Market Research on Jewellery Industry

JEWELLERY INDUSTRY

By – Akanksha Chaudhary Barkha tulsyan Deepa Patra Digvijay Singh Parmar Gulsehar sabri

People wants to showcasing a fine elegance and sheen, the range of

fashion jewellery which reflect an amalgamation of many cultures,

traditions and customs.

GLOBAL JEWELLERY INDUSTRY

Jewellery have been a part of most of the cultures of the world at some point of time or other.

From its basic use as currency, it is now used as an instrument to store and display wealth.

In the recent past(last 3-4 decades), this industry has shown an impressive growth world wide.

The current global market for the sector is estimated at around $85bn USD (4 lac crore approx)

Global jewellery sales are expected to grow at 4.6% year-on-year to touch $230 billion in 2015.

 On the other hand, India’s pie in the diamond processing market is set to drop from the current 57% to 49% by 2015 as China ‘s presence will increase.

Diamond jewellery will be the slowest growing segment at a CAGR of 3.3%.

India and China are the emerging centers of jewellery consumption and have steadily increased their share of the pie to 8.3% and 8.9%, respectively

There are nearly 50,000 stores engaged in jewellery retail.

 The industry employs approximately 200,000 individuals.

Annual jewellery store sales run about $27 billion; wholesalers and manufacturers account for an additional $27 billion in sales.

Wal-Mart is the largest retailer

INDIAN JEWELLERY INDUSTRY The gems and jewellery industry in India occupies a

significant position in the Indian economy.

 The market encompasses various kinds of jewels including gold, coloured gemstones, costume jewelleries, platinum and diamonds. 

The sector is expected to register a compound annual growth rate (CAGR) of 13 per cent during 2011- 2013, according to a RNCOS report titled, 'Indian Gems and Jewellery Market Forecast to 2013'.

India has overtaken the US to become the third-largest men's luxury jewellery market in the world in 2011, according to research firm Euromonitor International.

 The country's men's jewellery market is estimated at approximately Rs 954 crore (US$ 193.9 million) in sales.

INDUSTRY STRUCTURE The jewellery industry in India is estimated at Rs

150,000 crore (US$ 30.49 billion) industry of which only 5 per cent is organized.

The global demand for gold in 2011 rose to 4,067.1 tonnes worth an estimated US$ 205.5 billion- World Gold Council (WGC)

One piece of jewellery is sold every three minutes online on eBay India said by Deepa Thomas, Head (Pop Culture), eBay India

Branded jewellery, which accounts for less than 6 per cent of the Rs 1,000 billion (US$ 20.33 billion) jewellery market.

It is  estimated to grow at 40 per cent compound annual growth rate  (CAGR) over the next four years according to industry estimates.

INDUSTRY COMPOSITION

GOLD INDUSTRY DIAMOND INDUSTRY

India appeared a leader in the table of most gold consuming nations with the consumption amounting to about 16,000 tonnes. 

The other key markets include Japan, China, Turkey, Italy, USA and UK.

It is also estimated that about 600 tonnes of gold is used to make jewellery.

Botswana in South Africa has emerged as a major diamond trading hub.

Surat's diamantaires are aiming to dominate globally.

Surat, the world's largest cutting and polishing centre.

 Flow of Zimbabwe diamonds will create over 60,000 jobs in the Surat industry.

The industry is expected to import US$ 1.5 billion worth roughs from Zimbabwe this year.

GOVERNMENT INITIATIVES

India is emerging as a very big consumer market for jewellery and other luxury products and thereby appears as a very attractive opportunity for major brands to establish their presence in the Indian market.

Government's decision to allow foreign direct investment (FDI) of up to 51 per cent in single brand retail stores has attracted a large number of players to the sector.

Gold bars currently attract customs duty at the specific rate of Rs 100 (US$ 2.03) per 10 grams.

Other forms of gold (excluding jewellery) are chargeable to a duty of Rs 250 (US$ 5.08) per 10 grams .

