A Study On Branded Jewellery

Jewellery is one of the most important and fast growing sectors in the Indian economy. India is the largest consumer of gold and is the biggest centre for processing diamonds in the world. The sector is one of the largest export earners for India.

Gold jewellery and diamonds are two major segments of the sector in India. 80 per cent of the Indian jewellery market in Gold jewellery forms. The gold jewellery manufactured in India is consumed in the domestic market. India has very good domestic market for jewellery. In diamonds, however, a major portion of rough, uncut diamonds processed in India is exported, either in the form of polished diamonds or finished diamond jewellery. India has set up more than 3,000 offices worldwide for promotion and marketing of Indian diamonds. The Indian jewellery industry is competes in the world market due to the single reason, which is its low cost of production & availability of skilled labour.

“India is the world’s largest trading center for gold”.

Branded Jewellery

India is the world’s largest consumer of gold and third largest consumer of diamond jewellery after Japan and USA. The jewellery market in India is estimated to be around US$ 15 billion, second only to the US (US$ 40 billion) and is followed by China (US$ 11 billion). The jewellery market in India is second to the fast moving consumer goods market. Globally, branded jewellery accounts for only 8% of the total market of US$ 70 billion, while in India of the total jewellery market, the branded segment accounts for a minuscule 2%. Further, it is very fragmented and dominated by the unorganized sector.

Branded jewellery has been a relatively recent phenomenon in India. Tanishq and Gili were among the earliest jewellery brands in India. There has also been a shift in consumer preference towards diamond jewellery due to the extensive positioning of diamond jewellery as both affordable and contemporary.

Another key development in branded jewellery has been the introduction of value added services such as the certification of gold and diamonds, and life time return and buy-back schemes. These trade practices have resulted in the perception of superior quality associated with branded jewellery

The trend so far …

Branded jewellery has been a relatively recent phenomenon in India and in other developing countries. In India most jewellery is retailed in the unorganized sector. In India there are more than 2.5 million jewellers. But if we talk about jewellery brands in India, these brands can be counted on one’s fingers. As mentioned earlier, branded jewellery is known as organized jewellery.

As per survey done by some big companies branded jewellery accounts for merely 2% to 3% of the total jewellery retail market in India, which underlines the fact that there is very good scope for branded jewellery. The jewellery sector in India has grown at a CAGR of 9% in the past two years as against that organized jewellery sector has showcased over 30% CAGR during the same period. This is mainly on account of jewellery retailing in India undergoing a slow transformation from a largely unorganized sector to a more organized one.

The majority of traditional jewellers cater to the local population and most purchases are made on trust and on the basis of the reputation of the local jewellers. However, with the growth in retail sector and introduction of new formats such as boutiques and supermarkets etc, Indian customers are displaying growing preference for quality, designs and branding.

Major domestic and international brands

Tanishq –

Tanishq is India’s largest and fastest growing jewellery brand in India. Started in 1995, Tanishq is the jewellery business group of Titan Industries Ltd, promoted by the TATA group. It had retail sales of US $35.5 million last year and has 95 stores in 61 cities in India.

Gili:-

In 1994, Gili Jewellery was established as a distinct brand by Gitanjali Jewels, soon after the abolition of the Gold Control Act by the Indian government. Gili offered a wide range of 18-carat plain gold and diamond-studded jewellery.

Oyzterbay:-

Oyzterbay which began operations in March 2001 seeks to build a national brand in the jewellery industry in India and aspires to be the largest branded jewellery company in the country with a chain of 100 stores and several hundred-distribution points.

Trend smith:-

Mumbai-based Tribhovandas Bhimji Zaveri (TBZ), which had been in the jewellery business since 1864, saw tremendous scope in the branded segment and opened its new concept store ‘Trend smith’ in Mumbai in December 2001.

Intergold:-

Part of the Rosyblue Group, it is the world’s largest diamond manufacturing company with a presence across 15 countries headquartered in New York. Inter Gold is the largest diamond retailer in India. With 24 exclusive showrooms across the country, the company is focusing on making India the launch pad for its high-end jewellery store.

Future of the Indian Jewellery Market:

• India’s growing importance in the global jewellery market is only expected to increase in the future with total estimated jewellery sales of US$ 21billion by 2010 and US$ 37 billion by 2015.

• Diamond jewellery consumption in India is also estimated to jump by 78 per cent in 2010.

• Branded jewellery is likely to be the fastest-growing segment in domestic sales. The sector is expected to grow at 40 percent annually to touch US$ 2.2 billion by 2010.

• Indian diamond jewellery industry is the third largest consumer of polished diamonds after USA and Japan. Diamond jewellery consumption is likely to jump to nearly 80 per cent in 2010 and over 95 per cent between 2010 and 2015.

• Various government incentives coupled with private sector initiatives are projected to drive the sales of Indian gems and jewellery sector at a CAGR of around 14% from 2007-08 to 2010-11.

