Like diamonds, gold jewellery is also considered as every woman’s best friend. Research reports authenticate that India is the largest consumer of gold, accounting for more than 20% of the total world consumption. As gold jewellery forms around 80% of th
The gems and jewellery sector is surely the most rapidly growing sectors in India. A big thanks goes to the big fat Indian weddings and auspicious festivals when consumers splurge heavily on jewellery despite considering the price and value of gold per gram. In fact, consumers are becoming more quality conscious and are in favour of buying jewellery from branded or organised brands that offer wide variety of designs in jewellery to pick from; providing certificate for quality and authenticity of jewellery and a proficient customer service. This is the reason why branded jewellery stores are opening up in every corner of the country and offering opportunity to franchisees.
A glittering opportunity
Jewellery market in India is largely dominated by family-owned jewelers. In fact, most of the market is a mix of unorganised and organised brands. As the middle class income is growing by leaps and bounds, consumers are no longer price sensitive. They believe in investing on gold; always looking out for wide variety in designs and interested in buying hallmark and certified jewellery. With the changing mindset of Indian consumers; more organised brands are entering the jewellery sector to offer the best bet to consumers. Looking at the transforming retail formats marking a strong foothold across the market, the brands in this segment are not only running their physical stores within malls and high streets but, are also tapping e-commerce model for a wider retail footprint. Now one can buy jewellery in just a single click. Major brands that have grown immensely via franchising model are Gitanjali Jewels Ltd and Tata Group's Jewellery brand Tanishq. Gold Plus, the later addition, focusses on the preferences of semi-urban and rural India. Completing the jewellery portfolio is Zoya, the latest retail chain in the luxury segment. Currently, Tata Group operates over 173 Tanishq boutiques of which, 46 are company-owned and 126 are franchise stores. So far, the Tanishq retail chain has extended its reach to 97 cities of India.
Another brand SHUBH Jewelers, a revolutionary mission initiated by Rajesh Exports Limited (REL), is seeking franchisees too. Seeing the evolving market, Tribhovandas Bhimji Zaveri Limited (TBZ), a trusted jewellery retailer, is now inviting franchisees to be a part of its jewellery retailing business. According to a recent press release, through the TBZ franchising opportunity, entrepreneurs can open TBZ-The Original stores across India. The brand intends to open franchisees run outlets in Indian cities where it has not penetrated this point of time through its exclusive brand outlets (EBOs). At present, TBZ Ltd has 28 EBOs stores in 22 cities across 10 states.
Opportunity galore for high net worth individuals
For high net worth investors or franchisees, the market which has always been on top of their minds is the jewellery industry. Being the favorable investment option for franchise investors, jewellery market tends to assure more returns. Commenting about where jewellery industry stands currently in India, Shilpa Gupta, Head Retail, FMCG & Gems & Jewellery Committee, FICCI, says: “India's gems and jewellery industry had a market size of Rs 251,000 crore (US$ 40.58 billion) in 2013, and is expected to reach Rs 500,000-530,000 crore (US$ 81.61-86.51 billion) by 2018. Organised jewellery industry is approx 35% of the total jewellery market in India. The growth rate of organised jewellery industry in India is approx 25%.”
Looking at the thriving competition in the market, many brands are hopping on franchising model to have a nationwide retail footprint. Adding positively about opening replicable stores via franchise model and enlightening the investors, Shilpa says: “With the growth of branded jewellery retail sector, franchise opportunities in jewellery retail sector is also mounting up with the participation of major companies. Indian jewellery industry is a fragmented industry with over a million jewellery vendors. It would be very difficult for someone without in-depth knowledge of the industry and business to get into and therefore taking up a franchise of a reputed brand is a viable way to start a jewellery store. Diamond jewellery store remains one of the most preferred franchised concepts followed by gold and silver. The ratio of the retail composition of company-owned stores and franchised outlets stands at 30:70 clearly spelling the success of franchising in the segment.”
Adding about the industry, Shrikant Zaveri, Chairman and Managing Director, TBZ Ltd, says: “TBZ's franchising opportunity is a unique opportunity for entrepreneurs to capitalize on the various growth possibilities in the Indian gems and jewellery retailing business. The prospects of the gems and jewellery sector have become quite rosy after been included in the Prime Minister's 'Make in India' initiative. Recent Government policies such as the elimination of the 80:20 rule for gold imports are also conducive to growth and progress of the sector. These positive macro-economic trends have inspired us to invite more members to the TBZ-The Original family to partner with us in our expansion journey.”
Jewellery is the only industry in the retail sector which has the major share in the wedding market and in the seasons, jewellery is bought by consumers irrespective of its cost per gram. Currently, India's G&J industry is highly unorganised and fragmented with 96 per cent of the total players being family-owned businesses. Gold has the maximum share in India's Jewellery industry. Diamond Jewellery is mainly exported and majority gold jewellery is meant for domestic consumption. “The industry provides direct employment to roughly 2.5 million people and has the potential to generate employment of 0.71.5 million over the next five years,” concludes Shilpa Gupta.
With the emergence of large manufacturing facilities with strong designing strengths and organised distribution network, the India's Jewellery industry has begun to consolidate. In fact, the 'Make in India initiative' by Prime Minister Narendra Modi, highlighted that jewellery is one of the prime sectors which can give fillip to Indian manufacturing and can create better employment opportunities within the sector which will further boost the country's economy.
Exports from the gems and jewellery industry could reach US$ 58 billion by 2015, according to a joint report by Technopak and an industry body. The report anticipates that the value of the domestic market for gems and jewellery will be around US$ 35-40 billion by 2015.
Organised chains offering certificates for jewellery authenticity and quality, loyalty schemes and discounts to increase store footfalls.
Report by Gems and Jewellery Export promotion Council (GJEPC), India exports 95% of the world’s diamonds. The industry is projected to generate up to US$ 35 billion of revenue from exports by 2015.
The ratio of the retail composition of company-owned stores and franchised outlets stands at 30:70 clearly spelling the success of franchising in the segment.