 "Jewellers seek to expand presence abroad")
With weak festive season sales in the domestic market, Indian jewellery manufacturers have decided to increase their global presence aggressively. New companies in this space are either considering opening new stores or supplying to other retail chains abroad.
The new 80:20 rule for gold imports, which requires importers to supply at least 20 per cent of their imports to exporters, has compelled jewelers to export more to ensure enough is made available for domestic use.
Companies such as Tanishq, Gitanjali and Shree Ganesh Jewellery House are under various stages of expansion in global markets. Tanishq, which started operations in 1994 as a range of jewellery and watches aimed at the US and European markets, later shifted focus to the domestic market. Now, the company is planning to explore foreign markets again. “Certainly, we are looking for global expansion,” said Sandeep Kulhalli, vice-president (retail and marketing), Tanishq.
Gitanjali Gems, for which foreign operations account for 13 per cent of the turnover of Rs 16,500 crore, plans to boost its presence in the US, West Asia and Japan. “Global markets look more promising than India due to the restrictions in gold supply imposed by the Centre. We plan to hasten our growth in global markets,” said Mehul Choksi, chairman and managing director of Gitanjali Gems.
Through the next year, the company plans to launch 25 new stores in the US. Currently, it has 105 stores in that country. Plans are afoot to open 10 and 25 new stores in Japan and West Asia, respectively; as of now, it has 120 stores in Japan and seven in West Asia.
“With about 40 per cent of global jewellery consumption in the US alone, expanding presence in such a market makes sense. While Indian markets are not saturated in terms of jewellery consumption, global markets look promising in terms of higher realisation,” said Shreyas Doshi, chairman, Shrenuj & Company.
To serve foreign customers, Shree Ganesh Jewellery House plans to shift its manufacturing base from India to China.The new 80:20 rule for gold imports, which requires importers to supply at least 20 per cent of their imports to exporters, has compelled jewelers to export more to ensure enough is made available for domestic use.
Companies such as Tanishq, Gitanjali and Shree Ganesh Jewellery House are under various stages of expansion in global markets. Tanishq, which started operations in 1994 as a range of jewellery and watches aimed at the US and European markets, later shifted focus to the domestic market. Now, the company is planning to explore foreign markets again. “Certainly, we are looking for global expansion,” said Sandeep Kulhalli, vice-president (retail and marketing), Tanishq.
Gitanjali Gems, for which foreign operations account for 13 per cent of the turnover of Rs 16,500 crore, plans to boost its presence in the US, West Asia and Japan. “Global markets look more promising than India due to the restrictions in gold supply imposed by the Centre. We plan to hasten our growth in global markets,” said Mehul Choksi, chairman and managing director of Gitanjali Gems.
Through the next year, the company plans to launch 25 new stores in the US. Currently, it has 105 stores in that country. Plans are afoot to open 10 and 25 new stores in Japan and West Asia, respectively; as of now, it has 120 stores in Japan and seven in West Asia.
“With about 40 per cent of global jewellery consumption in the US alone, expanding presence in such a market makes sense. While Indian markets are not saturated in terms of jewellery consumption, global markets look promising in terms of higher realisation,” said Shreyas Doshi, chairman, Shrenuj & Company.
About a year ago, Finance Minister P Chidambaram had levied 20 per cent minimum alternate tax on units in special economic zones. Since these units face supply restrictions to domestic markets, it would be viable to shift these either to domestic tariff areas (despite the 28 per cent MAT levy) or abroad. “Therefore, we are considering setting up a manufacturing unit in China, for which plans are underway. This unit would supply contemporary and western-type jewellery items to foreign markets,” said Umesh Parekh, managing director of Shree Ganesh Jewellery House.
Vipul Shah, chairman of the Gems & Jewellery Export Promotion Council believes this would offset early losses. "We estimate to recover the early loss in jewellery exports in the remaining part of the year and record a stable financial year, in terms of jewellery exports," said Shah.
In the April-September period, India's gems and jewellery exports fell about 10 per cent to Rs 97,429.12 crore compared to the year-ago period. In dollar terms, these fell 16 per cent to $16,537.38 million.