Jewellery Chain Stores May Hold 40% Of India Market By 2027, Says World Gold Council
The top five jewellery chain makers will add 800-1,000 stores over the next five years, according to a World Gold Council report.
India’s massive market for jewellery, which for decades has remained fragmented, is slowly but surely being taken over by chain stores, according to a report by the World Gold Council.
In just the last five years, regional and national chain stores like Tanishq and South-based Kalyan Jewellers and Joyallukas have increased their market share to 35% from 30%, the report said. In that time, medium-sized jewellers have captured a larger chunk of the market too, seeing their share rise to 28% from 20%. Small, standalone jewellers, though, have seen their share shrink from 50% to 37%, the report stated.
The World Gold Council attributed the changing landscape of the jewellery market to demand for better designs and consumer experience, a growing awareness about hallmarking, better pricing structures and competitive return policies. The introduction of the goods and services tax and demonetisation have also contributed to the consolidation.
Over the next five years, chain stores, most of which are undertaking rapid expansion, will continue to grab market share and could end up holding 40% of the market. The top five stores alone will likely open 800-1,000 stores during this time, the World Gold Council report estimated.
Changes In Manufacturing
Despite being one of the world’s largest fabricators of gold, India’s gold manufacturing industry continues to remain fragmented and unorganised. The World Gold Council report said only 15-20% of manufacturing units operate as organised, large-scale facilities, though this is up from 10% five years back.
“Increasingly, the government and industry are focusing on shifting manufacturing from congested centres to jewellery parks and this will aid organisation within the trade,” the World Gold Council report said. “These integrated industrial parks will provide access to facilities for artisans under one roof, including manufacturing units, commercial areas, residences for industrial workers, commercial support services and an exhibition centre.”