The gems and jewellery market in India is predicted to register a compound annual growth rate (CAGR) of 11% through 2021. Maximum demand for gold is seen coming from South India. This is because of the traditional liking for and importance of gold, brand consciousness, marketing campaigns, and increased disposable income of people in that region. The industry’s growth is attributed to a number of economic, social and cultural changes taking place in the country. The recent demonetisation of high denomination currency notes of Rs 500 and Rs 1000 under the Modi government has severely hit many businesses across the country. However, among the few sectors that are gaining out of this move is the jewellery market. This is because gold and precious stones and metals are seen as investment options by a vast majority of Indians. Post demonetisation until 14 November 2016, India imported gold worth USD 900mn to meet rising customer demands.
Eight factors boosting the gems and jewellery market in India:
1. Growing ecommerce:
Ecommerce is one of the fastest growing sectors in the country; and jewellers were wise enough to realise this and invest in the e-market. Many brick-and-mortar stores have launched their ecommerce websites to attract the modern younger crowd and boost sales.
2. Organised retail channels:
ISO-certification and other credibility-proving documentations have made the jewellery market more organised and the customers more brand-conscious. As a result, the number of buyers/investors is increasing along with the number of trustworthy retailers.
3. Synchronised distribution networks:
Online trade of precious metals and stones requires high levels of security and efficiency. With synchronisation among all levels of the supply chain, this efficiency and security can be achieved, thereby ensuring customer satisfaction. Online jewellers these days are focusing a lot of this segment of the market.
4. Changing consumer lifestyle:
Likes and preferences of Indians are rapidly changing. Demand for contemporary designs and fine jewellery is likely to push the market on the favourable side of the scale. Urbanisation has exposed an average middle-class person to many jewellery showrooms and online stores, thereby creating the feeling of desire and want in him/her.
“The top players in the Indian jewellery market include Malabar, Tanishq, Kalyan, Gitanjali and PC Jewellers.”
5. Advertising and promotion campaigns:
Jewellers in India invest heavily on advertising and promotions. They tap popular celebrities from the filmdom as brand ambassadors. Apart from this, jewellers also provide annual savings and investments schemes to promote themselves among the middle-income group.
6. Fluctuating gold prices:
Gold prices in India are never stable. Gold shopping is largely influenced by speculations. People buy more when they feel that the gold prices have fallen or are likely to increase in the future.
7. Tie-ups with online retailers:
Many retailers, who do not own an ecommerce site, have teamed up with popular e-tailers like Amazon and Flipkart. Through such popular etailing sites, it becomes easier for jewellers to cover a vast buyer-crowd.
The competition among jewellers is intense. This is evident by the fact that so many new jewellery showrooms opened up in the past 5 years alone. Among them are Malabar, Kalyan, Bhima, etc.