Jewellery in India
Market Report on Jewellery in India
2005 Headlines
·
The recent increases in sales
of jewellery in India are due to the growth of its middle class.
·
The Indian jewellery market
grew at an average annual rate of 18.3% over the review period.
·
India remains the world’s
dominant consumer market for gold jewellery.
·
Despite the continued strong
growth of the real jewellery sub-sector, costume jewellery retained its
dominant market share.
·
More than 70% of jewellery
sales are accounted for by items bought for engagement and wedding ceremonies.
·
Advertising has been the key
force driving the increase in sales of branded jewellery.
Sector Trends
·
Consumers are now switching
their preferences from heavy jewellery to lighter and more fashionable designs.
·
Consumer demand for jewellery
grew by 51% by value in the fourth quarter of 2005 relative to the same quarter
in 2004. For the full year, total consumer demand for jewellery rose by 19% by
weight.
·
India remains the world’s
largest market for gold consumption. Sales of diamond jewellery still account
for only some 10% of the value of the gold market, but this segment is growing
fast.
·
India now ranks number three in
of the world in its consumption of polished diamonds, after the US and Japan.
The government recently responded to the sharp rise in consumer demand by
lifting its ban on imports of polished diamonds, but it now plans to impose an
import duty which is understood to be around 7%.
·
Diamond jewellery sales in
India are expected to grow by 24% during 2005-2010.
·
In 2005, the jewellery market
reached more than Rs1.6 trillion, and this was driven by the rapid rise in the
number of Indians who can afford to buy real jewellery.
·
It is estimated that more than
45 million women in middle-class families can now afford diamond jewellery,
even if they only buy cheaper pieces.
Competitive Landscape
·
One of the main manufacturing
facilities in India is Suashish Diamond’s jewellery factory in Borivali. In
2000, the Mumbai-listed company transformed itself from a business that
concentrated purely on trading in rough diamonds into a diamond polisher,
jewellery manufacturer and branding operation listed on the Mumbai Stock Exchange.
·
Today, Suashish Diamond sells
jewellery under its Ishi brand in more than 180 stores across the country.
India is still home to the world’s largest concentration of the poor, but the
key driver for India’s jewellery market is the fast-growing middle class with
incomes of more than Rs500,000 per year.
·
De Beers remains the dominant
player in the Indian jewellery market, although the number of retailers of
diamond jewellery has more than trebled over the review period. De Beers has
played an important role in raising awareness of diamonds under its Supplier of
Choice policy, by forcing its customers, or site-holders, to become more retail
oriented.
·
For example, the Nakshaktra
brand, which is manufactured and distributed by De Beers’ site-holders, and has
the former Miss World and Bollywood star Aishwarya Rai as its icon, is among
the most popular jewellery brands in the market.
·
The brands have not only
realised strong sales, but also created a “halo impact” for the market and
spawned numerous other brands.
·
Other such brands include
Arisia, aimed at India’s elite; Asmi, for the more independent, modern Indian
woman; and Sangini. While De Beers’ London-based Diamond Trading Company (DTC)
owns these brands, its Indian site-holders provide the channels to market and
promote them.
·
Currently, India has around 40
registered brands of diamond jewellery, which jointly account for 2.5% of the
total market. This remains complex, disorganised and highly fragmented, with
jewellers and other outlets on every corner.
·
A large share of the market is
still supplied by family jewellers, such as Hazurilal in the north of India;
Kirtilal Kalidas, the main player in the south; and TBZ and Ghana Singh in
Mumbai.
·
So called “babus”, or family
artisans, also account for a significant part of the market. These freelancers
are very often housewives who design jewellery for their friends and social
contacts as a second profession.
Sector Outlook
·
The total jewellery market is
expected to increase dramatically over the forecast period at an average annual
growth rate of 14.4%.
·
Omega, famous for its watches,
will also introduce a new line of jewellery.
·
Branded jewellery is set to
reach double-digit growth over the forecast period. Many Indian companies are
also set to promote their branded jewellery in overseas markets.
·
As the jewellery market
expands, the number of regulations and controls will increase. These might be a
cause for concern in relation to procedural and bureaucratic hassles, but if
well implemented they will ensure the emergence of a better-documented market.
·
The state of Maharashtra, of
which Mumbai is the capital, recently imposed a value added tax of 1%. Industry
sources believe that increased competition in the sector is leading to more
sophisticated advertising, and transparency is now becoming a key element in
winning customers.
Rs million
2000 2001 2002 2003 2004 2005
Real jewellery 367,433.5 456,070.1 425,065.5 491,783.6 615,526.7 773,144.4
Costume jewellery 318,076.8 379,223.1 527,996.1 568,094.8 694,104.6 844,312.4
TOTAL 685,510.3 835,293.2 953,061.6 1,059,87 1,309,63 1,617,45
8.4 1.3 6.8
Source: Euromonitor International
% value
2000 2001 2002 2003 2004 2005
Real jewellery 53.6 54.6 44.6 46.4 47.0 47.8
Costume jewellery 46.4 45.4 55.4 53.6 53.0 52.2
TOTAL 100.0 100.0 100.0 100.0 100.0 100.0
Source: Euromonitor International
% value growth
2004-2005 1999-2005 CAGR 1999/2005 Total
Real jewellery 25.6 16.8 153.3
Costume jewellery 21.6 19.8 195.0
TOTAL 23.5 18.3 173.5
Source: Euromonitor International
Rs million
2005 2006 2007 2008 2009 2010
Real jewellery 773,144.4 966,590.7 1,128,10 1,323,38 1,536,14 1,724,64
8.5 5.7 0.8 5.4
Costume jewellery 844,312.4 1,022,27 1,123,60 1,216,70 1,351,34 1,445,65
9.0 5.1 2.1 1.9 8.7
TOTAL 1,617,45 1,988,86 2,251,71 2,540,08 2,887,48 3,170,30
6.8 9.7 3.6 7.8 2.7 4.1
Source: Euromonitor International
% value growth
2005-2010
CAGR 2005/2010
Total
Real jewellery 17.4 123.1
Costume jewellery 11.4 71.2
TOTAL 14.4 96.0
Source: Euromonitor International
