Jewellery brands like Oyzterbay, Gili and Orra—now familiar to a growing clientele—look all set to expand their presence as Indian jewellery makers step up investment in retail outlets to lure freer-spending consumers.
With prices starting at as low as Rs2,000, branded jewellery is now affordable even for people with average pay packets in the country’s fast-growing metros, manufacturers said.
“Traditionally, it has been a commodity type of product. It is slowly going the branding way,” V. Govindraj, vice-president, retail and marketing, jewellery division of Titan Industries Ltd, said.
At $12.2 billion (Rs53,924 crore), India now has 8% of the global retail jewellery market. This is estimated to grow 8.8% annually over the next decade to touch $28.8 billion, according to Neelesh Hundekari, principal, AT Kearney.
This is why jewellery makers like Classic Diamonds (India) Ltd, Flawless Diamond (India) Ltd and Rajesh Exports Ltd are on a retail expansion drive.
Also, according to a report by the Gem and Jewellery Export Promotion Council and business advisory firm KPMG, India’s share of the diamond-processing pie—57%—will drop to about 49% in value terms by 2015, while retail is set to grow.
Watch maker Titan Industries—which is also India’s oldest branded-jewellery retailer with over a decade in the business—saw sales of its jewellery brand Tanishq surpassing normal watch sales in 2005-06, accounting for 53% of turnover.
Its jewellery sales have topped Rs1,000 crore so far this year. “Jewellery would grow at a higher rate and the contribution of jewellery would possibly increase,” Govindraj said.
Rajesh Exports plans to showcase three retail brands—Laabh, Shubh and Oyzterbay—in 180 stores in the first phase of its expansion and aims to draw 30% of its revenues from retail in three years, chairman Rajesh Mehta said.
Flawless Diamond is setting up 25 stores under its Aum brand by March 2007 with an investment of about Rs25 crore. It expects retail revenue at Rs200-300 crore by September 2007, director Rajiv Kamdar said.
But branded retailing could come in for some very stiff competition from family and reputed local jewellers and may also be hit by a lack of ideal retail locations for niche brands.
“Trying to find the right location is very important,” said Nirav Bhansali, director, Classic Diamonds. “We are still learning the retail business. We still prefer to walk properly and then run.”