Goldplus from Tata banks on rural buyers

February 18, 2009

Commodity Online
KOCHI: A recent report in India’s leading daily The Times of India said goldsmiths and jewelers are cheating gold buyers in a big way by adulterating the yellow metal with iridium and ruthenium.

The report said gold sold in jewellery shops across India contains at least 5 per cent of adulteration.

So, how will you tackle this problem? That is what is Tata’s aim now. Seeing a business opportunity to help gold buyers get pure gold, ‘Goldplus from Tata’ is now hard-selling its jewellery in small towns across India.

In an effort top compete with local jewellers in small towns, the brand has launched big campaign in rural areas of India where sale of gold is very high.

As per World Gold Council estimates, about 60% of the gold in India is bought in small towns and villages.

This means that the opportunity is a really big one. Given the fact that very often consumers are never sure both of grammage and purity, the company believes that a trusted name like the Tata is well poised to dominate this segment.

To promote the shops, after showcasing the store, screening audio-visuals and even encouraging visitors to check the purity of the gold they possess, the prospective buyers are served snacks and then dropped back home.

Goldplus from Tata is the jewellery retail venture of Titan Industries that specifically targets the small town consumer, as opposed to Tanishq, which is the company’s more upscale brand.

Goldplus has notched up Rs 400 crore worth of revenues and is growing at upwards of 50% annually.

Around 90% of Indian consumers get adulterated gold (under karatage varies anywhere between 12-36 %). As a result, consumers are cheated to the extent of as much as Rs 7,000 crore every year.

Gold Plus believes that there is enough scope for a low-cost model even in a category like jewellery retail.

It’s not only the affluent in India who splurge on gold. On an average 60% of customers at Goldplus spend close to Rs 10,000.

Goldplus is clear that more than anything else it has to win over the trust of the consumer. In order to do that, Goldplus has introduced an initiative called the ‘Golden Chariot’ . This involves taking a vehicle that has a carat-meter, to consumer hubs. Consumers are then encouraged to come and check the purity of the gold they already own using the carat meter.

They can also avail of services like cleaning and polish their jewellery free of cost. This gives Goldplus a foot into the door. To ensure that the door opens further, Goldplus has chosen to play up its Tata connection by branding stores as Goldplus from Tata. It plays around the strength of the Tata brand as it helps bring credibility and trust to the brand. Even the shop signages carry the blue Tata logo prominently alongside the red-and-gold Goldplus logo.

However, as the company has learnt that buying gold is a complicated affair in India. The brand has to appeal to many influencers. When it comes to gold, everybody from the grandmother to the aunt-next-door influence what and whom to buy from. Which means that communicating with the target audience is not an easy task. While television might seem like the ideal medium the fact is that it is very expensive. Given that the brand has opted for below the line activities to speak directly with the consumer.

Goldplus decided to create a promo which would attract attention. It created a 24.5 kilogram gold bangle that gave it an entry into the Limca Book of Records and took the bangle on a roadshow of 17 towns. Consumers were asked to participate in a ‘guess the weight of the bangle’ contest.

The company also offered a photo opportunity to visitors, with options to mail their photographs to five of their acquaintances.

Other innovative promotions include new store openings being preceded by distribution of gold paper slips to potential customers in a 3-5 kilometer radius of the store.

These slips carry the message: to convert paper into real gold, visit the Goldplus outlet. Similar promotions are conducted inside hotels by offering a free sweet dish and the paper coin along with the bill or gold paper with flowers while leaving a temple.

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