The gems and jewellery market in India is home to more than 300,000 players, with the majority being small players. Its market size is about US$ 75 billion as of 2017 and is expected to reach US$ 100 billion by 2025. It also contributes 29 percent to the global jewellery consumption…
The Gems and Jewellery sector plays a significant role in the Indian economy, contributing around 7 percent of the country’s GDP and 15 percent to India’s total merchandise exports. It also employs over 4.64 million workers and is expected to employ 8.23 million by 2022. One of the fastest growing sectors, it is extremely export oriented and labor intensive.
Based on its potential for growth and value addition, the Government of India has declared the Gems and Jewellery sector as a focus area for export promotion. The Government has recently undertaken various measures to promote investments and to upgrade technology and skills to promote ‘Brand India’ in the international market. It has also viewed the sector as a thrust area for export promotion and presently allows 100 percent Foreign Direct Investment (FDI) in the sector through the automatic route.
The Bureau of Indian Standards (BIS) has revised the standard on gold hallmarking in India from January 2018. The gold jewellery hallmark will now carry a BIS mark, purity in carat and fitness as well as the unit’s identification and the jeweler’s identification mark. The move is aimed at ensuring a quality check on gold jewellery.
Gold Monetization Scheme enables individuals, trusts and mutual funds to deposit gold with banks and earn interest on the same in return.
Gold demand in India rose to 760.40 tones between January to December 2018. India’s gems and jewellery exports stood at US$ 4.99 billion between Apr 2019 –May 2019*. During the same period, exports of cut and polished diamonds stood at US$ 3.52 billion, thereby contributing about 76.96 percent of the total gems and jewellery exports in value terms. Exports of gold coins and medallions stood at US$ 686 million and silver jewellery exports stood at US$ 765.98 million between April 2018 – March 2019 *.
The Gems and Jewellery market in India is home to more than 300,000 players, with the majority being small players. Its market size is about US$ 75 billion as of 2017 and is expected to reach US$ 100 billion by 2025. It also contributes 29 percent to the global jewellery consumption.
Currently, the sector is witnessing changes in consumer preferences due to adoption of western lifestyle. Consumers are demanding new designs and varieties in jewellery, and branded jewelers are able to fulfil their changing demands better than the local unorganized players. Moreover, increase in per capita income has led to an increase in sales of jewellery, as jewellery is a status symbol in India.
In the coming years, growth in the sector would be largely contributed by the development of large retailers/brands. Established brands are guiding the organized market and are opening opportunities to grow. Increasing penetration of organized players provides variety in terms of products and designs. Online sales are expected to account for 1-2 percent of the ú ne jewellery segment by 2021-22. Also, the relaxation of restrictions of gold import is likely to provide a fillip to the industry.
The improvement in availability along with the reintroduction of lowcost gold metal loans and likely stabilization of gold prices at lower levels is expected to drive volume growth for jewelers over short to medium term. The demand for jewellery is expected to be significantly supported by the recent positive developments in the industry.
The Rise of Platinum Jewellery
Aside from gold, platinum too is continuously increasing its share in the market by expanding its retail presence across the country including in Tier II & III markets, making India one of the top four countries in the trade globally.
The younger generation – especially while marking significant emotional milestones – often look to purchase platinum jewellery. With increased awareness, platinum today ensures younger walk-ins at showrooms which also helps retailers to create new customers at an early stage. As earlier platinum was mostly known for rings and bands, the demand for platinum pendent sets, bracelets and even platinum men’s jewellery has been growing consistently.
The jewellery industry’s embrace of platinum as an incremental opportunity that attracts a new and modern consumer to their stores while delivering higher revenue per piece has resulted in significant distribution gains in 2018 that are continuing into 2019.
Innovation in the Industry
We are experiencing innovation across all the industry/segments which is breaking all the barriers and giving more to the consumers, be it service, product or value. We often see innovation to certain extent in the jewellery industry but if we hop between multiple stores we will overall see similar products and design. If all the products in the market are essentially the same, then the only thing any customer will care about is price. Once customers only care about price, the market starts bleeding value. This results in retail segment that is struggling to compete with online sellers and non-traditional jewellery sellers. Innovation from manufacturing which reduction in production lead time and cost to design development which creates an impact of every category offered and the customer experience during and after the sale helping create a significant bond with the consumer.