With the Indian gems and jewellery industry expected to grow to five lakh crore to 5.30 lakh crore by 2018 from Rs 2.51 lakh crore market size in 2013, the sector is set to glitter more. Read on to know more...
As per India Ratings & Research, a Fitch group company, the prices of gold in 2014/15 are likely to hover in the range of Rs 25,500 to Rs 27,500 per 10 gram. The prices of the precious yellow metal came down to Rs 27,000 per 10 gm in May from a peak of Rs 32,460 per 10 gm in November 2012. India, the world's second largest importer of gold after China, is set to see a boom with the Reserve Bank of India easing its import in May. The RBI has allowed the import of the precious metal by large private gold importers with a caveat sending cheers in the industry.
Way to organised trade
Most of the jewellery manufacturers and retailers run as family businesses with the MSMEs dominating the industry. For the last few years, the domestic market has seen increase in the share of the organised sector with several large and regional players making a foray in the business mostly via franchise route. To capture the fast growing pulse of this growing industry, almost every retail brand is expanding via the franchise model, Tanishq, the leading jewellery brand is also planning to add new outlets.
Crystal jewellery and accessories maker Swarovski, which presently has 41 outlets in India, is also planning to invest 10 million euros over the next five years in India thereby doubling its retail network here. Francis Belin, Senior Vice-President for Swarovski Consumer Goods Business in Asia Pacific region says: “Most part of the investment will go into opening exclusive outlets.”
Why take the organized route? Reema Jain, Founder and CEO of Heritage Jewellers says: “Unorganized players have started expanding which is a wise thing to do. That is the only way forward. They know the customer at the ground level and make a very good combination of a local jewellers and a branded one. They actually know the pulse of the customer,”
From family run jewellers to established franchisees
With growing organised market in the industry and growing demand of people for branded jewellery, more and more family run jewellers are taking the franchise of the established brands. The trend is fast picking up and is paying the dividends to those linked with the venture.
Commenting on this, Viral Shah, CEO, Bracialeto, says: “We have experienced the same as we have not inherited any store. We plan to have kiosks at high-end malls to ensure a uniform feel of the brand.”
Reema Jain further adds: “Family run jewellers taking franchise of a brand is not a bad idea if the jewellers have a problem with funds. Otherwise, it would be better for him to have shop-in-shop brands.” For Dharmisha Gokani, Director, Meera Jewelz , there are more plus points of franchising than negatives. She says: “For the family run jewellers they need to look after inventory, dead stocks, marketing, sourcing and training staff. By taking our franchise, all inventories, sourcing issues are taken care by us and there will be no dead inventory as every few months we change the non-moving stocks from the store. Meera Jewelz tracks the moving item and makes sure the same is provided to that particular franchisee. Meera Jewelz takes care of marketing activities by local media and social media.”
High street and malls are the hot places
The Indian retail industry has seen exceptional growth with retail developments in major cities and metros. Jewellers are aggressively targeting high street and malls for their business expansion.
“High street is better option as customers plan a jewellery purchase and not buy it just by the way. They already know where to buy from,” feels Reema Jain. She further adds that tier-II cities are the next destination for cost of operations is much lower. “For our brand, we prefer to sell the products at the various malls in cities across India. Bracialeto follows the ‘make your own jewellery’ concept which is very interactive. Hence, for such a concept the mall is an ideal destination as it attracts family and friends who come together to enjoy and indulge in various activities,” tells Viral Shah.
The jewellery industry is only going to shine more like always. With organised sector making rapid moves and the industry expected to touch new heights in terms of growth, going for franchise model is the in-thing.