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
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 www.galatime.com
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.
thank goodness to see someone who has the same sentiments as mine...its understandable the craze for this metal among the older generation..but find it weird to see the craze even among youngsters...i wish people invested in something more productive!
ReplyDeleteclassic article dude.......... Gold is so very important to us................
ReplyDeleteas usual, a well researched article......... makes me think always...........
the mallu wedding is so very famous becoz of gold :P
Last time I was in Kochi, I saw hoardings after hoardings of Mandira Bedi in Xian, Hindu and Muslim bridal outfit and tonnes of jewelery. In fact jewelry hoardings lined the way from Kochi to Changanassery. Only Alleppey seems to be free of these hoardings. Keralas' obsession with gold is amusing but right now with gold prices at an all time high, Keralites seem to be laughing all the way to their banks. :p Laughing loudest is my mom though. :|
ReplyDeleteVery good article.
ReplyDeleteI came across the Gold Souk in Gurgaon for the first time. Our good old friend, Alukkas, has also set a shop in that Gold Souk. I don't understand the reason behind declaring a special economic zone for Gold! Is it for our convenience? One-stop shop for Gold? Get on your vehicle, come here and all your needs for Gold will be catered to?
It is true and sad that skyrocketing prizes hit the economically backward class! Gold is unavoidable in our marriages. If the gold is missing, it is because platinum has replaced it! But how is that going to help the poor?
The sales in these shops are huge during the festive season. Most of the employees work on a commission basis. So, their salaries touches a peak during these seasons. 10 years ago, I was working in Cochin. At that time, we developed the sales software for a famous merchant in Cochin. During the festive season, their salesmen were carrying more money than us to their homes! At least, I felt good to know that they are paid well!
And taking us for sucker during "Akshayathrithiya". This is only the beginning! Even other merchants are promoting "Aadi" and what not! They are trying their best to create a festive atmosphere. :) After all, Onam and Xmas are only two events. There are 10 other months in the year and they want a better sales during these intervening period!
nd I got the impression that even Scorpio loves the metal for investment sake at least.. :)
ReplyDeletebut with the rising thefts from even banks, I wonder if it is wise to invest in this metal in the coming days..
wish Keralites would throw this gold mania away and stop locking their hard earned money thus..I am sure this money can be used in a better way..
most Keralites buy this metal only to lock it up and hand over the same as dowry... imagine the amount of money locked up for ever with no use except to flaunt it occasionaly...
The sad part of it being the fact that most of the 916 gold is much lesser in quality;Iridium and Ruthenium are added.
ReplyDeleteNeed to check the demand for these elements through the years to figure how much Ir /Ru is locked in our bank lockers.
-Nikhil
Gold has no real spin-off benefits or development value. Instead of putting your life savings in a metal that can lose its value with ease (don't believe me? Gold, in the US in 1980, hit a record of $850/troy ounce, the 2008 dollars equivalent of $2200/troy ounce, a level from which it completely fell away from and has not even reached half that level in the past two decades. Now, if you had put that money in stocks or bonds instead, you and your children would be much better off. I would much rather give my kids $10,000 in index funds and bonds than $10,000 in gold.
ReplyDeleteOther than the increasing price, the jewelleries eat up a lot from the layman's pocket quoting vat and making charges. Even with all that, keralites don't bother... Come a marriage and lakhs are put into buying the gold..
ReplyDeleteIf bought checking the market prices and after studying and bargaining well, gold could be a good asset as well.
@ Mathew, yup. Gold fascinates people of all age, class and gender in Kerala
ReplyDelete@ OG, thanks man..
@ Silverine, Keralites dont seem to SELL Gold, they treasure it as an asset to hand over to the next gen. And not everyone seem happy with the skyrocketing prices. What about the ones with daughters waiting to be married off? Its a frightening prospect!
@ Nona, well said man! Its all business and a matter of phishing out money from someone else's pocket. :) This Akshayathrithiya really amuses me.
@ HK, thats the point. It doesn't do any good to the nation. Only thing if you're in need for money then any bank would lend you some if you've gold in hand. PS: Im not a believer in Gold as an investment option. Just jotted down on how it is viewed upon in Kerala. :)
@ Nikhil, I've heard the same accusations about these jewel merchants but so far they seem clean. But the way these guys throw open a massive showroom once every few months gets me wondering.
ReplyDelete@ Jason, valid points there, thanks for sharing.
Many economists share your concerns. Too much money (in the Au form)is locked up in our house safes and bank lockers which, if invested wisely could add to our country's GDP. Its not an intelligent investment if you're a businessman but the common Keralite thinks in a different perspective. My dad always thought about accumulating Gold for my sister whenever he saved some money. Stocks and shares never appealed to him because he was fixated on her bright future (read marrying her off with a good amount of Gold). Its the system Jason, and I dont see a fault in any dad thinking alike.
