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Monday, August 01, 2011

All that glitters is not gold …Or is it? The face of Gold, or rather jewellery in that form has literally, changed. Today, what is in vogue is not the actual jewellery made of 22K gold, but the cheaper and equally exquisite offshoot of the yellow metal called ‘24 carat Gold Foaming Jewellery’. Well! It’s one gram gold jewellery for you and me. Yet it looks and feels as good as the ‘original’. And as the festive season sets in soon, this form of ornamentation is going to be much preferred, both among the rich and the middle class, alike. Mayura Shanbaug scoured the heart belt of Mumbai’s jewellery markets and spotted a wonderful collection of ornaments that are affordable and feel safe to wear in the present times when the ‘Gold Dust’ is touching sky high values. Her Report…

The L’ amore’ or lust for gold jewellery is woven in the social and traditional fabric of India. But with gold prices breaking their own records every day, this yellow metal seems to have gone beyond the reach of the common man. And like they say, necessity is the mother of all inventions; Indians today are satisfying their fetish for gold by buying it in its alternate form also known as Foaming Jewellery.

“Buying gold jewellery is such a costly affair that not many people can afford to buy pure gold jewellery these days. The total sales for pure gold ornaments has come down to just 33-38% this year so far,” says Hasmukh Bafna, president, Gold Chains & Jewellery Wholesalers Welfare Association. “Jewellers have moved away from selling only pure gold jewellery and diversified their trade by selling the 24 Carat Foaming in Jewellery form,” he said.

There are also the profit margins to be considered in these present times. “The gold jewellery wholesaler earns a profit of 2-3% on the 22 carat gold sets they sell; the profit margin on chains and rings is mere 1-2%. In contrast, 1 gm gold jewellery nets a profit margin of 20% to the wholesaler and more than 50% to the retailer,” explains Lalit Jain, Proprietor of Mahaveer Gold , who diversified into the foaming jewellery business ten years ago to cash on the new trend in the market. Simply put; there is more money to be made in this form of sales. Naturally, even the big jewellers have got into the race. The total turnover of the foaming jewellery market in Mumbai is estimated to be Rs 1440 crore per year. And it’s set to grow, exponentially. 

What is 24 Carat Gold Foaming?
The foaming jewellery is a mixture of three metals; copper, brass and gold. When the design is hand made the base is of copper with a coating of gold. When it is machine made, brass replaces copper with gold coating.     

What got it going?
To an untrained eye it is very difficult to differentiate between real gold jewellery and foamed gold jewellery. “The design and coating are done by the very designers and workers who make real gold jewellery, hence the finesse and designs are of superior quality,” said Jain.
“There are thousands of latest and popular designs available in foaming gold… more than the designs available for pure gold jewellery,” adds Jain. “The designers from big showrooms of Mumbai come to us for the latest designs and then copy them for their gold jewellery,” he said. 
The popularity of this form of jewellery can be gauged from the fact that the gold jewellery showrooms and shops lined on the dusty by-lanes of Zaveri Bazar have been replaced by showrooms and shops selling only Foaming Jewellery. “The showrooms selling 1 gram gold jewellery are doing brisk business whereas the gold jewellery showrooms wear a deserted look,” said Jain. 

The Changing Attitude…
According to Bullion and Jewellery Wholesaler, Ramesh Wardhan, “Today’s young generation do not want to be seen in the same jewellery on every family occasion or social do’s as was the case with older generations, who used to inherit or buy few pieces of gold jewellery and wear them at every function."
“The ‘it’ generation wants to match jewellery with their attire for the evening and gold being gold, it does not offer them that kind of versatility. The desire is satisfied with the inexpensive and attractive Foaming Jewellery,” he said.

The increase in chain snatching and robbery incidences has forced many puritans to opt for it. South Mumbai resident Asha Jagtiani, who saw her neighbour being robbed of her gold chain, recently, bought some 1 gm gold jewellery for every day use. “There is always this fear of getting robbed when you wear gold jewellery, plus the Foaming Jewellery looks good too,” said Jagtiani.

The Buy Back Offer…
Even if your Foaming Jewellery can not fetch you the resale price as gold does, everything is not lost for the 1 gram gold jewellery owner. There are retail outlets with buy back offers wherein you can get 30-40% of your cost price back or can exchange your old jewellery piece with a brand new one at a small extra cost.

They want it too…         
Incidentally, the bigger chunk of the Foaming Jewellery business comes from exports. “ 80% of what we manufacture is been exported to countries like ,Dubai, Pakistan, Bangladesh  Sri Lanka  and to a certain extent South Africa ,” said Jain . “The prices of Foaming Jewellery have also gone up by 30% in the last one year with increase in input costs and higher demands,” Jain added.  

The Big Boys Are Joining In…
The jewellery market is changing gear and this is highlighted by the fact that the big names in retail segment are also stocking these ‘not so premium’ jewellery pieces. Anand Khare, Manager at Waman Hari Pethe Jewellery showroom at Girgaon, which has a 1 gram gold jewellery segment said, “We cater to a premium clientele who come to us for gold jewellery only.”  “There are a few who want to buy 1 gram gold jewellery, for them we have a small segment of Foaming Jewellery  which contributes to just 1% of our total sale”, he said. 

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