gems and jewellery industry

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Industrial Project on Gems & Jewellery By, Hari| Prapti |Ramya| Vivek

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Page 1: Gems and jewellery industry

Industrial Projecton

Gems & Jewellery

By,Hari| Prapti |Ramya| Vivek

Page 2: Gems and jewellery industry

2500-1800 AD Indus

Valley Jewellery

5th-12th Century

Jewellery on

Medieval Ages

13th -17th Jewellery

Renaissance Jewellery

18th- 19th Century

Victorian Jewellery

Evolution

Page 3: Gems and jewellery industry

19th- 20th Century

Art Nouveau

1970s to Present

Contemporary Jewellery

Evolution

Page 4: Gems and jewellery industry

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

Page 5: Gems and jewellery industry

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

Page 6: Gems and jewellery industry

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

Page 7: Gems and jewellery industry

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

Page 8: Gems and jewellery industry

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

Page 9: Gems and jewellery industry

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

Page 10: Gems and jewellery industry

Types of JewelleryJe

wel

lery

Mangtika

Necklace

Ear Rings

Nose Rings

Bangles

Arm Band

Rings

Waist Band

Anklet & Toe Rings

Page 11: Gems and jewellery industry

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

Page 12: Gems and jewellery industry

Consumption Pattern

Page 13: Gems and jewellery industry

Region Preference

Page 14: Gems and jewellery industry

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

Page 15: Gems and jewellery industry

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

Page 16: Gems and jewellery industry

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

Page 17: Gems and jewellery industry

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

Page 18: Gems and jewellery industry

Major Players

Page 19: Gems and jewellery industry

About PlayersSo

me

List

ed P

laye

rs

TANISHQ

GITANJALI

TBZ

RAJESH EXPORTS

Page 20: Gems and jewellery industry

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

Page 21: Gems and jewellery industry

Bu

sin

ess

Mo

del

Large customer base

Online ordering of gold

Gold harvest Scheme

Global branding strategy

Page 22: Gems and jewellery industry

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

Page 23: Gems and jewellery industry

Bu

sin

ess

Mo

delDeveloping channels

Strengthening the diamond jewellery

Diversifying the range of offerings

High margin markets such as Japan and the USA

Page 24: Gems and jewellery industry

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

Page 25: Gems and jewellery industry

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

Page 26: Gems and jewellery industry

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

Page 27: Gems and jewellery industry

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

Page 28: Gems and jewellery industry

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

Page 29: Gems and jewellery industry

Bu

sin

ess

Mo

delCustomized options to

customers

SHUBH Service Centers

Middle man eliminated

Jewellery Production

Page 30: Gems and jewellery industry

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

Page 31: Gems and jewellery industry

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

Page 32: Gems and jewellery industry

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

Page 33: Gems and jewellery industry