I've chosen to invest my money in property as well as Stocks and shares but does it assure guarantee? In fact at the moment I see red with my Mutual Funds, lol, even if its temporary. But the common man of yesteryears wont want to risk a game with their kid's life, given our social framework of arranged marriages and inheritance. Lets hope this will change for our society's good.
@ Rocksea, thanks for the comment, as far as the prices dont dip, it will stay an asset. But as Jason pointed out there are far better options if you want to grow your money. :)
Kalipp article :D
ReplyDeleteEven I was surprised at the number of new jewlleries opening in Kerala, 2 of them morrow..
It seems like the pie is so large that whoever opens shop will make profitable business..
It was hoped that with changing times and rise in education levels among youngsters this will change in the new millennium...but as u noted, they too are obsessed with the yellow metal..
Loved the take on how it provides employment to a lot of people in associated sectors...never thought of that angle..
As usual your post covers both sides of the coin. I don't really have an opinion about this business. True - Investing in gold is not productive. But then its a safer form of investment than others. Why would people risk their hard earned money for better productivity? After all, everyone wants to multiply their money right?
ReplyDeleteWonder whether the mindset would change with our generation. Going by the number of mushrooming gold palaces, the belief in the system only seems to be increasing.
nicely written... :-)
ReplyDeletein fact i always to wonder where all the gold (from so many shops) disappears to and how there is so much market for all these big and small shops (plus the ones that keep opening newly)...
my eyes nearly fell open reading this:
The market is estimated at a whooping 20,000 crores. OMG!! height of obsession with this metal...!
in fact if i remember rite, i read once that kerala is the largest importer of gold in india as a state. i'm not surprise.
as u said, the connection between gold and weddings goes back to time immemorial... becoz gold is both a social symbol as well as an investment. the number of pavans a girl must have in order to seem "decently" married off..keeps rising .. which provides a huge strain for economically backward families.
i guess i m one of the few loonies who, in spite of being a girl and being from kerala, is not really attached to this metal. its beautiful, its admirable...all that yes. but i m not particularly inclined to wearing it .. and i dont understand being obsessed by it :-) i m sure most malayalis will b ready to kill me now... lol
Scorpio,
ReplyDeleteThe thing that gets me about this gold trade is the immense tax evasion thats part of this. Any gold store in Kerala will charge you more if you want to pay by credit card. This is kind of an accepted fact. For a state that taxes everything from hawaii chappals to salt, realizing the revenue from the retail gold trade might mean that taxes on a host of stuff could go away.
This is Vinod, I am not sure what my google account will show up today as :-)
@ Praveen, I dont see Gold losing its charm anytime soon. So people will still buy it and keep them locked up.
ReplyDelete@ Layman, it seems so, unfortunately. I can't think of any ways to crack this thing up. Getting stricter on the dowry system may help. Like, impose a 20% tax on dowry, and the groom should pay that.. Howzaaaat?
@ Ashwathy, ur parents will be happy people. Only thing that remains to be seen is weather your hubby would be happy.
@ Vinod, of course I know Orchard Resident is yourself ;)
Yeah, there are strong pointers that this does happen. But what has our bureaucracy and legislature done about it? They must've cold feet moving against a strong organized sector. And look at these big fishes, they're all linked one way or the other to political whoz whos. So there...
Oh good idea..
ReplyDeleteOne that can be tried out after I'm married ;)
I am unable to find my earlier comment. Here is it again !!
ReplyDeleteGold craze is not just among the malayalees, I guess it spreads over the entire nation.
If we put together all the gold locked away in private/bank lockers, it would be more than what the rest of the world has ;)
Kottayam has more gold shops than hotels !!!!
The love for Gold, thirst for safe investment, are all because of another strong under current in our society, the dowry system :-( Rarest of guys may resolute that they wont take dowry. But almost very few parents of the bride-side will think that they won't give their daughters to dowry-gold-greedy men.
ReplyDeleteEven we, when making each penny, have to think how much more we need to marry off our siblings.
Once the gold is transferred to the girl, she needs to think about her sons/daughters who are yet to come to the earth.
Never heard of anyone who sold all his Gold, made a fortune and lived happily ever after...
And, Akshaya Thrithiya, you made the point!! I was always wondering where was this festival 10 years back!!
I think the government has to introduce some kind of rationing in the use of gold. The madness after gold has to be curtailed somehow. How unproductive is the money spent on Gold as if people will sleep better over a pillow made of gold!!!
ReplyDeletehii...this article is simply gr8..
ReplyDeletesuperb...
It is so nice to visit and find some good gold there.
ReplyDelete