Titan’s jewellery arm, anchored by its largest brand, reported a striking 41% jump in business — a gain largely attributed to higher average selling prices rather than a surge in new buyers. The result points to a shift in how customers are spending in the jewellery market: buying pricier pieces rather than simply more items.
Why average selling prices rose
Several factors helped push up the average selling price (ASP):
- Product mix and premiumisation: Customers appear to be choosing higher-value collections and premium designs, which naturally raises the ASP even when the number of buyers stays steady.
- Gold and input cost dynamics: Rising gold and component costs can translate into higher retail prices. Retailers often pass some of these increases to consumers, lifting ASP.
- Bigger-ticket purchases: Special occasions such as weddings, festivals, and gifting can skew sales toward more expensive items like heavier gold pieces or diamond-studded jewellery.
- Strategic assortment and marketing: Targeted launches, curated collections, and effective promotions can nudge buyers toward higher-margin SKUs.
Flattish buyer growth: what it indicates
While revenue expanded sharply, the number of buyers did not see a comparable rise. That “flattish” buyer growth suggests:
- Existing customers are upgrading their purchases rather than new customers entering the market.
- Retail footfall and customer acquisition may be stable, but average spend per customer has increased.
- Price sensitivity remains, limiting broad-based expansion in buyer numbers despite promotional efforts.
Implications for the company and the wider market
The mix-driven growth has a few clear implications:
- Revenue quality and margins: Higher ASP can improve top-line revenue without proportional increases in selling costs. If managed well, this can enhance margins.
- Brand positioning: A tilt toward premium products strengthens brand positioning among higher-income shoppers but may reduce appeal to more price-conscious segments.
- Inventory and working capital: A focus on high-value SKUs requires precise inventory management to avoid tying up capital in expensive stock.
- Competitive dynamics: Rivals may respond with their own premium offerings or targeted discounts to defend volume, keeping the market competitive.
Risks to watch
- Gold price volatility: Sharp swings in bullion prices can alter ASP and consumer sentiment abruptly.
- Demand elasticity: Continued reliance on price-driven revenue growth could backfire if consumers cut back during economic pressure.
- Customer acquisition challenges: With buyer growth flat, long-term expansion will depend on winning new customers or increasing purchase frequency among existing ones.
Outlook and strategy considerations
To sustain momentum, the company may need to balance premiumisation with broader accessibility. Practical moves include:
- Diversifying price points and designs to keep entry-level customers engaged.
- Enhancing digital and omnichannel experiences to attract younger buyers and increase convenience.
- Strengthening loyalty programs and after-sales services to drive repeat purchases.
- Managing assortment and working capital to keep inventory lean while offering desirable premium pieces.
In short, the 41% growth driven by higher ASP highlights a profitable short-term outcome and a strategic pivot toward premium products. The longer-term success will depend on converting stable buyer numbers into broader market reach while managing the risks that come with higher-ticket retailing.