The customs duty on silver (excluding jewellery) will be increased from Rs 500 (US$ 10.16) per kg to Rs 1,000 (US$ 20.32) per kg.

India's Position in Gems and Jewellery Sector•Gems and Jewellery is one of India 's leading foreign exchange earning sectors.•It accounted for 16.7 per cent of India 's total Merchandise Exports.•USA’s import of Gem & Jewellery from India increased by 50.5% in 2010 as compared to 2009.•India Gems & Jewellery exports are expected to grow at a whopping 15 to 20 per cent in FY 2011-2012.•At present India exports 95% of the world’s diamonds.

Advantage India•Gems and Jewellery hub•Rich tradition / heritage of craftsmanship with high level of skills•Low production costs•Effective worldwide distribution network for promotion and marketing.•Diamond polishing capital of the world.•Manufacturing excellence

The retail jewellery industry is comprised of five main segments:

Bridal jewellery (30%)

Fashion jewellery (22%)

Watches (18%)

Precious stones (15%)

Precious metals (15%)

30%

22%18%

15%

15%

% Industry

Bridal JewellaryFashion JewelleryWatchesPrecious StonePrecious Metals

Indian Retail Jewellery Overview

Yesterday Today

Unbranded Branded

Silver & Gold jewellery Gold & Diamond jewellery

Investment Investment + Fashion

Traditional design Fashionable & innovative design

Marriage & festival is peak season Wearability and gifts

Jewellery sold on commodity basis

with labour charges

Jewellery being sold on a per piece

basis

TEN LARGEST JEWELLERY RETAILERS

Wal-Mart Zale Corporation Sterling Jeweller Sears Roebuck and Company Finlay's Fine jewellery J.C. Penney QVC Tiffany and Company Service Merchandise Kmart

MAJOR INDIAN PLAYERS

Major Players:

Vaibhav Gems Ltd.

Gitanjali Gems Ltd

Tata (tanishq)

Malabar Gold and Diamonds

Rajesh Export Limited

Goldiam international Ltd.

Su-raj Diamonds & Jewellery Ltd.

TOP 10 BUYERS OF INDIAN GEMS AND JEWELLERY

United Arab Emirates (U.A.E.) Hong Kong United States of America Belgium Israel Singapore Thailand United Kingdom Japan Australia

SWOT ANALYSIS…

STRENGHTS WEAKNESS

Availability of raw materials specially gems and semi precious stones.

Skilled labour Comparative advantage

in the studded Jewellery. Availability of Technical

Skill through training Institutes.

Large number of Entrepreneurs.

Wide local market for consumption.

-Information Technology. -Easy Access to

International markets. -Recognition in the

Global market.

Illiteracy Cut throat competition. Rudimentary Methods. No use of new

technology. Labour is costly. High rate of utility

charges and tax regulations

Not easy entry in the business

Not utilization of International Markets.

Having no any affiliation with International Gold Organization

Smuggling

OPPORTUNITIES THREAT

Globalization and free trade.

Competition at international level

Access to new marketing information and skill.

New and unexplored markets.

Easy process of affiliation with International organizations.

Free and transparent trade.

Reduced role of State. Quality Standards.

Globalization and free Trade.

Competition with international manufacturing expertise.

Quality standards. Unmatched customer

Demand/ satisfaction Reduced rate of

competencies. losing of international

buyers.

GITANJALI GEMS LTD.BUSINESS OVERVIEW

Established presence

The company is one of India’s largest

integrated diamond and jewellery

companies Established in 1986. Sight holder

status with DTC through a promoter group

company

Sophisticated and scalable diamond and

jewellery manufacturing facilities

Approximately 1,246 retail outlets in India and

143 outlets in the U.S.

Founded as a single company cutting and

polishing diamonds for the jewellery trade at

Surat, Gujarat, in 1966, theGitanjali

Group became, many times over, a pioneer

among major diamond and jewellery houses.

