Asking for price break-up runs in our blood considering the nature of gold, but lately design factor is also picking-up as oppose to the investment factor. Hence, Kunjal Karaniya brings you some interesting perspectives from the industry itself.

Beginning with a fresh and interesting perspective shared by the CEO of Jewellery Division, Titan Company Limited – Mr. C.K. Venkataraman. He shares that I would like to distinguish between jewellery as an investment and jewellery as a store house of value.

Investment is when you put your money in something and few years later it becomes more as oppose to that in the store house of value, when you put 100 per cent and around 60 to 70 per cent will be remaining. This is also different from everything else whose value diminishes instantly once you buy like car, mobile etc.

In India jewellery being looked as a store house of value continues to coexist with being an investment purchase.

In the markets where it is not perceived as a store house of value, we need to ask the question of making charges.

Simply putting it, a gold coin is purely an investment, so I will want to pay less making charges. Simple gold jewellery like a plain gold kada is also somewhat an investment but in a jewellery form, so I will still want to pay less making charges but can be more that the coin. On the other hand, I would be willing to pay more for a beautiful polki necklace as the adornment value increases, but I will still want to know the break-up as it has a store house of value. Whereas, if it is just an adornment like a Gucci bag, there is no need for break-up. Nevertheless, times are changing and jewellery is perceived more as a store house of value than mere investment.

When it comes to eradicating the break-up disclosure, it is not possible until the nature of gold goes through change, it is almost like money. Having said that, there is still potential to do away with this practice. Looking at today’s modern women, they would not mind spending 15 to 20 thousand in a small piece of jewellery with no price break-up and slowly this could be converted into a regular habit for heavy pieces.

This could be beneficial for the industry too, as when compared to the West, Indian jewellery industry suffers in terms of profitability. Ability to charge fair making charge is under pressure. On the other side, some might argue that, India has an upper hand when it comes to gold consumption; as the volumes are fantastic which compensates. Still the fact remains that the ability to charge premium is under pressure due to this break-up practice, but it will take time to evolve.

Seema Mehta, Director- Creative, Kirtilals echoes the sentiments, she adds that this practice is prevalent for many years and it will take some time for marketers to change. In India it is difficult to do away or ignore the consumer's investment angle that is associated with jewellery purchase. Charging premium for the design element therefore is difficult. The situation however is changing among the Gen Next customers and the millennials who value designs.

Taking a perspective from a popular brand who has adopted this change, Vijay Jain, CEO and Director, ORRA shares that yes, this break-up of pricing should be done away with. Currently, jewellery is being sold as a commodity rather than as an aspirational product or a product of beauty. And, perhaps India is one of the last few countries where it is still being sold as a commodity. It reminds me of the apparel business 20 years ago, when people bought shirt material on a per meter basis and paid the tailor making charges to make the shirt. The market has since evolved, into ready made shirts sold on an MRP basis. I believe that this is an evolutionary process and we see this happening sooner than later. Today, investment value has become a hygiene factor and ornamentation is the primary factor for buying jewellery. ORRA, for more than a decade, had been selling diamond jewellery on an MRP or a fixed price basis and the experience has been great for us. We believe sooner than later, the rest of the market will adopt it. On the gold side, we believe the process might take a bit longer.

Coming to the design factor and challenges, he adds that the design has always played a critical role in jewellery and we believe it will continue to play a significant role. People are more willing to pay for design and innovation on lower priced products and the extremely high priced products. I think the biggest challenge is the middle segment where consumers sometimes confuse cheapest price being equal to value for money.

Saurabh Gadgil, CMD, PNG Jewellers & Director IBJA has a varied opinion, he says that few retailers have already started selling lightweight jewellery at MRP, hence they are able to pay more emphasis on the design element. Some of them have also been quite successful. But when it comes to heavy neckpieces and bigger statement pieces the Indian audience would ideally like to understand, customize and negotiate products according to their preference, likes, dislikes and budget. A break up cost helps them to understand and negotiate better.

