Small jewellers join hands to create brands

This is one trend that could redefine modern retail in India. As the large jewellery brands snatch market share away from smaller players, the small jewellers (the mom-and-pop equivalent of grocery retail outlets) are coming together to form an umbrella brand and share a common marketing strategy.

Industry experts indicated that this generic effort will enhance product availability through common sourcing and help small retailers climb up the value chain. "Jewellery retailing has to be perceived as a focused marketing activity as the concept of loyal customers is a myth. With the entry of new players and competition from other sectors, there is a need to retain existing customers and attract new ones," said Dharmesh Sodah, director, World Gold Council.

Indian consumers generally make jewellery purchases from family jewellers. However, with the entry of branded players in the market, the consumers, especially the younger lot, are graduating to buying branded jewellery. This trend is affecting the neighbourhood jeweller who is not a franchisee for the big brands such as Tanishq, Gili and others.

According to industry experts, individual entrepreneurs are uniting to offer a uniform retail experience. For instance, four to five jewellers from different parts of Mumbai will form an umbrella brand and adopt common marketing and advertising strategy.

Ashok Minawala, president, Gems and Jewellery Federation said, "The emergence of organised retail will make jewellery industry more professional and prepared to face challenges. Companies with better systems and management will have upper edge on dictating trends in retailing." He mentioned that entry of corporate firms into retail would bring in new buyers, thus promoting the growth of jewellery manufacturers and wholesalers.

Another significant trend in jewellery retailing is penetration in the rural areas. Tanishq has started focusing on the lower end of the market through its brand, Gold Plus. This targets customers who buy gold as an investment product rather than for immediate use. The industry is expecting increased activity in the rural sector, with jewellers opening shops in the smaller markets. "While branded jewellery is becoming popular in cities, the rural population buys jewellery for sentimental and religious values such as weddings and investments. Local jewellers have started opening shops at the district and taluka levels for catering to the newer markets," said Fatehchand Ranka of Pune-based Ranka Jewellers.

The Rs 70,000 crore Indian gems and jewellery industry is also witnessing a tie-up of brands with large format retailers. Goldiam International, the manufacturer of Ola brand of silver jewellery, has tied up with Future Group to develop jewellery for Gold Bazaar.