Based on its potential for growth and value addition, the Government of India has declared the Gems and Jewellery sector as a focus area for export promotion. The Government has recently undertaken various measures to promote investments and to upgrade technology and skills to promote ‘Brand India’ in the international market.
– By Dwiti Bhuwalka, Founder Pretios
Jewellery has been a significant adornment for Indian women since ages and has always been a woman’s best friend. With the revolution in the jewellery and fashion industry, the urban women have also evolved, keeping abreast with the latest trends in jewellery and fashion.The Gems and Jewellery sector plays a very important role in the Indian economy, contributing around 7 per cent of the country’s GDP and 15 per cent to India’s total merchandise exports. It also employs over 4.64 million workers and is expected to employ 8.23 million by 2022.This is one of the fastest growing sectors; it is extremely export-oriented and labour- intensive.
Based on its potential for growth and value addition, the Government of India has declared the Gems and Jewellery sector as a focus area for export promotion. The Government has recently undertaken various measures to promote investments and to upgrade technology and skills to promote ‘Brand India’ in the international market. However, the jewellery industry is still about ten times smaller to the apparel industry in terms of annual sales.
Costume jewellery is made of semi-precious metals and gems. The material used for these jewelleries include metals such as silver, aluminium and brass and semi-precious stones, beads, terracotta, leather and pearl. As more retailers in the jewellery segment realize the huge opportunity in the e-commerce sector, the market is set to become increasingly competitive. Consumer expectations are rising, and they are not just looking for the best options but also a great shopping experience. Retailers who wish to stay competitive in this dynamic market will need to step up their game. Online channels, which are still new trend, offer new opportunity for the market. Estimates indicate a bright future for online jewellery sales what with the industry implementing innovative technology to meet consumer demands. The growth will however be commensurated with consumer preferences as they become more comfortable in buying emotionally charged products online; jewellery being a major category.
The latest trends for summer months are something which is really light in weight. One can opt for designs and jewellery items like bracelets, trinkets, ear studs, chain neck pieces etc.
Raw material cost: One of the key challenges for the costume jewelry industry includes a sensitive market of fashion jewellery and rising raw material cost. Costume jewellery segment has unorganized supply chain of the raw materials which acts as a constraint as it, sometimes, leads to steep hike in the prices of raw materials.
Converting visitors to buyers: jewellery lacks homogeneity, buyer needs touch and feel for the product, wants to try the look and suitability of the design.
Conversion of High Ticket purchase – Demand for consumption and investment is affected by several challenges. Online retailer largely manages to sell impulse category i.e products less than 20K, where the buyer doesn’t look for investment and doesn’t mind in spending without much thought.
Delivery waiting time backfires – Online model is about efficiently managing the inventory, which results in made-to-order concept, wherein jewelry manufacturing takes place after the order is confirmed by the customer online and delivery time is about 7–15 days, which in jewelry business is not appreciated
In the coming years, growth in Gems and Jewellery sector would be largely contributed by the development of large retailers/brands. Established brands are guiding the organised market and are opening opportunities to grow. Increasing penetration of organised players provides variety in terms of products and designs. Online sales are expected to account for 1-2 per cent of the fine jewellery segment by 2021-22. Also, the relaxation of restrictions of gold import is likely to provide a fillip to the industry. The improvement in availability along with the reintroduction of low cost gold metal loans and likely stabilisation of gold prices at lower levels is expected to drive volume growth for jewellers over short to medium term. The demand for jewellery is expected to be significantly supported by the recent positive developments in the industry.
Image courtesy: Pretios