Millennials in the world’s second-largest gold market aren’t buying it the way their parents did.

A demographic shift sweeping urban India is beginning to show on purchase patterns in a country that buys 663 tonnes—second only to China’s 700-750 tonnes—of the yellow metal annually, a January report by the World Gold Council (WGC) noted. India has one of the highest populations of youngsters in the world, reflecting a change in its demographics.

Spoilt for choice and with evolving tastes, the younger Indians don’t think like their parents do about gold. “The younger generation of urban shoppers are tempted by other products. As a result, gold is competing with designer and luxury fashion (designer clothes, handbags and shoes, silk sarees), and the ubiquitous smartphone when it comes to high-ticket purchases,” the WGC report says.

Old to young

Indian households splurge on gold, both as an adornment and an investment. It is an important part of traditions and inseparable from weddings, religious ceremonies, and other rites of passage.

In fact, weddings alone account for 40% of all gold sales, followed by the harvest season and festivals. Gold buying typically peaks in the months of April-June and September-January. Besides, occasions such as Dhanteras and Akshay Tritiya, too, are marked by the purchase of high-value items, including the precious metal.

However, the popularity and relevance of such traditional events are falling among the urban young.

“People are giving less importance to cultural events like this (Akshay Tritiya)…Second, younger women looking at adornment and, therefore, jewellery (and) accessories at lower price points also seems to be picking up,” S Subramaniam, Titan’s chief financial officer, said in June 2016. Titan is one of India’s largest organised retailers of gold jewellery, which it sells under the Tanishq brand.

Retailers are, thus, adapting.

Over the last few years, big players such as Titan and Malabar Gold have launched sub-brands such as Mia and Starlet, respectively, targeting young women. These products are typically light-weight and more stylish. New marketing and advertising strategies are also being deployed. Last year, for instance, Tanishq launched a marketing campaign for its collection, Niloufer, featuring a female entrepreneur.

Also, a new category of players, online retailers, such as Bluestone and Melora, are opening up the market for younger and more experimental shoppers. Most of these retailers target women aged between 25 and 35. Meanwhile, traditional retailers, too, are venturing online. In May 2016, for instance, Titan announced the acquisition of a majority stake in CaratLane, an online jewellery retailer.

This shift in consumer preferences comes at a time when India’s jewellery market is grappling with falling demand that hit a seven-year low in 2016. While consumers held back due to higher prices, other policy hurdles, such as the requirement to present one’s PAN card for purchases valued above Rs2,00,000, hit retailers. The government’s move to ban high-value currency notes late last year further dented sales.

The risk from the demographic shift is also keeping retailers alert, WCG added. However, despite the evolving preferences, demand is expected to remain strong in the long term as “gold ownership continues to be deeply entrenched in Indian customs and traditions,” according to the WCG report.

After all, with some 500 million Indians under the age of 25, there are plenty of weddings to look forward to.