Siddharthaa Sawansukha, MD, Sawansukha Jewellers Pvt Ltd is all for this change, he points that the trend seems to have evolved whereby increasing number of individuals is opting for designer piece. My understanding is completely based on the fact that in today’s growing jewellery sense, consumers should not consider only on price break up but on designing essence as well. Every generic jewellery piece has a buyer in the market and the selling concept should be the same as the ongoing trend. But in the modern era, I believe the pricing should not matter for a designer piece because it has a concrete perception behind its designs. From now on, the change in trend towards selling should be adapted by the sellers.

Taking a perspective from a popular jewellery designer, Sangeeta Boochra, Creative Director and Designer, Sangeeta Boochra (a brand of Silver Centrre) shares that when it comes to plain jewellery and plain work, I feel the break up is good to give as it is all commonly made designs which are manufactured in bulk and in quantity. But when we talk about creativity and designer jewellery, lot of effort is required in making a piece from the sketch to its real form. For example – A designer develops a piece in silver for Rs. 10,000. The weight comes out to be 50 grams. Now when we talk about breakup – silver value is of approx Rs. 2500 ( approx. 50 per gram for silver ). Stones – Rs. 2500 and the rest is all designing and labour cost, hence it is very difficult to justify a client on this basis. Hence, designer pieces are difficult to sell with breakup.

Ishu Datwani, Founder, Anmol Jewellers makes a strong point, he says that jewellery is no longer restricted to investments it has become a symbol of luxury or your achievements. Jewellery thus brings more value to a consumer than just the investment value of it. It is the need of hour to identify jewellery as a luxury product just like automobile or gadgets are and the break-up of pricing should be done-away with. While, Hardik Kapoor, Founder of Jewelsify.com has an exact opposite opinion, he says that I don’t really think it is non justifiable as the breakup pricing provides transparency in the jewelry purchase, it is absolutely the right of a customer to know the details of each and every component of the product they are purchasing. Design factor is not at all affected in breakup pricing. Customers are intelligent enough to value exclusivity and are willing to spend the required amount for exclusivity. India is becoming quality focus rather than only price focus. Sanjay Jagwani, Director of Notadas Jewellers has similar views, he says that break-up pricing is the value breakdown of the amount that one is investing while buying gold. According to the Indian mentality, break-up of pricing does matter. As an investor one would want to know where he or she is paying and what is he or she paying for. The making charges, gold value, diamond value, metal value does matter and it would grow with our generation as well.

Sharing a consumer perspective, Atul Sinha, Sr. Vice President, Marketing, ‎CaratLane strongly states that we believe that customer comfort and satisfaction is most important. Sharing the detailed break-up of pricing makes the purchase decision easy for the customer as it gives them a clear understanding of what they are buying. From a customer's point of view, this is important, because many of them buy jewellery as an investment and are keen to know the value of gold in the purchase that they make. Given that jewellery buying in India has a deep-rooted significance as a ‘store of value’, we don't see anyone adopting a wholesome pricing strategy any time soon.

Highlighting a middle approach, Gautam Ghanasingh, CEO and Creative Director, Ghanasingh Be True explains that pricing and its break up play an important role for the customer. Thus the shift from price break up to a wholesome approach will have to be gradual, keeping in mind the sensitivity of the consumer. For us, as a retail jewellery label, the break-up of pricing affects the design element to a great extent. However we have a middle approach, where the gold weight and diamond weight of each piece is communicated to the consumer in-order to give them an idea of the price.

Siddharthaa Sawansukha perfectly sums up, he makes a point that India is one of the foremost players in the Gems and Jewellery market but in order to maintain as a leading player, it needs to adapt to the changing lifestyles and expenditure pattern through wholesome pricing. Since, my vision of future market believes that if other countries can adopt wholesome pricing, why can’t India do? There is always a fear factor behind every initiative. Until and unless we adopt this scenario, how can we judge the outcome?