INTRO (CONT…) Gitanjali Gems has reported 28% rise in net profit in

last year. Sales grew 33% to 3,526 crore. Jewellery sales grew

by 35% to 2,029 crore. It had entered into an exclusive tie-up with Rotary

watches to market and distribute the Switzerland based company.

Has the distinction of producing the world’s smallest heart shaped diamond (0.03 carat), and developing some 25 patented facet patterns.

Offers jewellery in diverse styles: traditional, international classic, and casual. For consumers of all age groups, tastes and budgets.

Having won over 50 awards from the Ministry of Commerce, India for outstanding exports of diamond and jewellery, is today over $1000 million multinational group, and a publicly listed entity.

Operations span the globe, all the way from USA, UK, Belgium, Italy and the Middle East to Thailand, South East Asia China, and Japan.

GITANJALI BRANDS

Nakshatra Lucera Calgaro Sangini Rivaaz Stefan Hafner Kashvi

Ezee diamonds Me Jewels Gili Asmi Aakansha Diya

•Ramping up the retail chain

•Expanding stores in India

•Acquisitions including Samuels, Rogers

and Tri-Star

•Plans to make further inorganic growth

in the U.S. & Far-east

•Expanding manufacturing capabilities to

address increasing demand

•Gitanjali Lifestyles to focus on

Manufacture and distribution

Of luxury and lifestyle products

•Developing 200 acres gems & Jewellery

SEZ in Hyderabad

•Plans to develop more SEZs focused on

gems & jewellery across India

•To partner for developing real estate

infrastructure

Expansions Diversification

• Further integration within the jewellery value chain• Higher margins in retail business• Higher value addition

•Leverage its key strengths•Large opportunity for incremental revenue•Diversify business model

TANISHQ Tanishq saga began in the early 1995’s, a

business group of Titan Industries Limited, and is currently the most respected and widely spread business conglomerate.

The name Tanishq has been formed by combining "Ta" (the first two letters of Tata) and "Nishk or Nishkh" (meaning gold coin or necklace in Sankrit).

The first precision engineered watch, Tanishq created with 103 diamonds and pure 18 carat gold

Some earrings are embedded with precious stones or colour gemstones.

Tanishq's 22 karat jewellery sets are overwhelming and could prove to be apt for occasions such as marriage, festivities etc.

TANISHQEar Rings Bangles Pendants

Necklaces Finger ring Chains Sets

Bracelets

SALES PROMOTION STRATEGY

Promise of Purity and

unique experience

Trust Luxury

Superior product

International Shopping

Experience

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RAJESH EXPORT

Rajesh Exports, India's largest gold jewellery manufacturer and exporter by turnover.

The company has 75 retail outlets and plans to add another 25 stores in the current year.

The company is engaged in all the processes from refining gold to selling the gold jewellery, through its retail outlets called Shubh Jewellers.

Margins are close to 5-7% in retail business, compared with 1.5% in gold jewellery exports; this was a major reason for the company to enter retail business.

In the last fiscal year the company's sales were 17,009 crore, 7% of which was the share of the retail business.

DISTRIBUTION

REL manufactures seventy tones of Gold jewellery and other gold products per annum.

The global distribution network of REL spreads across the four continents of North America, Europe, Asia and Australia.

Across these continents REL has setup a wholesale distribution network in the cities of New York, Chicago, Dallas, Toronto, London, Paris, Zurich, Dubai, Sharjah, Muscat, Kuwait, Singapore, Kuala Lumpur and Sydney.

REL has diligently built a domestic distribution network in India spanning the entire country

MALABAR GOLD & DIAMONDS The third largest jewellery retail chain in the world

with an expected $6 billion turnover by 2015. Planning to get into retailing of premium watches like

Rado and Tissot . They have a vast array of modern and designer

collections from India, Singapore, Middle East etc. It has over 60 retail outlets and 10 wholesale

divisions. Malabar Gold and Diamonds outlets display a wide

variety of Gold, Diamond, Pearl and Platinum ornaments, catering to the requirements of its multi-cultural and multi-national customers.

