Silver lining

METALS: Rise in demand for silver makes Indian exporters shift focus to domestic market.

Deepak Hiranandani is an established name among silverware exporters from India. For the last 13 years, his company Karma Silverware (a partnership with bullion dealer Narain Jalan) has been supplying a range of sterling silver platters, bowls, cups, napkin rings, bottle corks, candle stands, ashtrays and other "flatware" and "hollow ware" to well-known brands in the US, Europe and West Asia "" Carrs of Sheffield, Ross Simons, Schiavon, Lunt Silversmiths, Warwick, and so on.

This year, Karma will make its debut in the domestic market. Hiranandani has engaged Srishti Bajaj, a product designer who trained at the Royal College of Art, London, to come up with a line, Silver and I, targeted primarily at the corporate gifts segment.

"Sales at our stores have been growing at 25-30 per cent a year," adds Deepak Whorra of Episode, which made a similar switch from export to retail a few years ago. Episode has seven stores at the moment, which it plans to increase to 21 by the end of 2008.

Then there is Frazer and Haws, whose president , Archana Singh , reports, is actively considering opening shop in cities like Kolkata and Hyderabad. "There is a lot of demand in these places, with some shops copying our designs brazenly."

Considering that the prices of silver have almost tripled in the past two years, all these expansion plans may seem inexplicable.

The Silver Jewelry Report of March 2007 put out by The Silver Institute notes the strange patterns of silver consumption in India: "At its peak, silverware constituted 65 per cent of total demand (at 53.5 Moz (1,665 t))...although this has now fallen to just 40 per cent."

Crucially, silver jewelry has been smaller than silverware since the early 1990s, but perhaps more importantly, both jewelry and silverware have been losing market share to coin/bar, the report says.

As for silverware's share in the gifting market, Singh says concrete figures are unavailable, but it is about 40 per cent, with the organised sector accounting for only 50 per cent of this "" the rest made up by workshops whose products lag behind, in terms of quality (hall-marking) and design.

But clearly, the growing affluence in urban India and the exposure to international trends have had a positive effect on the market for silverware, fuelling its players' appetite for more. "When we started," says Ravi Chawla of Ravissant, "people would ask how many grams is this. Thankfully, no one does that now."

Ravissant, which was probably the first player to make a dent in the urban market with its designer silverware, has now set its eyes on the international market "to take our business forward", says Chawla, its owner.

It will form a joint venture with Vendome Luxury Group, which will open 20 stores abroad in next two-three years selling its range of hand-made designer sterling silverware, up from the six it has now.

But in the domestic market, "the customer is not worried about price," says Whorra. Singh of Frazer and Haws concurs: "Customers are far more willing to pay for design."

Fraser and Haws is already test-marketing a range of bigger, limited edition works under a new art range, where prices are a Rs 1 lakh and above.

At the other end of the spectrum, it also has a wide range of products at prices of around Rs 1,500, where silver is used with other materials like stone, terracotta, crystal, resin. This year, the company will be attempting to breach the Rs 1,000-barrier.