The FINANCIAL — Jewellery manufacturing company Zarapxana sells more than 2,000 wedding rings every year with annual turnover of 5 million GEL, according to Ekaterine Sophia, Director of Zarapxana.
For this Christmas/New Year period the company will offer 15-25% sales on various decorations and products, in particular to corporate clients.
Zarapxana company history dates back to 1939 when several freestanding workshops were unified under one plant known as "Tbilisi Jewellery Plant" located on Leselidze Street. Nearly 200 goldsmiths worked at that plant, producing different specter adornments, arm chains and traditional Georgian vessels. Then the products were centrally distributed (run by Moscow) in other Soviet countries from which demand was always present.
In 2006 the company became private after being state owned, with private investments of 3-4 million GEL, and was rebranded as Zarapxana.
Today Zarapxana operates 7 fashionable shops in Georgia out of which 5 are located in Tbilisi's main streets and 2 of them in the cities of Kutaisi and Batumi respectively, the latter which was opened in August this year. As potential demand is increasing the company is going to add even more branches in the future.
Zarapxana altogether employs 130 people with different qualifications, mainly jewellers and sales staff in the branches.
"Our prices are tailored to any segment of the market, with a minimum price of 100 GEL and a maximum of up to 10,000 GEL," said Sophia. "In addition the most demanded price line is between 500-2,000 GEL for which any customer can get his/her preferred rings/crosses/earings or other adornments."
Q. How is the final product/jewellery made at Zarapxana and could you tell us about the difference in gold standards?
A. Let's start from the point that gold has no nationality – that's 999.9 carats. We buy gold from Austria as well as from local market.
Generally any adornment is of 750 and 585 carats and then silver or other components called ligature are added to make the gold firm, as original 999.9 gold is easily bent which is the reason why ligature is added.
Q. Which type of souvenir is most popular at Zarapxana and why?
A. Beginning from traditional to modern designed products, all are popular. We take samples from old Georgian works which were uncovered centuries ago and are now kept in museums. So we negotiate exclusive rights with the museums to make copies of them and then to sell them, for which there is huge demand. This is a sort of retrospective to the country's past that we are renewing.
Souvenirs are made on demand as clients order their preferred style and material. When mentioning clients we have corporate clients as well as individual ones. Our frequent customers are ministries and companies who order souvenirs with their brands attached to it.
Q. What is Zarapxana's annual turnover and do you expect sales figures' growth in the coming season?
A. Our company's turnover over a year is about 5 million GEL. Out of which 50% is made up from exclusive orders and the other half for different adornments and decorations.
Talking about sales figures, I'd mention the example of the crisis which actually decreased our sales by 30% as people didn't have money to purchase expensive products. Although we tried to diversify our jewellery line during that period, from now on we'll be increasing sales significantly.
As well as caring about our company sales we also provide various sponsorships and participate in the city's fashion weeks, Miss Georgia, image companies and other festivities in addition to museum exhibitions.
Q. What about the price increase of Zarapxana jewellery per annum? Does it correlate with an overall gold price increase?
A. Absolutely, as it's conceived, the price of gold is rising from year to year and never drops. Hence products/souvenirs that are the final product also reflect the price of that increased amount.
So whereas last year the price of gold hit 1,000 USD/ounce, now it stands at 1,400 USD which automatically makes the price of the final product 40% higher than a year ago.
Q. What about competition in the gold market in Georgia and what is your market share?
A. In recent years, many famous brands (Bakara, Roberto Bravo, Tamar Diamond, etc) have entered Georgia and offer quite competitive jewellery as well. There are also many small retailers on the market.
Zarapxana has a market share of 6% in Georgia. The thing is that the majority of about 70% of the gold market is made up by the gold market on central train station of Tbilisi. However the quality of gold there is a bit low, meaning there are frequently cases of sellers lying to customers in terms of the carat of gold being sold.
Q. Do you see any prospect of exporting Zarapxana gold to foreign markets?
A. In today's world to gain a competitive advantage you should either have low cost of inputs or low labour costs. The latter has been the major reason why we've not yet exported, as Georgian labour compared to for example Chinese/Indian labour is expensive. But we're looking forward to opening a sales spot in Azerbaijan next year, in Baku.
