The Indian gems and jewellery industry is well established and recognised world over for its craftsmanship and variety. It is labour intensive and involves not just workmanship but a lot of patience and dedication to the art of jewellery making. The industry employs about 4.6 million persons directly and employment is expected to double in the next 10 years.
India is among the fastest gold-jewellery demand growth centres in the world along with Hong Kong, China, Egypt, Thailand, Turkey, Indonesia and the Middle East. As is well known, India is the also the largest consumer of gold in the world. Today India and China, together, account for about 60 per cent of the global gold jewellery demand and 50 per cent for bars and coins. India is estimated to hold over 18,000 tonnes of gold privately, accounting for nearly 12-13 per cent of the world‟s cumulative „above ground‟ gold stocks.
There are an estimated 350,000 jewellery retail stores in India. Of these, only around 5 per cent fall under the organised sector and the rest are part of a highly fragmented unorganised sector. Organised retailing is growing rapidly by capitalising on its „variety‟, „reliability‟ and „quality‟ emphasis. These retail chains are driving the hallmarking trend. Key trends in the jewellery industry are: changing taste and preferences of customers; seasonal sales; new retail formats and preference towards branded jewellery.
The advent of jewellery retail chains and franchises has provided greater market access to the traditional goldsmiths and the new-age jewellery manufacturers. These retail chains have not only provided buyers with to access many different varieties of products, but also invested in promoting Indian jewellery in domestic and overseas markets, thereby, benefitting the industry as a whole. They have also enhanced the trust factor by adhering to prescribed standards.
The Indian buyer is demanding. Today, she is willing to experiment with the new designs and demands variety. She no more has restricted preference for traditional or familiar regional styles, but is willing to wear those from other regions and cultures. Moreover, high prices of precious metal or gemstones have not diminished her appetite for buying, but made her to demand lighter weight jewellery of lower carats than the previous preference for 22K jewellery or precious stones only. These changes in preferences along with greater standardisation have driven the jewellers to stock more variety and attract buyers of different age groups with separate types of products and discount schemes. Web-based sale has also taken off well, driven by the new generation buyer who is typically a working woman with little time to spend on shopping in the jewellery market.
Until the 1990s, jewellery retailing was mainly under local single-shop jewellers who had dedicated customers with their specific preferences and loyalties. Today, there are different types of retail formats such as single-store, chain of stores, shop-in-shop, duty free, souks or theme malls, etc.
Many large franchised stores operate with dedicated contractors who provide variety according to market demand and their speciality. Chain stores mostly buy from manufacturers across the country to provide variety across their stores as per customer‟s profile. They also help develop markets for new products through large scale advertising and jewellery fares.
Product merchandising is a critical part of retailing, usually involving the senior management of the retail store. They identify market trends and accordingly determine jewellery inventory and display patterns in their store(s). Inventory management, and support functions such as cash transactions, labelling, assessment of returned jewellery and gold smithy are the typical functions in a jewellery retail store. Selling being the main objective of the stores, selling is a key function.