Hallmarking jewellery NOT mandatory after all.

Admittedly I am late on this news piece but I am sure its still news to many. Turns out the Ministry of Consumer Affairs has relaxed its earlier dictum of Mandatory Hallmarking till further notice. I have covered this hallmarking issue in my earlier posts here and here. Earlier the ministry had announced Dec 2007 as the deadline for non-complying jewellers. Beyond this date it was expected the govt would bar jewellers from selling any gold ornament without the prescribed 5 signs of hallmarking.

After a short lived battle with the Gems and Jewellery Federation(GJF), the ministry has relented and pushed the matter further into the future. GJF, the trade body had raised the issue of its implementation. Notably, the absence of enough assay centres throughout the country to warrant such a directive. There are only about 125 centres whereas the need is greater than 3000. In such acute shortage its not possible for a jeweller to run with gold ornaments from one town to another to get it certified.

Another issue was the high license fee of Rs.25,000, 15,000 and 10,000 a year for jewellers in metros, district headquarters and elsewhere respectively. The GJF wanted the fees to be valid for a period of 3 years.

Alternately, the some voices have demanded to be done with License Raj and adopt a Thailand like model. In thailand a jeweller has the right to sell any caratage of jewellery provided they mention on it. The govt. can then do a random check and subject a maximum punishment of 3 years of jail and shutting the shop. The trade body was amenable to this idea being adopted for India and thus not having to worry about setting up assay centres throughout the country.

Understandably, this is a lot more contentious issue than looks on the surface. What could have been done was to do it in a phased manner starting with the metros as originally planned.

The Retail Jeweller (magazine) sums our feeling on this:

" In a sudden turn of events while we at RJ had just about concluded the vainness of the efforts made so far by the trade and GJF - the ministry of consumer affairs anounced the postponement of compulsory hallmarking till further notice. "

So even while the govt and the trade body slug it out. We advice you to continue looking for the blue triangle.

Related article: Hallmarking rule 'deferred'

Related Posts:
Mandatory Hallmark from Jan 2008: The Fallout
Hallmark Mandatory from Jan 2008...Really?
What is Hallmark Jewellery?

(This article has been made possible with inputs from The Retail Jeweller)

Kaliedoscope

Blue Ocean Opportunities in the Indian Jewellery Industry.

Blue Ocean Strategy : A book written by W. Chan Kim and Renee Mauborgne has had an indelible impression on me. This book has shown a new way to look at competition and is relevant to any industry across the world and across time.
An excerpt from the book sums up what this strategy is about(Taken from Hubspot):

"The only way to beat the competition is to stop trying to beat the competition. In red oceans, the industry boundaries are defined and accepted, and the competitive rules of the game are known. In blue oceans, competition is irrelevant because the rules of the game are waiting to be set. ...The companies caught in the red ocean followed a conventional approach, racing to beat the competition by building a defensible position within the existing industry order. The creators of blue oceans, surprisingly, didn't use the competition as their benchmark. ...Instead of focusing on beating the competition, they focus on making the competition irrelevant by creating a leap in value for buyers and your company, thereby opening up new and uncontested market space. …Value innovation is based on the view that market boundaries and industry structure are not 'given' and can be reconstructed by the actions and beliefs of industry players. …To fundamentally shift the strategy canvas of an industry, you must begin by reorienting your strategic focus from competitors to alternatives, and from customers to non-customers of an industry. As you shift your strategic focus from current competition to alternatives and non-consumers, you gain insight into how to redefine the problem the industry focuses on and thereby reconstruct buyer value elements that reside across industry boundaries"

Similarly, Indian Jewellery industry is huge and the competition is fierce. There are over 300,000 retail jewellers in India. In Pitampura, New Delhi alone, there are more than 60 Jewellers. Step into one and you would find hardly any differentiation on product, policies and after sales support. And thus goes the story in almost all kinds of trading/retailing activity anywhere.

Breaking from the competition is what Blue Ocean Strategy is about. And there are umpteen opportunities.In a series of post starting with this one I will present few opportunities that I have uncovered. I didn't create any I merely identified them and tried to make sense out of these and put in front of the readers of this blog.

Opportunity: Lending Jewellery to Fashionistas.