 To ensure utmost levels of quality, Malabar Gold and Diamonds sells ornaments which are certified by international agencies like International Gemological Institute (IGI), Platinum Guild International (PGI), etc.

Items April-October 2011

April-October 2010(Same ports as current year)

% Growth/declin

e over previous Year

  US$ in Million US$ in Million US$

Cut & Pol Diamonds 15195.08 14807.71 2.62

Gold Jewellery-D.T.A 1357.28 1209.24 12.24SEZ/EPZ (included Gold Jewellery & Gold Medallions and coins)

7968.97 5535.29 43.97

Total 9326.25 6744.53 38.28Coloured Gemstones 187.17 158.45 18.13Silver Jewellery 386.92 284.18 36.15Others * 17.52 9.08 92.95Net Exports 25112.94 22003.95 14.13

Exports of Rough Diamonds 995.65 580.44 71.53

Others 51.45 31.96 ---Total Exports 26160.04 22616.35 15.67

TREND IN EXPORT

GEMS AND JEWELLERY EXPORT

Fiscal Year 2010-11- US$ 43139.24 million

Fiscal year 2009-10 -  US$ 29368.72 million

% Growth -  46.89 per cent over the previous year.

2010-2011 2009-20100

1000020000300004000050000

In US $

MAJOR COMPETITORS IN THE GLOBAL MARKET

o Italy:- 1. World’s largest producer of fine jewellery, with

about 8,200 factories annually producing an estimated US$ 6.4 billion worth.

2. Italy’s strength lies in plain gold jewellery.o Hong Kong/China:- 1.Produces a substantial portion of the world

jewellery market· 2. China and Hong Kong are plain gold jewellery.

strong in both gold and studded jeweller

CONT’D

o Thailand:- 1.Major global supplier of quality jewellery

over the last two decades. 2.Thailand’s strength is the domestic market

keeps in gemstone jewellery.o United States:- While a growing number of American

manufacturers export their goods around the world, the sheer size of the domestic market keeps a large portion of the goods at home.

DELHI AND NCR BASED JEWELLARY PRODUCERS

   1.  DAM Jewellery IncPreet Vihar Delhi, Delhi, India (Contact: Mrs Mamta / Mr Ankur}Products/Services : Imitation / artificial / fashion jeweller Jewellery Silverware & silver jewellery2.   A R Gems333177, Beadon Pura, Karol Bagh New Delhi, Delhi, India (Contact: Tanuj Khandelwal}Products/Services : Precious stones Pearls Imitation / artificial / fashion jeweller3.   Teleone Consumers Product Pvt LtdPost Box NO 10555 Pitampura, Delhi, India (Contact: Teleone Team}Products/Services : Jewellery Pearls Precious stones4.   Nirmala Jewellers3811/21-22, Vishnu Mandir Marg, Reghar Pura, Karol Bagh, New Delhi, Delhi, India (Contact: Narayan Chandra Giri}Products/Services : Jewellery Pearls Precious stones Diamonds, Diamond Jewellery5.   Dhruv InternationalPreet Vihar, Delhi, Delhi, India (Contact: Ankoor Mitroo}Products/Services : Imitation / artificial / fashion jeweller Jewellery Silverware & silver jewellery6.   Taran Taaran International ExportsT-581/2, First Floor, Baljeet Nagar, Behind Shadipur Depot New Delhi, Delhi, India (Contact: Gurmeet Singh}Products/Services : Imitation / artificial / fashion jeweller Jewellery Pearls Precious stones Rolling machine for goldsmiths Silverware & silver jewellery7.   Vaishnavi Enterprises2nd Floor, 54, Old Roshan Pura New Delhi, Delhi, India (Contact: Naveen Kumar}Products/Services : Imitation / artificial / fashion jeweller Jewellery Pearls Precious stones