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Saturday, August 22

The Kerala Gold Rush

An unprecedented number of Jewellery showrooms stipulated to open in the heart of my hometown in Trivandrum sparked this article, to dig deep into this phenomenon.

The phenomenon called Gold.

Kerala is well known for a higher than average consumption of two materials: first the ethyl alcohol products we usually mix with water to quench thirst and boredom, and second this yellow metal. The craze for these two items are quite legendary that you will find the most obedient, law abiding and orderly men in front of the Beverages Corporation outlets and the most spirited and trendy of women in these Jewellery showrooms. Quite a phenomenon, don't you think so?

Keralites' madness for the yellow metal is so evident from the fact that there are expansive Jewellery shops in every nook, corner and bend of the state. The small pass-through town of Karunagappally, a quaint town midway between Cochin & Trivandrum, proudly exhibits at least a dozen gold shops, some of them rivaling those in the big Indian Metros.

I've been kept guessing at the unveiling of these Jewellery showrooms all across my city this Onam. Its just a few months back that some of the well known jewel merchants like Sunny Diamonds, Prince Jewellery (Chennai) and Kalyan Jewellers(Trichur) set up shop in Trivandrum. And this Onam and the subsequent few weeks will see the unveiling of nearly half a dozen glittering branded jewellery merchandise ranging from 10,000 sq ft shop area to 25,000 sq ft.

This is not just restricted to Trivandrum alone; Aerens Gold Souk International is all set to throw open the mother of all Gold showrooms on NH Bypass, Cochin. A colossal 5 lakh sq ft of pure pristine space largely devoted to gold and silks. As per reports nearly all the major jewellery retailers in the country will have their own space in this specialty mall. Cochin already hosts all major Gold retailers within the state as well as from places like Mumbai, Gujarat and Rajasthan.

Speak about all these recession, retail-gloom, job-losses, curbing of business expansion...I don't see any loss of glitter in these jewel merchants' face. In fact their business seem to be on an overdrive! What a paradox!

Kerala buys/sells over a quarter of the 800 tonne Gold sold all over India. The market is estimated at a whooping 20,000 crores. An established branded dealer sells anywhere between 10kg-40 kg Gold one single day; so that's just 1-5 crores per day! Small shop owners pinch out sales of around 100g to a few kilograms from between the whales.

One can't complain, considering the impact this business has on Kerala economy. The industry employs around 2 lakh people, including 40,000 goldsmiths and 5000 retailers. A single 2,000 sq ft showroom will employ as much as 25 personnel and a massive one such as a Wedding Center could generate hundreds of local jobs. In Kerala, Trichur is the focal point of the jewellery manufacturing industry, harbouring nearly 3000 craftsmen units.

The Govt has taken one appreciable step forward to provide fillip to the industry where Kerala is functioning well. In a deal to organize and modernize the jewellery related business and jobs, GoK has initiated the construction of a Gold & Diamond Park in Kalamasserry, Cochin. This facility by Aerens will host a multitude of features such as Training centers, gemology institutes and facilities for testing, manufacturing & hallmarking of jewels.

But why all this mad rush behind the mellow yellow?

Keralaites trust Gold with all their heart. Gold has become the one thrust area for investment for an average Keralaite. And the metal hasn't let the trust down. When the much hyped-up real estate markets fell headfirst during the downturn, and every commodity from rubber to spices & oil to coconut have come crashing down, gold maintained its value and surprisingly, the prices even soared. One sovereign (8 grams) of Gold were heading towards the previously unimaginable mark of 10,000 Rs. This, one mustn't forget, is from a Rs.3000 odd at the dawn of the millennium and from 125 Rs in 1970.

chart courtesy

Gold is more a social symbol than a prized investment. A weeding in Kerala has become the pompous exhibition of the halcyon metal. It has become a social necessity and it is embedded in the culture. This, however, has become a double-edged sword for the Kerala society. With the tradition of family- arranged marriages, the infamous dowry system and over-indulgence in Gold, the skyrocketing prices have thrown up a nightmarish situation for economically backward families. The efforts of a few social and religious organizations to tame to this Gold-mania has turned out blank pages as our society simply refuses to detach from the age-old custom.

The aesthetic touch gold provides to Kerala women is unmatched. The 22 carat variety (91.6% Gold, remaining Copper) is a fashion statement among the fairer sex. Our brown skin perfectly match the tingy orange glow of the metal when the pale-skinned Westerners are comfortable with the 9 carat gold. The youth are getting more inclined towards nauveau jewels like Platinum, white gold and even the Diamonds but its the yellow metal that rules!

Lately the businessmen have started exploiting the cultural beliefs of the average Keralite through ad-enhanced festivals like Akshayathrithiya, where buying Gold on that specific day supposedly brings you prosperity and luck! *gulp* The campaign was so robust and successful that Keralites took home 10 tonnes of Gold from these shops just that single day! Well, no one wants to miss an easy way to attain prosperity but the joke was that the customers who couldn't get into the shops because of the heavy rush were given sealed slips with which they could come the next day to buy their 'prosperity'!

Anyway, all that glitters IS GOLD in Kerala. :)

Addentum: Should have been a magnificient preamble, but Nikhil's Gold's own country would make a nice epilogue to this article.

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