• The organized gems and jewellery sector is anticipated to grow rapidly in near future, accounting for nearly 8% of the total gems and jewellery market by 2009-10. Various factors like cheap labor cost, better designs and manufacturing practices, are making the country an attractive destination for cutting and polishing of diamonds.

BRANDED JEWELLERY MARKET IN INDIA

World Market

The Indian diamond industry has acquired leadership position in cutting and polishing of rough diamonds. India has the world’s largest cutting and polishing industry, employing around 800,000people (constituting 94 per cent of global workers) with more than 500 hi-tech laser machines. The industry is well supported By government policies and the banking sector – around 50banks provide nearly US$ 3 billion credit to Indian diamond industry. India is expected to have its diamond bourse functioning at Mumbai in 2006.

10-year average annual demand for gold (tonnes) (1996-2005)

The Target Group

Men buy products while women choose brands, observed by models, designer and CEO of a billion dollar company, Kathy Ireland. Hence the Solitaire – TNS Survey across Mumbai, New Delhi and Bangalore was targetted solely at women.

While the sample size was small, 650+, the fact that the target group was covered in and around shopping malls, banks, corporate areas and commercial zones, made the sample more relevant to the objectives. The survey was conducted through personal interviews over a period of 20 days.

From the above survey it is found that, working women contribute a greater impact on branded jewellery. It is found that 42.5 per cent of working women has very good shopping habits, thus has a greater impact on branded jewellery. The rest of the target group, though non-working, came from a similar background with similar purchasing power. Survey was conducted on age group 18-65 yr.

WOMEN ARE BUYING JEWELLERY

The Indian women’s attraction to gold, through the ages, has remained as constant as the constellations. It is good news for the jewellery industry. The other news is that women are looking at other jewellery as well. Not surprising, considering that the average urban Indian women are being bombarded by mesmerizing messages that associate her accomplishments with brand possessions. So what we have are quite a number of brands more than a hundred if you include established store brands in different cities, competing for that elusive mind space.

The Survey

As mentioned in previous survey we found that “Men buy products while women choose brands”. So we decided to survey for women only for branded jewellery.

Sample size of survey was very small, 40+, the fact that the target group was covered in and around middle upper class women and high status women, made the sample more relevant to the objectives. But most of the women in survey were belong to high status family. The survey was conducted through personal interviews over a period of 7 days. Survey was conducted on age group 25-40 yr.

1) Do you like branded jewellery?

Yes No Can’t Say.

ANALYSIS:-

From above column chart it is clear that a majority of women like branded jewellery. 37.5% of women in our survey like branded jewellery. And it is very impressive percentage. 50% of women don’t like branded jewellery. And only 12.5% women are not sure about whether they like branded jewellery or not.

2) How important is jewellery in your life?

Extremely Imp. Very Imp. Some What Imp. Not Imp.

ANALYSIS:-

From the above we clear that 12.5% of women think that jewellery is extremely imp. in the life. The rich women (30%) that the jewellery is very imp. in their life because of the high status. But the majority of middle women (37.5%) think that somewhat imp. in their life. The poor women are not think about buy jewellery.

3) On what occasions do you buy jewellery?

Festivals B’day/Wedding Bonus/Extra money

Traditional Gifts.

ANALYSIS:-

From the above we clear that a majority of women buy jewellery in the occasion of birthday/wedding. 57.5% women buy jewellery on birthday or wedding. On the other occasions like festivals, 20%women buy jewellery. 15% women buy jewellery for those times when they get some extra money or bonus. Some women (7.5%) buy jewellery as traditional gifts like karva-chauth.

4) You buy jewellery in influence of your friends?

Yes No Can’t Say

ANALYSIS:-

From the above we clear that a Majority of the women believe that they do not buy jewellery in influence of friends. And lesser number of women is influenced by their friends. So the force which drives women to buy branded jewellery is other than influence of friends.

5) Do you think branded jewellery is much better that other jewellery?

Yes No Can’t Say.

ANALYSIS:-

From the above we can say that more than 37.5% of women believe that branded jewellery is better than any other jewellery. But majority (50%) of women says no. They still believe on their local merchants. And remaining is in toggled stage.

6) Which brand of jewellery you like the most?

Tanishq Gili Local Brand Any Other (Specify).

ANALYSIS:

As we know that Tanishq is very popular brand of TATA in jewellery. And from the above we clear too. More than 44% of women buy Tanishq brand and remaining (54%) of women look for other brands.

7) You like branded jewellery because of …

Better Quality Show High Status Any Other (Specify).

ANALYSIS:-

From the above we clear that main attraction toward branded the jewellery is due to the better quality and high status i.e. more than 90% of women buy branded jewellery due to their high status and better quality.

8) Do you think branded jewellery affects your buying decisions?

Strongly agree Agree Disagree Strongly disagree.

