Rashmi Menon

Reliance Money: Going for gold

With its first campaign, Reliance My Gold Plan urges people to systematically invest in gold akin to a mutual fund with as little as Rs 1,000 a month.

In a country obsessed with gold, a scheme that helps acquire the yellow metal, despite its soaring prices, at only Rs 50 per day seems too good to be true. The new campaign launched by Reliance Money, with marketing support from World Gold Council (WGC), for Reliance My Gold Plan (RMGP) promises just that.

Reliance Money: Going for gold
RMGP, a product of Reliance Money Precious Metal (a Reliance Capital company), had a soft launch four months ago. With the punch line 'Sona, ab Rozanna' (Gold, now everyday), the multimedia campaign was launched early last week, and intends to drive home the message that through RMGP, people can buy gold on a daily basis.

The television commercial shows women longingly looking at gold jewellery on shop displays, painstakingly saving money to buy gold. The voiceover urges people to convert notes dust tucked away in hiding places into gold. It goes on to tell how, by opening a 'sone ka khata', this is possible.

The campaign will continue on traditional media - print, radio and TV - for three weeks, while the digital campaign will be an ongoing activity. Meanwhile, outdoor activities will also be carried out in more than 160 cities and towns.

How does it work?

Similar to an SIP (Systematic Investment Plan), a customer can invest a minimum of Rs 1,000 per month in the plan, out of which the company will buy gold grams equivalent to 1/20th (which would amount to Rs 50 per day for someone who invests Rs 1,000) of the invested amount every day, irrespective of the daily price movement of gold, on behalf of the customer. The minimum lock in period is six months (maximum 15 years), after which a customer can redeem the investment in the form of gold coins or jewellery from designated outlets and jewellery stores. Currently, RMGP has tied up with 250 jewellers and claims that it will scale it up to 2,000 outlets and jewellery stores by March.

Reliance Money: Going for gold
Reliance Money: Going for gold
A customer can enrol under the plan by filing an application form at designated branches and distribution outlets, which will provide the customer a unique customer ID. About 80 RMGP branches and tie ups with 2,500-3000 major mutual fund distributors across the country will spread the reach of the product across the country, and 4,000 independent financial advisors will assist customers in the process.

The scheme is targeted at women in the age group of 20-35 years and men in the age group of 25-35 years (who are about to get married or start a family). Considering only 10-15 per cent of the total population of the country invests regularly, RMGP aims to cater to the rest who don't. While it is looking at customers in Tier 2 and 3 cities, who have limited opportunity to save in an organised way, it will also not ignore the metros.

Rishit Sanghavi, business head, gold, Reliance Money, says RMGP is a first of its kind gold accumulation plan in India. "We want people to get into the habit of buying gold daily and in a systematic, planned manner. Generally, people accumulate money to buy gold but the prices go further north by then. There are also people who continue to buy gold despite the high prices because they are afraid the prices will further go up," he says.

Sanghvi adds that in the last eight years, gold has given 30-35 per cent return. Hence, investing in gold makes sense. He highlights that according to World Gold Council (WGC) figures, overwhelmingly more people invest in gold than do in equity. In fact, the country possesses 20,000 tonnes of physical gold in savings, which comes to Rs 2.3 trillion in value. However, this huge market of gold investment is largely unorganised.

"We are competing against schemes offered by jewellery stores. However, unlike them, our scheme has zero default risk, provides standard pricing (the daily gold prices are put up at RMGP website by morning) and gives physical coins across designated outlets," he states.

Concurring with Sanghavi, Amresh Acharya, director, investment, World Gold Council (WGC) says it has helped launch similar gold accumulation products in China and Japan, too. He adds that Reliance Money's distribution network and expertise in gold products make it an ideal partner for WGC.

RMGP's creative mandate is handled by Publicis Ambience, while its media planning and buying duties are with Maxus. The digital duties are assigned to Interactive Avenues, whereas for on-ground activities, it has used regional activation agencies.

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