An industry analysis of Gems & Jewels industry for the year 2014

1. Industrial Project
on
Gems & Jewellery
By,
Hari| Prapti |Ramya| Vivek

2. 2500-1800
AD Indus
Valley
Jewellery
5th-12th
Century
Jewellery
on
Medieval
Ages
13th -17th
Jewellery
Renaissance
Jewellery
18th- 19th
Century
Victorian
Jewellery
Evolution

3. 19th- 20th
Century
Art Nouveau
1970s to Present
Contemporary
Jewellery
Evolution

4. About Indian Jewellery Market
• Indian gems and jewellery industry had a
market size of US$ 41.61 billion in 2013
• Indian gems & jewellery market is highly
fragmented with 94% of players operating in
the unorganized sector
• India is the second largest consumer of gold in
the world with 975 tonnes in 2013
• FDI inflow for the period Apr 2000-June 2014
is USD 356 million
Source: FICCI, WGC, IBEF, DIPP

5. Organized Retail Market Split
Food and Grocery
2%
Apparel
33%
Mobile and
Telecom
11%
Food Service
7%
Jewellery
6%
Consumer
Electronics
8%
Footwear
4%
others
24%
Home and Interior
5%
Source: ONICRA

6. India’s Position in Global Level
• India and China are
the two largest
gold consumers in
the world followed
by the Middle
Eastern region
• The Gems and
Jewellery industry
of India
contributes nearly
55% of the world’s
net exports of cut
and polished
diamonds in valueSource: WGC

7. Significance of Jewellery in Indian
Tradition
• Jewellery and
Indian women
are always linked
inherently.
During wedding
as well as
numerous other
occasions, a
woman is gifted
jewellery by her
parents
Security
• Security in times
of contingency
and also serves
the purpose of
financial need,
which can be
depended upon
Celebration
• Jewellery are
gifted in different
phases of life
such as, birth
and marriage.
Ornaments like
mangalsutra
quintessential for
married Indian
women

8. About Gold
• Gold has formed the backbone of global
economic activities as a reserve currency
over the last several centuries.
• Currently a little over 2,600 tons of gold is
mined per annum
• Gold can be alloyed with different metals to
give different colours, such as white, yellow,
pink, black, purple and green
• South Africa is the largest producer of gold
in the world

9. About Diamond
• Diamonds are pure carbon—earth's most
common element and the same material as
the graphite in a common lead pencil—
formed into perfect crystal patterns
• They were formed eons ago under
incredible heat and pressure deep in the
earth
• The weight of a diamond is measured in
carats; a carat is a fifth of a gram
• The diamonds are purchased based on the
Cut, Color, Clarity and Carat Weight

10. Types of JewelleryJewellery
Mangtika
Necklace
Ear Rings
Nose Rings
Bangles
Arm Band
Rings
Waist Band
Anklet & Toe
Rings

11. Jewel’s Classification
Gems and
Jewellery
Gem Stones
Pearl
Emerald
Topaz
Blue Saphirre
Coral
Ruby
Diamond
Cat's Eye
Yellow
Sapphire
Jewellery and
Precious
Metals
GoldPlatinumSilver

12. Consumption Pattern

13. Region Preference

14. Business Model of Jewellers
BusinessModel
Hedging against future
Price-rise of Gold
Charging Pure Gold price
for low purity Gold
Making Charges of
Jewellery
Re Purchase of Old
Jewellery

15. BIS –Hallmark in Gold
Mark Gold Purity (Carat)
Level
958 23 carat
916 22 carat
875 21 carat
750 18 carat
585 14 carat
375 9 carat

16. Strength
1.About one million craftsmen are
associated with this industry. Their
skills can be utilized for designing and
making modern Jewellery
2.Supportive government on
industrial/ EXIM policy
3. Gold associated with Indian culture
Weakness
1. Small firms lacking technological
and export information
2. As major raw material
requirements need to be imported,
companies normally stock huge
quantities of inventory resulting in
high inventory carrying cost
Opportunities
1. Growing demand in South Asia and
Eastern countries
2. Luxury products uses gold and
diamond
3. India acting us outsourcing hub for
designing and manufacturing
jewellery
Threats
1. Fluctuating prices on gold and
rough diamonds
2. Competition from other countries
such as China, Israel and Belgium
SWOT
ANALYSIS