ANALYSIS:-

From the above we clear that there are large numbers of women (approx. 62.5%) are whose buying decision is strongly affected by the brand name of jewellery. And fewer numbers of women (approx. 37.5%) are not affected by the brand name.

9) How would you rate the branded jewellery?

Excellent Good Fair Poor.

ANALYSIS:-

For the above we clear that women rate branded jewellery as excellent i.e. 20%. The majority of women (40%) that good rate of branded jewellery. And very less %age (approx. 15%) of women rate branded jewellery as poor.

10) How did you know about the brands?

News Paper T.V. Advertisement Friends & Family

ANALYSIS:-

From the above table clear that, T.V. and New Paper is the major resources of advertisement of brands for the women i.e. 45% and 35% respectively. It is natural, because they spend a lot of time at home and these resources are easily available at home.

Views towards the branded jewellery

In my opinion branded jewellery can spread in the market. Because currently high status people and upper middle class women go for branded jewellery and the percentage of these people is very less. Other people are not able to afford the range of branded jewellery. So, from this data I can say that there is still a large scope for the branded jewellery in the market. It is just the child stage of the branded jewellery. Still lot steps are required to go for matured state.

SUGGESTIONS

In my opinion, no doubt branded jewellery is symbol of good quality and faith. But still branded jewellery has large scope to grow. It is found that only 8% of world market of jewellery is occupied by branded jewellery and in India it is just 2%. Now the main reasons for this low percentage are:

i) Low percentage of high status families.

ii) High price of branded jewellery.

iii) Lack of knowledge about branded jewellery.

iv) Advertisement failure of branded jewellery.

v) Lack of show room of branded jewellery.

So, if we focus about above mentioned problems and try to overcome these markets of branded jewellery can raise tremendously. Currently branded Jewellery is limited to only high status families. As we know that worlds 40% of the population belong to middle class. So if branded jewellery target this huge population then its size can affected a lot. We should make a lot of advertisement, So that women can aware of the branded jewellery. We should also cut labor cost on the branded jewellery. So that branded jewellery can be affordable to middle class families as well, currently branded jewellery can be purchased from malls in metropolitan cities but it should be shifted to show rooms in small cities.

So, if we work upon above mentioned challenges. Then size of branded jewellery market can be affected to a lot.

Factors driving growth of the jewellery market…

• Storehouse value to fashion accessory: The entire way that people buy jewellery is changing, and younger women – who are buying for fashion, rather than investment – are driving the change. In India till three to four years back, jewellery purchases were made on few traditional occasions such as Diwali, Aksahy Tritiya etc. However, with the increase in the number of working women and changing lifestyle, jewellery is gaining importance as a fashion accessory.

• Government initiatives: The Government of India has taken initiatives to stimulate the growth of the jewellery industry given the industry’s critical importance in Indian exports. Jewellery Parks have been set up to promote investments in the sector. Cutting and polishing of jewellery is treated as manufacturing for the purposes of exemption under Section 10A of the Income Tax Act. It has also made the import of polished diamonds completely duty free. All this has fuelled growth within the sector.

• Value added services: The introduction of value added services such as the certification of gold and diamonds, and lifetime return and buy-back scheme has further influenced the growth of the organized

jewellery segment. Such trade practices have resulted in the perception of superior quality associated with branded jewellery.

• Emerging trends: On account of increasing disposal incomes, there has been a shift in demand from mere traditional handcrafted jewellery to branded machine made jewellery. Earlier jewellery was considered as an investment, however, now it is looked upon as a fashion accessory or an everyday wear product. The occasions of purchases have also witnessed a change. For instance, previously purchases were made during marriage or festival seasons, while nowadays wear ability and gifting dimensions have led to demand throughout the year. Traditional designs have been replaced by fashionable and lightweight jewellery.

CONCLUSION:-

India is the world’s third largest trading center for gold. Jewellery is one of the most important and fast growing sector’s in the Indian economy. As per survey done by some big companies, branded jewellery accounts for merely 2% to 3% of the total jewellery retail market in India, which underlines the fact that there is very good scope for branded jewellery. From the above survey it is found that, working women contribute a greater impact on branded jewellery. currently high status and upper middle class women go for branded jewellery and the percentage of these people is very less. According to my survey on branded Jewellery I can say that the company deals in branded jewellery have less scope in India as well as all over the world also to expend their business. In present days branded jewellery became the states simble.

REFERENCES:-

• http://www.equitymaster.com/detail.asp?date=9/21/2007&story=2

• http://www.gjepc.org/solitaire/magazines/Aug05_Sep05/aug05_sep05.aspx?inclpage=Survey&section_id=3

• http://www.gjepc.org/solitaire/magazines/Aug05_Sep05/aug05_sep05.aspx?inclpage=Survey&section_id=3

• http://www.ukibc.com/content.php?contentid=31&sectionid=6

Book:- Marketing Management By Philip Kotler Twelfth Edition (Page no. 85-115)