Branded Gold Jewellery Market in India

Gold Jewellery Market in India Contd...

In the 1990s, the number of retail jewellery outlets in India increased greatly due to the abolition of the Gold Control Act. This led to a highly fragmented and unorganized jewellery market with an estimated 100,000 workshops supplying over 350,000 retailers, mostly family-owned, single shop operations. In 2001, India had the highest demand for gold in the world; 855 tons were consumed a year, 95% of which was used for jewellery. The bulk of the jewellery purchased in India was designed in the traditional Indian style.⁶

Jewellery was fabricated mainly in 18, 22 and 24-carat gold. (Refer Table I for carat calculation) As Hallmarking⁷ was not very common in India, under-caratage was prevalent. According to a survey done by the Bureau of Indian Standards (BIS),⁸ most gold jewellery advertised in India as 22-carat was of a lesser quality. Over 80% of the jewelers sold gold jewellery ranging from 13.5 carats to 18 carats as 22-carat gold jewellery.

TABLE I
KARAT CALCULATION

Source: ICMR Center for Management Research

The late 1990s saw a number of branded jewellery players entering the Indian market. Titan sold gold jewellery under the brand name Tanishq, while Gitanjali Jewels, a Mumbai-based jewellery exporter, sold 18-carat gold jewellery under the brand name Gili. Gitanjali Jewels also started selling 24-carat gold jewellery in association with a Thai company, Pranda. Su-Raj (India) Ltd. launched its collection of diamond and 22 -carat gold jewellery in 1997.

The Mumbai-based group, Beautiful, which marketed the Tiffany range of products in India, launched its own range of studded 18-carat jewellery, Dagina. Cartiers entered India in 1997 in a franchise agreement with Ravissant.⁹ Other players who entered the Indian branded gold jewellery market during the 1990s and 2000-01 included Intergold Gem Ltd., Oyzterbay, Carbon and Tribhovandas Bhimji Zaveri (TBZ).

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6] In South India, the designs are inspired by nature with motifs of the mango, rice grains, melon, cucumber seeds, etc. In Western and Northern India the designs are influenced by the Meenakari (enamelling) and Kundan (setting of precious and semi-precious stones in gold) styles.
7] Hallmarking is an inscription on any piece of jewellery that shows the caratage of the gold used. This prevents consumers from being duped into buying low caratage jewellery.
8] The Bureau of Indian Standards (BIS) was set up after the enactment of the Bureau of Indian Standards Act, 1986. It operates a product certification scheme, and grants licenses to manufacturers in industries ranging from agriculture to textiles to electronics. The certification entitles licensees to use the ISI mark, which is considered the symbol of quality in India.
9] Ravissant is India’s leading luxury and lifestyle store. It has strategic tie-ups with some of the world’s best-known luxury brands. Ravissant has exclusive retail distribution arrangement for Cartiers’ products in India. Cartiers’ first showroom in India was opened at a Ravissant store in Delhi in 1997. This Ravissant boutique houses the latest collection of Cartiers’ products.