saw digital gold sales rise substantially over Dhanteras and Diwali last year.
Flipkart-owned PhonePe, for instance, reported an over sixfold jump in the volume of digital gold sold on its platform in the month leading to Diwali from a year ago.
Rival Paytm said sales volume jumped 86% during the week of Diwali celebrations from a year earlier.
For PhonePe, 60% of gold customers came from smaller towns and cities during the Dussehra to Diwali festive period. Paytm said it saw customers from small towns, including Deoghar, Moradabad and Jabalpur, buying digital gold. Axis Bank-owned Freecharge said nearly 80% of digital gold buyers on its platform were from non-metros.
“We have witnessed the highest sales on Akshaya Tritya and Diwali. While metros saw record-high sales, smaller cities participated in buying digital gold,” said Varun Sridhar, chief executive of Paytm Money, the wealth management arm of One97 Communications Ltd, the parent of Paytm.
Paytm also claimed to have seen a 90% jump in first-time gold buyers this year. Still, digital gold continues to be merely 1.4% of the overall gold market in India, according to multiple payment executives.