gems and jewellery industry
TRANSCRIPT
Industrial Projecton
Gems & Jewellery
By,Hari| Prapti |Ramya| Vivek
2500-1800 AD Indus
Valley Jewellery
5th-12th Century
Jewellery on
Medieval Ages
13th -17th Jewellery
Renaissance Jewellery
18th- 19th Century
Victorian Jewellery
Evolution
19th- 20th Century
Art Nouveau
1970s to Present
Contemporary Jewellery
Evolution
About Indian Jewellery Market
• Indian gems and jewellery industry had a market size of US$ 41.61 billion in 2013
• Indian gems & jewellery market is highly fragmented with 94% of players operating in the unorganized sector
• India is the second largest consumer of gold in the world with 975 tonnes in 2013
• FDI inflow for the period Apr 2000-June 2014 is USD 356 million
Source: FICCI, WGC, IBEF, DIPP
Organized Retail Market Split
Food and Grocery2%
Apparel33%
Mobile and Telecom
11%Food Service
7%
Jewellery6%
Consumer Electronics
8%
Footwear4%
others24%
Home and Interior5%
Source: ONICRA
India’s Position in Global Level• India and China are
the two largest gold consumers in the world followed by the Middle Eastern region
• The Gems and Jewellery industry of India contributes nearly 55% of the world’s net exports of cut and polished diamonds in valueSource: WGC
Significance of Jewellery in Indian
Tradition
• Jewellery and Indian women are always linked inherently. During wedding as well as numerous other occasions, a woman is gifted jewellery by her parents
Security
• Security in times of contingency and also serves the purpose of financial need, which can be depended upon
Celebration
• Jewellery are gifted in different phases of life such as, birth and marriage. Ornaments like mangalsutraquintessential for married Indian women
About Gold• Gold has formed the backbone of global
economic activities as a reserve currency over the last several centuries.
• Currently a little over 2,600 tons of gold is mined per annum
• Gold can be alloyed with different metals to give different colours, such as white, yellow, pink, black, purple and green
• South Africa is the largest producer of gold in the world
About Diamond
• Diamonds are pure carbon—earth's most common element and the same material as the graphite in a common lead pencil—formed into perfect crystal patterns
• They were formed eons ago under incredible heat and pressure deep in the earth
• The weight of a diamond is measured in carats; a carat is a fifth of a gram
• The diamonds are purchased based on the Cut, Color, Clarity and Carat Weight
Types of JewelleryJe
wel
lery
Mangtika
Necklace
Ear Rings
Nose Rings
Bangles
Arm Band
Rings
Waist Band
Anklet & Toe Rings
Jewel’s Classification
Gems and Jewellery
Gem Stones
Pearl
Emerald
Topaz
Blue Saphirre
Coral
Ruby
Diamond
Cat's Eye
Yellow Sapphire
Jewellery and Precious Metals
GoldPlatinumSilver
Consumption Pattern
Region Preference
Business Model of Jewellers
Bu
sin
ess
Mo
del Hedging against future
Price-rise of Gold
Charging Pure Gold price for low purity Gold
Making Charges of Jewellery
Re Purchase of Old Jewellery
BIS –Hallmark in Gold
Mark Gold Purity (Carat)Level
958 23 carat
916 22 carat
875 21 carat
750 18 carat
585 14 carat
375 9 carat
Strength
1.About one million craftsmen are associated with this industry. Their skills can be utilized for designing and making modern Jewellery
2.Supportive government on industrial/ EXIM policy
3. Gold associated with Indian culture
Weakness
1. Small firms lacking technological and export information
2. As major raw material requirements need to be imported, companies normally stock huge quantities of inventory resulting in high inventory carrying cost
Opportunities
1. Growing demand in South Asia and Eastern countries
2. Luxury products uses gold and diamond
3. India acting us outsourcing hub for designing and manufacturing jewellery
Threats
1. Fluctuating prices on gold and rough diamonds
2. Competition from other countries such as China, Israel and Belgium
SWOT
ANALYSIS
Government Policies
The Government of India has allowed 100 per cent foreign direct investment (FDI) in gems and jewellery industry
In order to encourage more investments in the sector, gems and jewellery SEZs have been set up in four states: Maharashtra, West Bengal, Rajasthan and Andhra Pradesh
