Young Urbanites in India Shun Their Parents' Gold Standard

(By Sanjit Das -- Bloomberg News)

NEW DELHI -- For Mona Bhardwaj, 42, gold jewelry is more than mere adornment. It is a family heirloom, a prudent investment and an auspicious metal at religious rituals. It is also a bride's best friend. No wedding in India is complete without a bride decked in heavy gold jewelry.

But Bhardwaj's two daughters do not share her emotional relationship with the metal, despite the gold smiley pendants and dolphin-shaped earrings she flashes before them.

"My daughters keep saying, 'Nothing yellow, nothing yellow.' For them, gold is old," Bhardwaj said in her living room while sporting three gold rings, bangles, a chain and earrings. A painting of a 16th-century Mughal empress embellished with 24-karat gold decorated the wall.

Her 21-year-old daughter, Sonam Bhardwaj, has had it up to here with gold. "I think it is too gaudy and chunky," she said with a look of disgust. "Look at my mother."

In India, where an economic boom has taken hold and tastes are noticeably shifting, Sonam represents one of the newest consumers on the block -- a young urban woman who has distanced herself from India's deep-rooted gold tradition.

Today there are legions of young Indians whose eyes twinkle not at the sight of gold but at the sight of luxury goods. Sonam, for example, is hoping for a new Nokia Nseries phone next month for Diwali, the Hindu festival of lights. She already has a pair of Versace sunglasses and a Guess bag in her collection of fineries.

India is still the world's largest consumer of gold, but only 40 percent of the demand comes from urban areas. In cities such as New Delhi and Mumbai, surging incomes, changing lifestyles and the introduction of high-end goods have pushed gold downward on consumers' lists of must-haves.

"The shopping basket has become bigger across urban India. The disposable income that traditionally went exclusively to gold is now going to diamonds, overseas holidays, a fancy car, the new flat-screen plasma TV, the latest model of cellphone in the market," said Arvind Singhal, who heads Technopak, a consumer and retail consulting firm.

Aside from rising incomes, a Technopak report attributes the shift to Indians' increasing "exposure to international lifestyles and media" as well as easier credit. Sales of luxury homes, cars and expensive electronics, the report notes, have registered double-digit growth in recent years.

As for gold, it's a new day. Traditional gold-giving occasions, closely tied to Indian rituals and festivals, are now a brand battleground as companies compete to sell their products. The Finnish cellphone giant Nokia began promoting its wares as gifts during this year's brother-sister festival, called Raksha Bandhan. Meanwhile, popular TV shows such as "Cell Guru," "Gadget Guru" and "One Life to Love" introduce consumers to new upscale products.

"People are now changing their cellphones every six months to get the latest model. We call it the indulgence market," said D. Shivakumar, the Nokia chief in India. "And this market is as big as the desire and ego of the consumer."

The gold industry isn't about to surrender. Analysts note that as young urban Indians are turning away from gold, the rural market is opening up. Industry representatives say that sales are reaching new highs and that they're eager to try new appeals to urban working women.