Shopping malls pare Vizag jewellers' business by 15%

The advent of shopping malls in the city is eating away the businesses of several small and medium range gold and silver shops.

"With the shopping mall culture catching on in the city, a majority of small and medium jewellery shops have seen their business shrink by 10-15 per cent. We expect another two to three big malls to enter the city. Once they come, the business of the existing gold shops business will fall further,"A Gunnayya Gupta, secretary of Visakhapatnam Jewellers Association, told Business Standard.

Recently, two shopping malls that opened in the city have been offering a wide variety and range of gold and silver ornaments in addition to garments, sarees and several other household items.

After the introduction of branded jewellery like Tanishq and Oyzterbay in the Vizag market, several local gold merchants have lost some business, and the recent mall culture has further eroded their fortunes, a jewellery merchant said.

In Vizag a majority of gold and jewellery outlets is traditionally concentrated in the Kurupam market area in the old town. Around 400 small and medium gold and silver shops do business from this area alone.

For the last seven years, some of the big gold merchants have shifted to Dwarakanagar area, the growing commercial area in the city at present. Merchants have invested around Rs 2-3 crore on a shop in Dwarakanagar area, and there are around 15 such big jewellery shops in Dwarakanagar.

Following this development, the Kurupam market area gold shops have seen sales fall significantly. At present, around 80 per cent of shops in Kurupam market are doing around Rs 25,000-40,000 business a day.

The remaining few get a business of Rs 50,000-70,000 a day. In contrast, at the Dwarakanagar area jewellery sales are touching around Rs 1,50,000-3,50,000 a day.

CMR and Kalanikethan shopping malls have invested huge amounts on malls and particularly in jewellery wings.

"Previously, most of the customers during wedding seasons first used to visit saree showrooms and go to gold shops later. Now the trend has reversed. These shopping malls sell not only sarees but also a wide range of gold jewellery including branded jewellery. Customers are preferring these malls, as they need not waste their time in going to gold and saree shops separately. This is affecting the business of gold shops significantly," Gupta explained.