17. Government Policies
The Government of India has allowed 100 per cent foreign
direct investment (FDI) in gems and jewellery industry
In order to encourage more investments in the sector,
gems and jewellery SEZs have been set up in four
states: Maharashtra, West Bengal, Rajasthan and
Andhra Pradesh
Formal approval has been given to 13 SEZs in the
sector — three have got in-principal approval and
seven have been notified, as per the SEZ Board of
Approval statistics
The value limits of personal carriage of gems and jewellery
products in case of participating in overseas exhibitions
increased to US$ 5 mn

18. Major Players

19. About PlayersSomeListedPlayers
TANISHQ
GITANJALI
TBZ
RAJESH EXPORTS

20. Tanishq is one of India's largest, most
desirable and fast growing jewelry brand
in India
With retail sales of 8000 crore last year
and gunning for 10000 crores in 2014-15
Factory located at Hosur, Tamil Nadu, the
1, 35,000 sq. ft. factory is equipped with
the latest and most modern machinery

21. BusinessModel
Large customer
base
Online ordering of
gold
Gold harvest
Scheme
Global branding
strategy

22. One of the largest integrated
branded jewellery manufacturer-
retailer with turnover of $3billion
Distributes eight out of the top ten
jewellery brands in the country
Gitanjali’s extensive network of
own stores, shop-in-shops and
franchise outlets span across 300
cities

23. BusinessModel Developing channels
Strengthening the diamond
jewellery
Diversifying the range of
offerings
High margin markets such as
Japan and the USA

24. Operation
• It has 3 world-class diamond polishing
facilities in India with possessing production
capacity of 4,00,000 stones per month
• It has six jewellery manufacturing unit that
produce 2,35,000 pieces per month
• The Group’s international design hub is
located in Italy
• International manufacturing unit is in China

25. TBZ is a popular jewellery retail chain
that has its presence in almost 21 cities
in India.
TBZ was the first to offer buy back
guarantee on gold jewellery
The first to promote the concept of light
weight jewelry and the first to offer
certified solitaire diamonds

26. BusinessModel
Outsourcing the jewellery
Increase contribution of
diamond and platinum
jewellery business to their
total revenues
Invest in their marketing
initiatives and brand
building exercise

27. Operation
• 28 showrooms in 21 cities across ten states,
which have a total carpet area of approx
121,818 sq.ft
• It has a two in house diamond studded
jewellery manufacturing unit with an area of
17,739 sq ft and one gold refining unit with a
capacity of 4500kg in Mumbai
• TBZ sources gold jewellery from around 150
vendors across India

28. REL has one of the world's largest
jewellery design database of 29000
designs
REL is the lowest cost gold jewellery
producer in the world
REL also retails its products through its
own network of retail jewellery
showrooms Shubh Jewellers spread
across India

29. BusinessModel Customized options to
customers
SHUBH Service Centers
Middle man eliminated
Jewellery Production

30. Operation
• REL has a gold refining unit at Uttarakhand
and capacity of the refining unit is to refine
Four hundred tonnes of gold per annum
• REL has set up a state-of-the-art jewellery
manufacturing unit at Whitefield, Bangalore
which is the largest jewellery manufacturing
facility in the world
• REL has created an exclusive set of designs to
be sold at Shubh showrooms

31. Comparative Study
Tanishq Gitanjali TBZ Rajesh Exports
Stores 163 stores 101 Stores 28 stores 85 stores
Revenue
Rs. 8630.03
crore
Rs. 7,343.03
crore
Rs.1824.34
crore
Rs.29197.19
crore
Business
Strategy
22Ct and 18Ct
jewellery
Revenue from
High margin
markets
Light weight
jewelry
Export oriented
income
EBITDA
Margin
10.2% 5.39% 7.6% 13.85%
Inventory
Turnover
Ratio
2.83 6.97 1.61 40.44

32. Change in Trends
Traditional Practice Emerging Trend
Demand peaks during weddings and
festival seasons
They still remain the main demand drivers
but use as regular wearing and gifting has
evened out the demand throughout the
year.
Consumption of pure gold , preferred 22-
carat with traditional & ethnic designs
Light-weight and lower carat jewellery
preferred. Trend is more towards
fashionable and contemporary designs
Purchase from neighborhood jewellers
Growing preference for brands, retail
stores & e-retailing
Pre-dominance of gold (yellow)-based
jewellery.
Acceptance of white gold, platinum and
diamond-studded jewellery
Jewellery largely sold on prevailing gold
price, per gram, plus labour charges.
Branded players sell on a fixed-price basis