Retail jewellery sector: Indriya entry adds lustre to formalisation

Aditya Birla joins the fray of an already booming jewellery retail market

The organised jewellery market is heating up as existing players rapidly expand their presence, driven by a shift from unorganised to organised jewellers.

While Titan Company was the first player to make the move in the early 1990s, industry experts and analysts note that the sector is now witnessing a slew of organised players picking up pace and rapidly expanding their store count.

The Indian jewellery market is poised to grow to Rs 11-13 trillion by 2030, up from Rs 6.7 trillion currently.

Aditya Birla Group is the latest to join the bandwagon and enter the jewellery space, as it looks to chomp on a slice of growth in jewellery retail. The group announced the launch of its brand Indriya last Friday.

“For all its impressive scale, the industry has historically been largely unorganised. More than 60 per cent of the industry is still unorganised. There are only a handful of national players, and the largest national brand commands only 6-7 per cent of the nationwide market share,” Kumar Mangalam Birla, chairman of Aditya Birla Group, pointed out during the launch.

“Entering the jewellery business is compelling due to the ongoing value migration from informal to formal sectors, the rising consumer preference for strong, trusted brands, and the ever-booming wedding market, all of which present substantial growth opportunities,” he added.

Colin Shah, founder and managing director at Kama Jewelry said  that the shift from unorganised to organised will continue over the next five to seven years, with the share of organised players increasing steadily.

“In the past decade, we have gone from the organised market owning zero per cent market share to now being around 35 per cent,” Shah added.

He added, “A lot of wealth is being created now, and this is the first generation with money. This population typically shops at malls where organised jewellery retailers are present, which will cause the shift to increase.”

Also, larger retailers have deep pockets to spend on marketing and branding. Shah also pointed out that the challenge these brands face is finding the right real estate, which is key.

An analyst mentioned that while Aditya Birla has forayed into the jewellery retail space, many players are already present at both national and regional levels. However, he noted that Titan’s jewellery business, Tanishq, has seen its revenue double in recent years.

Another reason formalisation has picked up pace is due to the hallmarking of jewellery.

“Access to low-cost gold and metal loans and access to the capital markets to raise funds make it easier for jewellers to offer a range and provide a better experience at their stores,” he concluded.

Gold standard

• Indian jewellery market is poised to grow to Rs 11 – 13 trillion by 2030 from Rs 6.7 trillion currently
• Over half of the jewellery market in India still remains unorganised 
• Aditya Birla joins the bandwagon, launches its jewellery brand Indriya last week
• Move from unbranded to branded jewellery to drive growth for the sector