Surveying the market

Yesterday was a fun day. It was almost the last but one day before the Shraadh concludes and I was out with another female friend to check out what other jewellers in the market had to offer. I don't know how ethical it is to snoop into other stores and see what is doing rounds in the market but then its an age old trade practice..something I personally find a little hard to break. We will dwell into the ethical part later, first let me share the good, the bad and the ugly I found.

So lets start of with the good part first :) Of the three stores we visited (I will omit the names) one of them was THE jewellery store of Delhi, the other one was quite a popular choice with the people of our locality and the third one was one of the stores whose ad I had heard so many times in the radio that I HAD to visit it.

Our first stop was the store which has been making a mark in the Pitampura area for the last few years. And I found good reasons for it. They had great sales girls: the warm, smiling kinds who would make your shopping experience a complete bliss, the kinds who would dig out 100's of boxes to find out just the right piece for you. I was truly impressed. In addition there designing was the best amongst the ones we have seen so far, in physical stores or online. They had an extensive range of jewellery catering to the needs of both- the masses and the classes. And the best part was that all of it could actually fit into your budget (btw, ours was 2-2.5 lac for a diamond set). Over the odd half hour that we spent there we forgot that we were undercover and were so fascinated by the jewellery that we had half a mind to buy it!

The only thing that stopped us were the prices. And that is kind of the bad part of the store. I personally found that there was a lot of disparity in the prices, so much that it looked ridiculous. And heres how: so, we had zeroed down on a diamond set which was estimated around 5 lac by the sales girl but when one of the owner was asked to give his best price he brought it down to a little over 3 lac. Now, a 40% discount on the mark up price was really new to me and set me thinking. I don't know about others but with me if someone offers a discount more than 10% it always sets me thinking...and I end up feeling that there is more I should have bargained for! But then there are quite a few that I know of, who feel that an out of the blue big discount is a deal to steal!

Now the ugly part of it: I know this goes around a lot in our fraternity but I feel there really is a need to educate your customers more than mislead them. So when we spoke to the owners about the return policy they had a simple one on cash refund or exchange: 90% of the diamond's cost + gold's current rate - labor charges. When prodded on why not give the diamond's current value too, the reply was that diamond is not a commodity and no one returns the appreciation in prices of diamond. I would beg to differ here because I know of at least one store that does this (and no it is not us), though I am not 100% sure, so once I have verified my facts on it I would put it down here. I guess the gist of the return policy boils down to: Diamond is not an investment. It looses 10% of its value the moment you step out of the store. Unfortunately thats the policy every one follows, including us. And thats something we should talk about more on in our later topics.

I would cover up my experience in the other two stores in the later posts, but I hope that this was an interesting read for all of you.

Btw, the Navratras are to begin tomorrow: So happy navratras, and happy shopping.

Navratra Festive Offer: 50% off making charges, 15% off diamonds.

Now being Internet savvy pays. Kathana Jewellers is offering a exclusive discount on our store wide jewellery collection for all the website/blog visitors only.

Internet is fast becoming a place to look for information in India. We know that with the increasing blog visitors. We believe it should be the place to hunt for deals too this festive season. After all who doesn't want to know a place to find the best prices on jewellery. That is why we are offering it exclusively to our site visitors.

Another not to be missed reason. Gold prices may have bounced back to the Rs. 13,000 levels. Leaving your mouths gaping wide open( and ours too). So we are trying to turn them into smiles.

About the Festival: Kathana Jewellers is celebrating the Navratras with a bang. We are offering 50% discount on making charges for entire gold and diamond jewellery. Additionally a 15% off on diamonds too. Our entire collection for the upcoming wedding season is now available. We have new designs in Mangal Sutras, Filigree work Bangles from Calcutta, light necklaces, pendants, tanmaniyas, italian chains and indian handmade chains. The exclusive internet offer is valid from Sept 16 to Oct 10, 2008. To avail the offer just mention that you saw our the discount offer on our blog, at the time of payment.

