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Flow of presentation
Background of Indian jewellery Industry Changes taking place within the Industry Coping with these Changes Gazing at the Future Future requirements for the Industry Some example from Tanishq
Jewellery is amongst the largest and most broad based consumer markets in India
Rs Thousand Crores
Background
The Indian jewellery Industry is one of the largest domestically (and in the world) and has some unique characteristics Recent Changes in the Lifestyle goods industry and the diamond industry have created some opportunities and challenges The family jeweler segment is the largest segment of the market and hence most likely to be impacted by these changes If the industry needs to initiate changes at the firm or Industry level , the leaders need to agree on the challenges facing them and the strategies needed to cope with them
Fourth largest consumer market in the world Jewellery Market Size: Rs75,000 crores Diamond jewellery: Rs10,000 crores Largest market in terms of volume of gold India accounts for more than 22% of the total gold used for jewellery purposes
Growth
115
What s Changed
Gold as a share of wallet is decreasing in the younger generation. Traditional jewellery is still the dominant design pattern while contemporary styles are emerging fast Although guarantee of the retailer is important in ascertaining quality, hallmarking is gaining acceptance In the past choice of stores used to be 1-2 stores, but customers now look at 4-5 stores for range and choice of jewellery The main occasions to buy are still marriage and festivals Customers in the high value category are becoming more informed because of exposure to media and fashion trends
ndian Retail Market -2006 Retail Segments Organised retail making a Food & Grocery Clothing,Textiles & Fashion accessories Jewellery Catering Ser ices (F&B) Consumer Durables, Home appliances/Equipments Pharmacetuicals Furnishings, utensils, furniture - Home & Office Entertainment obile Handsets accessories & ser ices Footwear Books,Music & Gifts Watches Health & Beauty care ser ices TOTAL Valuedent Rs Crores 743900 113500 60200 57000 48100 42200 40650 38000 21650 13750 13300 3950 3800 1200000
Di I
L g J w ll y M nuf u l ll
+ ul C in g y ul
O n M k Di nd
Mining ni
ig H ld
2005
Despite its large size jewellery retail is unorganised and very fragmented
US Retail Scenario
ndependen s 53% 49% 49% Disc un s res 23% 20% 4% 1987 24% 20% 7% 1992 22% 20% 9% 2004 eweller Chain s res N n s re Re ailers
% Organised Retail
% Organised Retail
Manufacturing
Marketing
Retail
Unlik di i n l n g u u , l
w l
in f
w i liz i n
Manufacturing
Hallmarking - Standardization in Material quality is fast becoming a pre requisite especially for Gold jewelry In case of diamonds, Increased awareness of diamond quality ( 4 Cs) Special EOU in hubs like Mumbai (SEEPZ) which supply to stores across the world but face stiff competition from Hong Kong and China Platinum has few manufacturers in the country in comparison to Gold and Diamonds
Marketing
Creating Newer opportunities to buy jewelry Festivals like Akshay Tritiya, Occasions RakshaBandhan, Valentines Day etc like Mothers Day,
Fashion campaigns in vogue- Tanishq s Fashion Earrings, Colors of royalty Creating a desire in the Indian Woman to buy jewelry for its design value/for accesorisation/ to make a statement about her personality.
RETAIL
Retail Seduce the consumer in the retail space as competition is not only within jewelry category but categories like electronics, wellness services and luxury items
Evolve a distinct retail identity in terms of product, store look and customer experience
Trend of the speciality Jewellery markets/ malls Increasing traditional players renovating/refurbishing store spaces Concept of strong retail brand in jewellery industry gaining strength
1994-95
1million Households 29 million Households 48 million Households 48 million Households 32 million Households
1999-00
3 million Households 66 million Households 66 million Households 32 million Households 24 million Households
2006-07
6 million Households 75 million Households 78 milion Households 33 million Households 17 million Households
Projected Growth
Big Bazaar has already launched a gold section Departmental stores like Shoppers Stop have jewellery outlets
Transition
Mature
Strategies Cost cutting measures adopted by most jewellers Management of the distribution chain Alliances Risks Industry Restructuring Loss of customer trust Time
Consolidated
Fragmented
Strategies Creation of a local brand Use of innovative distribution channels Local alliances
Emergence of big brands and retail outlets, tremendous competition Increasing preference for ready-made garments, with rise in urbanization Increasing importance of Fashion, style and brand management
The rapid growth of the organized retail market was unforeseen in the apparel space, and this is predicted to continue growing the market as a whole
An industry that believed that individual customization that a family tailor offered was irreplaceable, found customers increasingly amenable to picking up off the shelf alternatives, now available in a wide range of design and size
Primarily driven by people who found they had a lucrative domestic market when fighting pitched battles in the export market
Success factors
Identification of valuable target segment and effective positioning Communication of differentiating factors Consistent communication Strong customer relationship management
Strong design capabilities Strong manufacturing support Strong product planning process Strong IT integration
Success factor
Strong retail management capabilities Strong franchisee management capabilities New avenues, e-tailing, mail order catalogue Strong IT integration
Efficient sourcing and procurement Efficient production & inventory management Efficient logistics management
Service Quality
Therefore
As the retail boom has arrived in the country, jewelry industry cannot ignore it. Will have to take giant steps so that can meet customer expectations and offer value to the customer which is higher than the material cost they pay for Separation of the ownership from the management in the jewelry industry Need for more specialized people in each of the above mentioned fields Immense opportunities for young professionals from varying fields
Retail has traditionally been regarded as a sales and distribution channel Brands - in FMCG, durables, fashion categories to dwell on their extensive retail distribution reach But, truly speaking, retail can impact the minds and hearts of customers as strongly as it can reach the vicinity of their homes Because retail can make the magic of brands come alive, in an environment that consumers can experience, feel and touch Retail can deliver the brand value proposition to consumers in a compelling yet cost-effective manner like
- Catalogs, take-one leaflets, online dialogue counters in the store can further enhance this process of speaking to the customer about key brand benefits - Within the retail space, the customer is captive audience as he listens to you and experiences your brand
Captivate
The first three Ss (showcasing, surround effect and speaking effectively) make the captivating magic of the brand come alive This is truly the moment of truth for every retail brand seduction, leading to consumer choice & purchase Magic, by its very nature, cannot be captured in words in our showrooms, 365 days a year the point of
but we see it
Communicating your brand values and your unique proposition to the customer.
CHALLENGE NORMS
Challenge existing norms and wake customers Taking a strong stance in our campaigns Education into why customers should buy into organised retail.