Formal approval has been given to 13 SEZs in the sector — three have got in-principal approval and seven have been notified, as per the SEZ Board of Approval statistics
The value limits of personal carriage of gems and jewelleryproducts in case of participating in overseas exhibitions increased to US$ 5 mn
Major Players
About PlayersSo
me
List
ed P
laye
rs
TANISHQ
GITANJALI
TBZ
RAJESH EXPORTS
Tanishq is one of India's largest, most desirable and fast growing jewelry brand
in India
With retail sales of 8000 crore last year and gunning for 10000 crores in 2014-15
Factory located at Hosur, Tamil Nadu, the 1, 35,000 sq. ft. factory is equipped with the latest and most modern machinery
Bu
sin
ess
Mo
del
Large customer base
Online ordering of gold
Gold harvest Scheme
Global branding strategy
One of the largest integrated branded jewellery manufacturer-retailer with turnover of $3billion
Distributes eight out of the top ten jewellery brands in the country
Gitanjali’s extensive network of own stores, shop-in-shops and
franchise outlets span across 300 cities
Bu
sin
ess
Mo
delDeveloping channels
Strengthening the diamond jewellery
Diversifying the range of offerings
High margin markets such as Japan and the USA
Operation• It has 3 world-class diamond polishing
facilities in India with possessing production capacity of 4,00,000 stones per month
• It has six jewellery manufacturing unit that produce 2,35,000 pieces per month
• The Group’s international design hub is located in Italy
• International manufacturing unit is in China
TBZ is a popular jewellery retail chain that has its presence in almost 21 cities
in India.
TBZ was the first to offer buy back guarantee on gold jewellery
The first to promote the concept of light weight jewelry and the first to offer
certified solitaire diamonds
Bu
sin
ess
Mo
del
Outsourcing the jewellery
Increase contribution of diamond and platinum
jewellery business to their total revenues
Invest in their marketing initiatives and brand
building exercise
Operation• 28 showrooms in 21 cities across ten states,
which have a total carpet area of approx 121,818 sq.ft
• It has a two in house diamond studded jewellery manufacturing unit with an area of 17,739 sq ft and one gold refining unit with a capacity of 4500kg in Mumbai
• TBZ sources gold jewellery from around 150 vendors across India
REL has one of the world's largest jewellery design database of 29000
designs
REL is the lowest cost gold jewelleryproducer in the world
REL also retails its products through its own network of retail jewellery
showrooms Shubh Jewellers spread across India
Bu
sin
ess
Mo
delCustomized options to
customers
SHUBH Service Centers
Middle man eliminated
Jewellery Production
Operation
• REL has a gold refining unit at Uttarakhandand capacity of the refining unit is to refine Four hundred tonnes of gold per annum
• REL has set up a state-of-the-art jewellerymanufacturing unit at Whitefield, Bangalore which is the largest jewellery manufacturing facility in the world
• REL has created an exclusive set of designs to be sold at Shubh showrooms
Comparative Study
Tanishq Gitanjali TBZ Rajesh Exports
Stores 163 stores 101 Stores 28 stores 85 stores
Revenue Rs. 8630.03
crore
Rs. 7,343.03
crore
Rs.1824.34
crore
Rs.29197.19
crore
Business
Strategy
22Ct and 18Ct
jewellery
Revenue from
High margin
markets
Light weight
jewelryExport oriented
income
EBITDA
Margin10.2% 5.39% 7.6% 13.85%
Inventory
Turnover
Ratio
2.83 6.97 1.61 40.44
Change in Trends
Traditional Practice Emerging Trend
Demand peaks during weddings and
festival seasons
They still remain the main demand drivers
but use as regular wearing and gifting has
evened out the demand throughout the
year.
Consumption of pure gold , preferred 22-
carat with traditional & ethnic designs
Light-weight and lower carat jewellery
preferred. Trend is more towards
fashionable and contemporary designs
Purchase from neighborhood jewellersGrowing preference for brands, retail
stores & e-retailing
Pre-dominance of gold (yellow)-based
jewellery.
Acceptance of white gold, platinum and
diamond-studded jewellery
Jewellery largely sold on prevailing gold
price, per gram, plus labour charges.Branded players sell on a fixed-price basis