Gold prices firm up, Is it speculation or US financial markets?

This just in. Its almost 10:30 pm on Wednesday night. And it pulled me out of my bed. Gold prices have shot up to cross Rs.12,500 at MCX(the commodity trading exchange). What looks like the first thing that comes close to explaining this is the melting US financial markets. The LEHMAN brothers and Merrill lynch being the leaders of the pack. On closer look one sees this as a belated effect. Isnt the Lehman story 24 hrs old? So why did this knee jerk reaction take so long? Could it be finally that the speculators have grouped together and taken the gold markets on a ride.

This is a slow period for the commercial markets especially in India with sales picking up during the festive season beginning with the navratras. Navratras start from Oct 1. So a lot of jewellers were planning to ramp up stock for the festive season now. And looks like the speculators have had eyed this opportunity. This can make the festive/marriage season bitter not just for shoppers but jewellers too.

Gold prices have been firming up over the last week( you can look at the last weeks prices in the right column under the heading Today's Gold prices), which confirmed a see-saw pattern in gold prices. But this is a roller coaster, what can I say, Buckle Up!

Funny thing life is: I cannot help but contrast my mood between the last post and this one. Read it for yourself and compare.

Gold prices may fall further by Rs.600

More good news for consumers and jewellers alike. Gold is slated to fall by another Rs. 600 in the coming week. It will hover around Rs.11,000 for 24K gold. This fall has been a resultant of strengthening dollar and falling crude.

We know from first hand experience that when the gold prices recently fell. Their was a huge shortage of raw metal and gold fetched a premium over the prevailing prices. With India's festive season of Diwali ahead gold demand is slated to rise. This would again push the prices up. So this looks like a momentary dip. It would be prudent not to wait for gold prices to fall beyond this level.

Branded jewellery: Is it a good investment?

The Traditional Equation:

You know the moment you drive out a brand new car from a showroom its value depreciates massively. You are prepared for this. And there is nothing you can do about it. Until and unless its a limited edition production. Same goes for anything like furniture, electronics, clothes ....whatever. These things are created in assemblies and as long as there is demand, it can be met. On the other hand expenses in gold and land/property is considered an investment which appreciates due to lopsided demand supply equation. You can only produce so much gold which is economically viable and land cannot be produced (unless you are dutch).

Enter branded jewellery:

India is seeing branded jewellery in droves. Adora, asmi, nakshatra, ddamas, gili, orra, ishi's, kiah, nirvana, sangini and sia are some to name. Perhaps one for every letter in the english alphabet. The launch of these brands are the result of 2 key insights. One, a lot of expendable income available to the young adults. Second, the globalizing tastes of the Indian middle class. Branded jewellery turned the traditional jewellery market upside down with their star studded marketing campaigns. They woo the younger generation with star power to make a point. Their designs in gold and diamond jewellery start at couple of thousand rupees.

Is it an investment?

The value of your investment is the money it will fetch in the market when you go selling it. Branded jewellery gets that wrong in 2 ways. Most of the branded jewellery available at store-in-store or even exclusive showrooms have a very clear cut return policy. A consumer loses anywhere from 15-30% of the value, depending on whether you have exchanged or wanted your money back. Much more then the making charges of such an ornament. This makes branded jewellery an accessory rather than a store-house of value. In other words : It epitomizes the culture of use and throw which is slowly seeping into the indian mindset. Secondly the appraised value depends on the price you bought it at and not the day of selling it. So the benefit of any rise in gold eludes the consumer. A fact not liked by many investors in gold. These reasons combined explains why branded jewellery hasn't made inroads into the mind of the older generation of consumers( quite likely the parents of this young generation).

India is the biggest market of gold and diamond jewellery and Indians consider every bit of gold an investment. Branded jewellery in India has not been able to keep in tune with this investment philosophy. And any amount of star power cannot put that value in it. What is your take on branded jewellery? Leave comments below.