Bangalore-based Rajesh Exports Ltd (REL), a Rs 20,000 crore gold jewellery manufacturing and exporting company, on Wednesday, announced that from May 15, 2010 its 6 retail outlets, branded ‘Subh’, will start selling gold jewellery at the actual rate per gram.
The company termed this effort ‘Gold Revolution’ because contrary to the general practice of all jewellery stores in the country, the price of jewelleries in Subh outlets will not include additional charges like wastage, making charge, value addition charge, etc. REL will sell 22 carat gold jewellery and coins with Hallmark of 100 per cent guaranteed purity and launch the new initiative from its new Subh showroom on M G Road.
Briefing reporters, Chairman Rajesh Mehta said “customers in our outlets will be paying only at current rate of gold. Simply check the weight and multiply it with the price of gold displayed on the board. No hidden charges, no extra payments, no confusing calculations.” According to Mehta, jewellers charge between 18 to 25 per cent extra on the weight of gold jewellery under the guise of various charges. REL will do away with all these and charge only for the weight of gold to bring in complete transparency in the trade.
Giving an example, Mehta said if the international gold price at the time of purchase is Rs 1,600 per gram then Subh will charge 3 per cent or Rs 48 more per gram towards its various costs. So, for a 20 gram jewellery one will pay Rs 32,960 (20x1,648) at a Subh outlet, but the same is likely to cost around Rs 38,400 in other shops that charges 20 per cent extra as various charges. Subh will also have a dynamic gold rate system that will display revised rate of gold whenever the price goes up or down by one per cent.
Mehta said although REL’s new pricing system will displease almost all jewelers, he hoped that this will start a new revolution in the trade that will abolish all customer-unfriendly practices. There are seven intermediate agencies between a retail of jewellery and sourcing of gold. Since Rajesh Exports sources its own gold from mines in Australia, refines it and makes jewellery using designs developed in house, it has effectively removed all these layers and enables it to sell jewelleries at the most competitive price, he said.
In next three years REL plans to open 250 Subh showrooms in various cities in the country, a ten fold jump from 25 at present, at an investment of Rs 5,000 crore. This will help the company boost its presence in jewellery retail space which now accounts only for 2 per cent of its revenue. REL currently exports 80 per cent of its production and the balance is mostly sold to the jewellery trade.