Today keeping pace with the fashion is a luxury only the very rich can afford. India has a booming middle class who have a growing disposable income and a penchant for fine things. This disposable income is enough to satisfy needs for perfumes, clothes or shoes but jewelry being among the more expensive possessions cannot be bought new every year or every time fashion changes. Since not many can afford to get this fashionable but how about renting fashion.

So to satisfy this urge some businesses have come up quite an innovative solution.
Take for instance, Bag, Borrow or Steal a US. based website which lends designer handbags, purses and jewelry. The website charges a nominal fee and allow user to rent Gucci, Chanel, Louis Vuitton, Coach, Prada, Fendi and more designer handbags. Same goes for jewellery. There are a few more in this space like from bags to riches and bling yourself.

So now an expensive product was converted to a service, and a huge market waiting to be tapped.

Related Articles:
Bridal Jewellery on rent

India 2012: Loose Diamonds/Jewellery retailing hub

Take a hard look at the buy back policy

I have a habit of stopping by the jewellery section of mega stores whenever I am in a mall, just to check out designs at some of the branded jewellery counters.

The good thing about the branded jewellery is the designs especially suit the career woman who like wearing light jewellery to work.They are easy on the pocket and very well finished so the glitter is hard to resist.

Just recently I was at Shopper's Stop in Ansal Plaza in south Delhi. Over at a jewellery counter,
on a casual enquiry about a ring that i liked I found the return policy of the company gave you only 75% of the cash back but on exchange they will value it at 90% of the original price.

"That's a Rip off!!" I protested.
"But we don't charge any making charge" she countered.
"But that doesnt explain 25% of my money" I replied.
The coy sales girl could only muster a few words after that "Its the company's policy."
I didn't expect any other response. But I got something to write about.

To some it might come as an after thought, but if gold jewellery is something you buy fondly and truly believe any money spent on gold is an investment, then you got to remember this:

The value of your investment is the money it will fetch in the market when you sell it.

Knowing the return policy on the jewellery item at the time of purchase could save you from burning a hole in your pocket/investment.

Best in Class Buy Back Policy:

Tip1: Your gold jewellery should be, well worth its weight in gold. Typically only making charges should be deducted on returning your gold jewellery.
Tip2: In case of Diamond jewellery expect to pay up deduction of (making charges + 10% off) on the value of jewellery, on account of losses incurred by broken diamonds and wastage of gold.
Tip3: A jeweller should promptly process your return if bought from the same store. Non-hallmarked jewellery could be subjected to an assay test at a nearby hallmarking centre. Determining purity shouldn't taken more than a couple of hours anyways.
Tip4: There should be no loss in value whether you go for cash-back or exchange.

Gold touches record high of Rs.11,020 today

Phew! Gold will glitter more from today. It touched an all time high and crossed the Rs. 11,000 mark in the Delhi market. And this bull run has been supported by various factors like weakening dollar, rising oil prices, political crisis, US sub prime crisis.

And if all the analysts are to be believed there is no slowing/stopping here since if none of the above factors are changing then gold will continue to be dearer. This is pretty much on the lines of what my previous post had suggested.

So can we say "Now's the time to Invest in Gold" ?

New Arrivals: Italian Chains

Italian Chains are known for their impeccable finish and vast array of designs. These chains have been very popular among the local market in India for long. So much so that now manufacturers in Mumbai have started making them in India.

These chains are crafted in 18K gold which are BIS hallmarked. The making charges for these vary from Rs.180/gram to Rs.350/gram. These can be used as daily wear chains with the more stylish reserved for formal events and vary from Rs.10,000 to Rs. 25,000. Oh! and they make a great gift idea.

All the chains featured are currently available at our store. Click on the image to enlarge it and view the details.

Heads Up: Gold prices to rise in 2008

After the 2007 shooting up of gold prices one would think that it would see some correction. Looks like this wouldnt be most prudent assumption going by the pundits in this trade.

What do these pundits think?

Analysts in Hindustan times' article titled' Gold to shine in 2008' believe a number of reasons like rising oil-prices, weaking dollar and political uncertainties will fuel the demand for gold. The gold futures( which determine the actual price of gold) for February are also closing a trifle higher than last week's close.

Another magazine Outlook Money adds in their article titled 'Time to add some sheen' that the beginning of 2008 is the best time to invest in gold funds or bars/coins but not jewellery.