Jewellery is one of life’s luxuries. And India’s romance with jewellery is legendary. Unlike other consumer categories, the luxury segment in jewellery is not an alien concept in India. Earlier, it was restricted to the blue-blooded and international luxury brands. Today, the clientele for luxury jewellery has increased and many Indian jewellery players have entered the market as well. Traditional manufacturers have floated their brands to rival luxe ones from abroad. Jewellery priced over Rs 50,000 for trinkets and Rs 10 lakh for larger pieces often qualify as luxury pieces, though that is not the sole differentiator. Anyway, the point is jewellery forms the biggest chunk in the luxury pie in India. Capgemini which files an annual report on luxury says jewellery and watches comprise 40 per cent of luxury consumption in India as compared to 15 per cent globally.
However, the size belies the characteristics of the market which act as deterrents to foreign luxe jewellery players. Luxury or not, jewellery still sees commodity-buying among consumers. Their appreciation for craftsmanship or the quality of the embedded gems that give luxury jewellery its margin are still outweighed by the concern for the value of the metal, gems and making charges.
Biren Vaidya, design head and MD of The Rose Group, observes, “Indians have consumed jewellery for the last 2,000 years. It is integral to our culture as is the tendency to buy our money’s worth of jewellery that can be resold, if needed. It doubled as security. Most foreign brands can’t commoditise the pieces they sell. But for an Indian buyer, it is ingrained in their buying habit for jewellery to ask about the components’ worth.” As a result, Rose, the Mumbai-based luxury jewellery brand, ensures that it provides its elite clientele with a full material guide to the pieces they choose, the amount over and above the material value would be explained by the brand’s service and exclusive gems, handpicked by Vaidya himself. Today, it caters to more than 6,500 families both in India and overseas. The tendency to ask for the basic facts has gone down from 2004-05 when earlier eight out of 10 buyers at Rose would have asked for the fact sheet.
Brand creation in the luxury jewellery space has got a boost with jewellers who started as manufacturers putting their might behind their retail brands. Both Rose and Gitanjali (which caters to customers across segments) are a case in point. Rose has seen customers claiming jewellery made by Vaidya as their own designs, made by their own karigars to customers knocking off Rose designs and passing them as genuine Rose pieces. Mehul Choksi, chairman and managing director, Gitanjali Group, on the other hand, has lined up its Italian acquired brands for launch in India to cater to the luxury segment. “The Italian brands have impeccable designs which can’t be manufactured in India. In Europe, people have always put craftsmanship above intrinsic value of the jewellery piece. For example, they will choose a black diamond over a white diamond ring just for its design,” points out Choksi. It has already launched Stefan Hafner in India.
The range of luxury jewellery can be anything from Rs 50,000 for smaller pieces to Rs 2 crore for statement pieces. Choksi warns of segmenting according to the price tag. “Luxury jewellery will only be those pieces whose price is far more than the value of the materials that go into it. A Rs 3 lakh gold piece won’t be luxury because it would be bought for the gold. The moment there is value addition in terms of labour and design, it becomes, it becomes a luxury piece.”
India also has a strong taste in traditional jewellery. The authentic ones such as jadau (stone studded Rajasthani jewellery) pieces have always been priced at a premium and found willing buyers. Choksi says it is almost 10 per cent of the $100 billion Indian jewellery market. However, he puts luxury jewellery at 2 per cent of the total market.
“Indians have willingly bought into jadau, despite the premium they paid which was not commensurate with its material value,” Choksi points out. Thus playing safe, all the luxury Indian brands have their collections strongly rooted in traditional designs and concepts, and only venture into contemporary or fusion pieces after the traditional pieces are provided for. Ashish Chordia, owner of Shreyans, the franchise for Van Cleef & Arpels, says, “Indians like more intricate jewellery and minimalistic designs don’t always work.”
SERVICING AND STORE AMBIENCE
According to Capgemini, in 2009-10, the luxury jewellery segment recorded a 30 per cent annual growth amounting to $1 billion. Retail and servicing are the other factors that still need to improve if players such as Tiffany, Harry Winston and Graff etc are to enter the fray, according to analysts. Romain Delavenne, global consulting business development leader, Capgemini Consulting India, says, “Rentals comprise 30 per cent of total costs for luxury brands compared to 15 per cent globally. This has forced foreign luxury brands to remain confined to luxury hotel galleries and international airports. Luxury malls are providing some respite. But brands must develop their own exclusive stores to get a strong foothold in the market. For example, Hermes has a 4,000 square feet store in Mumbai.”
Chordia says, “The foreign brands have been working with an Indian clientele for over 100 years. But they lost ground in between and are only being reintroduced now.” Louis Ferla, MD, Middle East and India, Cartier, claims, “We have doubled our business in the last year and are in six cities. The main challenge is to find the right retail place and also whether we can harness the rich resource pool in India for manpower.”
The Indian luxury brands are aware of the need for servicing as well. Rose has its own salons exuding a sophisticated ambience. “There has to be a sense of ownership but at the same time it has to be different from foreign players,” feels Vaidya.
One of the biggest challenges in the luxury jewellery market is the easy access to knock-offs that consumers can get from their local or family jewellers. Sandeep Kulhalli, vice-president, retail and marketing, Tanishq, says that is the reason he is warily testing the semi-luxury segment. “With Zoya, we are trying to inculcate in the consumer the appreciation for the exclusivity of the piece and reinforce it with the stores that will be different from Tanishq stores. Only a few pieces will be made for a new design,” adds Kulhalli.
Delavenne points at another trend: “The luxury jewellery market has been long dominated by the affluent class in India. However, small and medium enterprise owners, typically in cities without access to luxury jewellery brands are increasing turning to the internet to buy their luxury jewellery.”
