Rutam Vora (Commodity Online)
AHMEDABAD: In what can be called as a smart business strategy in Gold retailing sector in India, the real rate per gram initiative has brought-in staggering response with jewellery buyers rushing to the counters on Akshaya Trithiya, the auspicious day of gold purchases, despite gold prices hovering at its historic peak levels.

According to industry estimates, gold consumers are overcharged by about 15% on their jewellery purchases on the name of making charges, wastage charges etc. A Bangalore-based noted integrated jewellery manufacturer and exporter, Rajesh Exports Ltd (BOM:531500) had introduced a transparent pricing mechanism of “Real rate per gram” initiative on the occasion of Akshaya Trithiya. The initiative entails gold jewelleries to be priced at the real selling rate of gold without additional charges like wastage, making charges, value addition charges etc.

Speaking to CommodityOnline, Rajesh Mehta, Chairman, Rajesh Exports Ltd said, “We saw huge buying from our showrooms after announcing this scheme. The crowd gathered at our retail outlet discounted hesitance in buying due to steep hike in gold prices in recent days. Looking at the massive rush, we had to call police for maintaining order at the stores.”

To date, the gold jewellery business in India has by and large been about un-kept promises, unsupported claims and unquestioned practices. Till recently, India-based Gold jewellery buyers had to compromise in purity, weight, and price of gold in the absence of a regulating authority / standards for best practices. Also, they end-up paying higher prices under the un-coined terms like wastage, making charges and value addition.

As per available estimates the total retail gold jewellery business in India is worth about Rs. 95,000 crores per annum. Considering on an average about 15% being over charged to the customers, the customers in India are overpaying about Rs. 14,250 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 Rs. 10,000 crores 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 Rs. 24,000 crores every year.

In a situation, when the gold retailers are struggling hard to grow amid strong presence of local jewelers, the latest marketing strategy by Rajesh Exports seems to have rejuvenated the organized retailers in India to undertake innovative ways for attracting customers even in the times of all odds.

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