Rajesh Exports Limited (REL) the world’s largest manufacturer and exporter of gold jewellery unveiled the Retail “Gold Revolution” here in Karnataka.
REL will launch the “Gold Revolution” across the country within the next twelve months. With this, REL heralds the dawn of a new era of transparency in gold purity, price and weight to bring in ultimate transparency in the gold jewellery trade. The Gold Revolution will be launched first in their prestigious “ Shubh Gold Mall” at MG Road (next to Cauvery Handicrafts) in Bangalore. The Gold Revolution will also be activated in their existing 6 “Shubh” outlets in Bangalore as well as one store in Udupi.
Redefining the Gold retail industry in India.
To date, the gold jewellery business in India has by and large been about unkept promises, unsupported claims and unquestioned practices. Till now, customers buying gold jewellery in India had to compromise in purity, weight, and price of gold in the absence of a regulating authority / standards for best practices. Since time immemorial, jewellers have coined terms like ‘ Making charges’, ‘Wastage’ ‘value addition’ etc., and charged extra while making customers believe that they are paying less.
The complicated terms of “wastage”, “Making Charges” and “Value Addition” were beyond the understanding of the customers. Customers did not have a choice as all jewellers were charging in the similar manner. The “rate per gram” was left meaningless and some times, the customers were charged 20 % to 40% more than the rate per gram quoted by the jeweller. The irony is, a trend as documented by BIS study, over 97% of the jewellery offered by jewellers fell short of their commitments in the areas of “Purity”, “Weight” and “Cost”.
Rajesh Exports Limited, with fully integrated systems in place is the lowest cost producer of jewellery in the world, has taken up the challenge of eradicating the malpractices prevailing in the jewellery trade. From 15th May Rajesh Exports will unveil the Revolutionary “Real Rate Per Gram”.
From 15th May onwards, a jewellery buyer will not be paying any wastage, making charges, value addition charges or any other hidden charges. He will only be paying at the selling rate of gold without going into the complicated explanations and calculations. The practices adopted by the jewellers currently can be better explained by an example,
Example : If a jeweller quotes the price of gold as Rs.1,600 per gram to a customer, and if the customer selects a jewellery weighing 20 grams, generally the calculation of the jeweller will be as follows,
Weight of the jewellery : 20.000 Gms
Wastage Charges : 4.200 Gms
___________
Total Weight : 24.200 Gms
Value of gold : 24.200 Gms x1600/gm = Rs. 38720
Making Charges = Rs. 800
Total Value = Rs. 39520
Logically since the rate quoted was Rs1600 per gram the customer should have got the jewellery at 20.00 gms x 1600/gm = Rs. 32000, but the customer will never get jewellery for Rs.32,000, but will invariably end up paying 15% - 25% extra due to various hidden charges. “The Gold Revolution with Real Rate Per Gram by REL through its retail arm “Shubh” will change all this. As a result any customers who buy gold jewellery at “Shubh” outlets will save 10% - 20% compared to the current practices adopted by “other jewellers”.
As per available estimates the total retail gold jewellery business in India is worth about Rs950bn per annum. Considering on an average about 15% being over charged to the customers, the customers in India are overpaying about Rs14,250 crores every year, this excess payment is apart from the lower purity of jewellery being sold by some of the jewellers in the guise of 22ct jewellery, the excess payment made by the customers due to lower purity would be about another Rs100bn per year. With the transparent pricing mechanism of the revolutionary “Real Rate Per Gram”, and the hall mark guaranteed purity the Indian jewellery customers are set to save up to Rs240bn every year.
The “Real Rate Per Gram” would ensure standardisation of the jewellery industry, which would ensure healthy growth and more employment opportunity to the artisans and other indirect employees of the industry. Not only the gold buying aspirants from India would stop buying from abroad, but there will be a reverse trend of people from other countries buying jewellery from India.
As industry leader, REL appeals to all jewellers to adopt the “Real Rate Per Gram”, instead of confusing the customers to ensure healthy growth of Gold jewellery industry. The industry endeavour should be to encourage the customer to invest more and more of his / her hard earned money into buying of gold. Interestingly, and sadly, India used to consume a whopping 950 tonnes of gold per annum, which has come down to 250-350 tonnes per year. The reduction is attributed to the increased awareness among the customers about the practices adopted in the jewellery industry, which has led to lack of faith in investing by the customer in gold jewellery. With the Gold Revolution of Real Rate Per Gram, REL is confident that the customer would be encouraged to invest more into Gold Jewellery, due to the transparency offered.
REL also appeals to the buyers to demand “Real Rate Per Gram” and the correct melting purity of 22cts from the jewellers and also test the jewellery at independent BIS hallmakring centres.
REL currently has 25 showrooms of “SHUBH” spread across the country, in the last two years REL has collected the basic data about retailing and is now set for an aggressive retail expansion, by unveiling the “Gold Revolution” in all the states of India. REL has finalised plans to set up 250 “SHUBH” stores across the country within the next 18 months. REL has targeted a market share of 35% from the total retail jewellery business of India, which is estimated at Rs950bn per annum, this would result in an additional retail revenue of about Rs330bn, with an additional net profitability of around Rs20bn per annum.
Speaking on the occasion, Mr. Rajesh Mehta, Chairman, REL said “ Today is a landmark day in the jewellery industry. The transparency in the jewellery industry which was not there for centuries, has been brought in today. I am very confident that the Gold Revolution with an offer of “Real Rate Per Gram” to the customer would ensure to multiply the confidence of the customer in a jeweller and would result in standardization of the industry. This move by REL would immensely benefit the jewellery industry by eradicating unscrupulous elements from the industry. The biggest beneficiary of this Revolution will be the Customer.”