As part of the seminar schedule organised concurrently with the IIJS, the second day saw a vibrant and informative  exploration of the topic “Retailing Jewellery in Rural India” by an expert panel.

The discussion was ably steered by moderator Anil Prabhakar, Director of AAy’s Consulting and had as  participants  well-known and experienced veterans: Keyur Shah, CEO of the Precious Metals Business of the Muthoot Pappachan Group; N. Vaideeswaran, Head of Retail, Goldplus (a Titan company); Jignesh Mehta, Managing Director of Divine Solitaires; Sankar Sen, Chairman & Managing Director of the  Senco Gold Group; and Pradeep Lokhande, Founder & CEO of Rural Relations. 

Providing a general background and framework to the discussion, Prabhakar said that India was not a homogenous country but a complex one. He posited the breakup of the country as India I – urban areas  comprising about 48 cities nationwide and having a 25% share in consumption; India II – semi-urban  regions comprising 7,800 small towns, and also having together a 25% share of consumption; whereas India III – or Rural India – comprising more that 6,39,000 villages accounted for 50% GDP of the nation. According to the WGC, Rural India has an off-take of about 60% of gold jewellery too.

Prabhakar  pointed out that due to various factors, Rural India from being merely producers are also turning into consumers and their appetite for, and ability to purchase various goods, is growing. No one can ignore this segment he said.

It was interesting to note that each and every speaker stressed for the need for transparency, honesty, purity of the product and maintaining standardisation one way or the other. These have become by-words in business today; and they are no less applicable in the rural areas than they are in urban regions to maintain consumer confidence and satisfaction.

 N. Vaideeswaran said that the Goldplus brand was created by Titan primarily to target  Tier II and Tier III towns to address semi-urban and rural markets. “Without compromising we wanted to introduce these markets to a good retail experience, a quality product, and honesty,” he said. “We wanted to embed our value system amongst the consumers there.”

In order to engage the buyers of this area, they began by taking a company branded bus which had  gold testing equipment, and personnel capable of explaining various aspects of gold jewellery buying. Here consumers were invited to get their jewellery tested and put up any questions they had. Thus  began the journey of spreading awareness, information and creating an environment for a more conscious buying process.

Branding building in the rural areas is not easy, Vaideeswaran  said. In order to be successful  Goldplus  had to address various aspects:

1. Breaking  the bond with the family jewellery  
2. The Tata brand name helped and they were able to introduce consumers to the company’s principles of honesty, purity, quality and the highest standards all round
3. Create a good instore experience for consumers

Keyur Shah said that the Muthoot Pappachan Group had decided to start the precious metals vertical in order to “help monetise ‘locker’ gold”; a move which has met with great success.

 It was their experience, he added, that people often want to pledge gold, but don’t want to sell it. “It is a common misconception that gold is sold in an emergency,” Shah said. “This accounts for only 5%-7% of such gold; more than 90% pledge it, and these are mainly people who use it for their regular needs or are poor entrepreneurs.”

He gave the  example of a vegetable vendor, who might pledge her gold to finance purchases at the  wholesale market. She then typically returns in say a week’s time and redeems it.

Building on this insight, his company went on to introduce “Swarnavarsham” which is essentially jewellery which comes  in tamper-proof  packaging. With a low ticket value, it is almost like making small investments, and is sold as such too.  “We did this to standardise the product for the masses,” Shah said. “Standardisation and a high level of transparency is very important to succeed.”

Jignesh Mehta, Managing Director of Divine Solitaires, the company which introduced the first  diamond solitaire brand in the country, narrated how his experience of a wedding in a rural area had let to the creation of the brand. The bride, from a well-to-do family was adorned entirely in gold, and on enquiry it was found that the family were unfamiliar and uncomfortable with purchasing diamonds and felt they would be cheated. Mehta perceived an  opportunity --  and the rest is history. “What was missing is standardisation and transparency,” he says. “There was a large gap. Rural India is now ready to purchase diamonds.”

The Company  also produces for its customers and potential customers a Divine Solitaire Price List, which shows the consumer the movement of diamond prices. This has convinced them that diamonds too appreciate in value and can be seen as an investment just like gold.  Divine Solitaires reaches semi urban and smaller town through their retail partners and has found a good and growing response in these areas.

Sankar Sen said that Senco had started its journey into Rural India 16 years back. He felt that while companies pamper urban consumers, rural consumers tend to be neglected. “We need to give them a better product, with better designs, better quality and   a better buying environment,” he stressed. “We should be more aggressive in promoting our products to them as well.”

He reiterated that transparency and better “treatment” to rural consumers  was the key to success in those areas.

Pradeep Lokhande said: “Rural India has been royally cheated for the last 65 years.” By this he meant the general neglect of consumers there and a taking-for-granted attitude by companies.

However, he stressed that Rural India  had and was undergoing a huge transformation. Consumerism was being boosted in those areas and they were also getting much more aware generally. The various factors underpinning  the  growth in consumerism he cited were: increase in education; widespread reach of  communications; minimum support price being given to farmers which is   increasing over the years and adding to their economic stability; spread of infrastructure to these areas; and the Panchayat Raj system.

“There is demand in Rural India,” he averred, “and consumers have started understanding the concept of value for money.”