Small gold shops lose sheen

Vijayawada: Small gold traders are losing their business and gold workers are quitting their profession due to decline of sales and lack of patronage in recent months.

Besides, the burden of GST and impact of demonetisation also severely affected the business in the city. Around 800 registered gold traders are there in the city providing livelihood to more than 7,000 workers. These small shops are located at One Town and Governorpet.

Due to rising of corporate jewellery showrooms, which give a wide publicity and produce a variety of latest model ornaments, most of the customers are getting attracted to the corporate showrooms.

The number of corporate gold showrooms are increasing year after year and capturing the market. On the other hand, traditional small gold shops are losing their business gradually and struggling for survival.

Bojja Ravinda, secretary of the Kamakshi Swarnakara Sangham, said several hundred gold workers have already quit the work and joined as workers in petrol bunks, hotels, other shops while some others became auto drivers for livelihood.

He said the corporate showrooms have badly affected the trade of small jewellery shops. He said many customers were used to visit the small shops and give orders for making gold bangles, gold rings, necklaces, ear rings and other articles.

He said the small gold shops which are about 600 in the city are struggling to pay the shop rents, power bills and meet other expenses.
The Central government collects three per cent GST on the purchase of gold. Similarly, it collects tax on sale too.

Gold traders buy gold biscuits and bars as raw material and use for making gold ornaments. They have to pay three per cent tax for buying gold. Again, they have to pay three per cent tax to the government for sale of gold jewellwery. “We have to pay the tax twice”, says Bojja Ravindra.

After Vijayawada became the capital of Andhra Pradesh, shop rents increased by more than 100 per cent. Besides, other expenses, too, increased. But the business of small traders remained same if not declined.

T Annapurnaiah, one of the oldest gold traders in the city and senior member of Bullion Merchants association, said the gold market has not fully recovered since the demonetisation in November 2016.

"Generally, the gold traders have business for only three or four months in a year that too in festival and marriages season," he pointed out. The middle-class families are unable to cope up with the high cost of living, increasing house rents and other expenses.

The affluent are naturally visiting the big corporate showrooms because many varieties are available, and showrooms offer discounts during the festival season.

Besides, vehicle parking problem also affected the trade of small gold traders at Governorpet and One Town. Several hundred shops are located in these two areas. But due to lack of parking space, the customers are unwilling to visit these shops.

On the other hand, corporate gold shops are providing ample parking facility and employing the trained staff to explain the customers about the quality, price and other details.

In order to boost the sales, these big showrooms are offering discounts and giving a wide publicity with film stars, models and others. All these factors have contributed to the downfall of business of small traders.

By Md Ameen