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Jewellery Synopsis.
Jewellery Synopsis.
Jewellery Synopsis.
CONSUMER PERCEPTION
TOWARDS
BRANDED AND UNBRANDED
JEWELLERY
By
CHIRAG PARIKH
Change in Perception:
In the globalized era, jewellery in India, like many other traditional product
segments, is undergoing an astounding change of perception. While it
continues to enjoy the position of being an enhancer of beauty and means of
security, the new-age consumer perceives jewellery as a personal accessory
that manifests the wearer’s attitude, personality and lifestyle. It is imperative
for jewellery manufacturers to recognize this shift and adopt new, innovative
approaches in the creation of jewellery. This is what will enable them to
establish an edge over their competitors. On the other hand, a glaring reality
is that the traditional jewellery sector constitutes a significant chunk of the
jewellery market. This jewellery in most instances is handcrafted and bought
from the family jeweler. This segment has a strong socio-cultural bias, as the
jewellery is bought for auspicious occasions like weddings, engagements,
and rituals. The decision to buy a piece of jewellery is more often a family
decision than an individual choice. Jewellery in this segment is also a means
of investment and future security traditionally constituting the wealth that a
bride takes with her to her new home.
RESEARCH PROBLEM
OBJECTIVE OF RESEARCH
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. Jewellery was fabricated mainly in 18, 22 and 24 carat Gold as
Hallmarking was not very common in India under cartages was prevalent.
According to a survey done by a Bureau of Indian Standard (BIS), 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 carat to 18-
carats as 22- carat Gold jewellery.
TANISHQ:
In the late 1990s, players in the branded gold jewellery market formulated
stragegies for wooing customers. According to Jacob Kurian, Chief
operating officer of Tanishq, the challenges were many. As the jewellery
market was highly fragmented, lacked branding, and allowed many unethical
practices to flourish, Tanishq worked hard on a two-pronged brand-building
strategy: cultivate trust by educating customers about the unethical practices
in the business and change the perception of jewellery as a high-priced
purchase. Said Kurian, “We are changing the attitudes of customers from
blind trust to informed trust.”
According to Kurian, the first part of the strategy was “to provide a point
of differentiation in a highly commoditized category- which is the whole
point of branding.” The second part of the strategy was to project Tanishq as
an unimpeachable mark of trust, according to Kurian, “If differentiation
plays the role of primary attraction, trust takes care of lifelong
loyalty.”(www.icmrindia.org/free%20resource/casestudies/branded-gold-
jewellery.html)
Some of the companies have even cleverly played on Indian customs and
tradition to advertise and establish their brands. Jewellery is now marketed
for every occasion; even Valentine’s Day calls for a “a special something
[diamond] for a special someone”.
One of the reasons branded jewellery is doing well is that now anyone can
walk into a mall, window shop and decides at their own that they would like
to buy. The entire culture of shopping has changed with attentive and helpful
attendants and well-displayed products.
The branded jewellery industry is still in its infancy, but increasing growth
rates show that in a short time it will corner a significant chunk of the
market, perhaps the best compliment to the branded segment is that old
jewellery showroom have also begun to design jewellery lines under a brand
name.(www.flonnet.com/f12223/stories/20051118003809800.html)
The future outlook given in the report is based on past growth trends, current
industry and regulatory developments besides base drivers, opportunities
and challenges faced by the gems and jewellery industry in India.
(www.rncos.com/Reprt/IMI48.htm)
“Today everyone is looking for value money, a new design, a new concept,
something very creative and that is the concept of retail today. It is not like
yesterday where the shopkeeper or the manufacturer used to dominate.
Today. The customer is going for customized designs; the whole concept is
changing.” Says Muralidharan. “ the consumers is looking for value for
money, when they buy diamond. They like to buy from reputed players like
example Tanishq, Goenka, D’Damas, Gitanjali, Nakshatra etc. each of them
has a standard quality certification internationally and that is going in the
minds of the customer when they talk about buying from organized sector”.
(www.pressabout.com/indian-customers-showing-interest-in-branded-
jewellery)
Gems and jewellery sector worried over changes in Direct Taxes Code
Faced with severe margin pressures, members of the gems and jewellery
industry (GJI) are now concerned about the proposed changes in the Direct
Taxes Code, including provisions relating to search and seizure, tax
deduction at source (TDS) and minimum alternate tax (MAT).
The All India Gems and Jewellery Trade Federation (GJF), an apex body
representing the trade feels that since the proposed changes are in the draft
bill now under circulation, the Finance Ministry could reconsider these
provisions. If the Code gets cleared in the present form to be applicable from
April 1, 2011, the industry would be adversely hit.
The seizure of entire stock in trade when there is any difference during raids
is not acceptable. The GJF has also objected to 2 per cent tax on gross assets
since the industry operates on small margins with high inventory levels.
There is a discrepancy in this as a company earning 2 per cent net profit will
require to pay the same tax as a company earning 8 per cent net profit, Mr
Jain said.
Exports-During April 2009-January 2010, the total exports for gems and
jewellery stood at US$ 22.54 billion as compared to US$ 20.98 billion
during April 2008-January 2009. During the same period, the sector
registered a growth of 7.42 per cent over the previous year.(FICCI)
RESEARCH METHODOLOGY
www.icmrindia.org/free%20resource/casestudies/branded-gold-
jewellery.html
www.flonnet.com/f12223/stories/20051118003809800.html)
(www.rncos.com/Reprt/IMI48.htm
www.pressabout.com/indian-customers-showing-interest-in-branded-
jewellery
www.commodityonline.com/news/Branded-gold-jewellery-shops-
lure-Indians-23837-3-1.html
THE HINDU(Newspaper)
FICCI
JCK November 2006
RNCOS on October-27-2009
Article-17 august,2009 ‘jeweller magazine’ by Nick Lord
WEB SITES:
www.icmrindia.org
www.scribd.com
www.commodityonline.com