The composition of the Sector:
The two major segments of the sector in India are gold Jewelry and diamonds. Gold jewelry forms around 80 per cent of the Indian jewelry market, with the balance comprising of fabricated studded jewelry that includes diamond as well as gem stone studded jewelry. Gold jewelry and colored gem segments account for about 15 per cent and 5 per cent, respectively of India’s gems and jewelry export in value terms.
The Size of the Sector:
According to industry estimates the gem industry is growing at 2 per cent annually and currently stands at US$ 3.6 billion. India is also a big export hub. The largest cutting and polishing center of diamonds in the world both in terms of quantity and value, the Indian gems and jewelry sector contributed to about 15 percent of India’s total merchandise exports during 2005-06. And in 2006-07, it accounted for 13.7 per cent of the country’s total merchandize exports.
In terms of carat, India’s share in this sector is about 80 per cent of the world market. India produces 60 percent of the world’s polished diamond market by value, 82 per cent by carats and 95 per cent by number of pieces.
According to the Gems and Jewelry Export Promotion Council (GJEPC), the total exports of the industry for the fiscal year 2006-07 were US$ 17,101.77 million as against US$ 16,646.04 million in 2005-06, showing a growth rate of 2.74 per cent over the previous fiscal year, for processing diamonds and other precious stones.
The Indian market for jewelry is estimated at Rs 52,000 crores and the organized segment stands at rs 1,450 crores.
The key Players in this segment:
The segment is dominated by very small family owned retailers, and the total size of the market is difficult to measure. Indian households have traditionally relied on a family jeweler to provide quality assurance. Consumer brand awareness is low. Regional festivals and customs drive demand: most purchase take place at festival periods and to celebrate family rituals such as marriages and births. Organized jewelry retailers are increasingly offering brand solutions to the demand for quality and value, as consumers move away from traditional family retailers.
The Tata Group started Tanishq in the year 1995. Tanishq challenged the age old jeweler’s word. Tata guaranteed purity. It exploded the market with facts about rampant impurity across India and introduced technology backed challenge in a category completely governed by individual trust. Tanishq introduced innovations like Karatmeter, the only non destructive means to check the purity of gold; machine made jewelry, which offers far superior finish and value to the customer and beautiful handcrafted jewelry which is influenced by various jewelry traditions of India.
In the financial year 2006-07, Tanishq achieved retail sales of Rs 732 crore and aims to achieve Rs 1025 crores in the next financial year. Tanishq marked the beginning of multiple stores (84 stores in 61 cities today) compared to the single store norm of the category. Customers can buy, exchange jewelry and avail special services like Tanishq Golden harvest savings schemes in any Tanishq store in the country.
Gili is India’s first branded jewelry product of the parent company – Rs 2,000 crore Gitanjali group and also the first branded jewelry from India available internationally. Gili’s biggest achievement is to have gone the full distance from breaking ground in a market unwilling to accept the basic concept of branded diamond jewelry, to becoming a part of one’s everyday life and a market leader in its category. It brought jewelry to superstores, department stores and other such retail outlets. It dared to offer a certificate authenticating the quality of the gold and the diamonds used in it.. It actually created the maximum retail price policy, which was not prevailing in the business. Gili brought uniformity by offering identical quality, identical designs and identical pricing across the country.