Indian Gems and Jewellery Sector

IN-DEPTH STUDY ON
INDIAN GEMS AND JEWELLERY SECTOR
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR Post Graduate Diploma in Management (PGDM)
2011-2013
ROLL NO. PG - 15 SUBMITTED TO DR. V.N. BEDEKAR INSTITUTE OF MANAGEMENT STUDIES, THANE
ACKNOWLEDGEMENT
I would like to gratefully acknowledge the contribution of all the people who took active part and provided valuable support to me during the course of this project. To begin with, I would like to sincerely thank Asst. Prof. Smita Jape, my faculty mentor at Dr. VNBRIMS who provided valuable suggestions, shared her rich corporate experience, and helped me script the exact requisites.
Indian Gems and Jewellery Sector
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STATEMENT BY THE CANDIDATE

I wish to state that the work embodied in this project titled In-depth Study on Indian Gems and Jewellery Sector forms my own contribution to management wherever references have been made to intellectual property of any individual/ institution/ government/ private/ public bodies / universities/ research paper, research books, textbooks, monographs, archives of newspaper, corporate, individuals, business and government, and any other source of intellectual properties viz. speeches , quotation, conference proceedings, extracts from the websites, working paper, seminal work et al. they have been clearly indicated duly acknowledge and included in Bibliography.
Signature of Candidate (Aishwarya Kelkar)
Signature of Project Guide (Assist.Prof .Smita Jape)
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INDEX
Sr. No.
1) 2) 3)
Topics
Introduction to the Gems and Jewellery Sector Objectives of the Study Structure of the Industry
Page No.
05 07 08
4) 5) 6) 7) 8) 9) 10) 11)
Gap Model in the Services Demand Drivers of the Industry Key Success and Risk Factors Policies Market Size Key Players Key Findings and Conclusion Bibliography
19 24 29 31 34 45 59 60
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INTRODUCTION TO THE GEMS AND JEWELLERY SECTOR

Indians have traditionally considered the purchase of jewellery as a symbol of savings and wealth. India has a history of craftsmanship in the jewellery sector and is a storehouse of skilled labor. In India, the gems and jewellery industry has been growing at a good pace and it accounted for 14% of Indias total merchandise exports in 2011-2012. India is the worlds largest diamond processing (cutting and polishing) country with an 80 per cent share in world market. Also, gold jewellery contributed to 30 percent of Indian jewellery exports, which totaled $43.14 billion in the fiscal year 2010-2011. The volatility of the price of gold has boosted the sales of platinum jewellery. Platinum was earlier considered expensive and only the rich indulged in it. Now, platinum jewellery prices are comparable to gold, creating a new set of consumers who are increasingly favoring the white metal. Though women are the key consumers, retailers are increasing their offerings to cater to the mens jewellery market as well. India is one of the eight key world markets, the others being the USA, UK, Middle East, Turkey, Japan, Italy and China. India is the also the largest consumer of gold in the world, and is estimated to hold nearly 16,000 tonnes of gold, accounting for nearly 12-15% of the worlds cumulative above ground gold stocks. India is also the largest diamond cutting and polishing centre in the world. The most significant aspect contributing towards the growth of this sector is Indias favorable trade policies. The gems and jewellery industry has an important role in the Indian economy. India is the largest market for gold jewellery in the world. Gold dominates the Indian jewellery market and formulates almost 80 per cent of the market share, which is followed by fabricated studded jewellery including diamond and gemstone studded jewellery. Further, India has emerged as the largest cutting and polishing industry for diamonds in the world. In fact, the two major segments of the gems and jewellery business in India are gold and diamond jewellery, as per an Exim Bank report.
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Moreover, Southern India is poised to be the biggest and the fastest growing jewellery market in the whole country. While Tamil Nadu and Kerala are known for plain gold jewellery, Andhra Pradesh and Karnataka have emerged as good markets for studded jewellery.
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OBJECTIVES OF THE STUDY:
To study the Industry with National and international aspects.
To study the future growth aspects of the Gems and Jewellery Sector.
To study the gap model of the services in the Gems and Jewellery Sector.
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STRUCTURE OF THE INDUSTRY Indian gems and jewellery sector is expected to grow at a compound annual growth rate (CAGR) of around 13 per cent during 2011-2013, as per a RNCOS report titled 'Indian Gems and Jewellery Market Forecast to 2013'. At present, Indian gems and jewellery market is highly fragmented, and is rapidly transforming into an organized sector due to the growing acceptance of branded jewellery market.
GOLD Gold with its intrinsic luster and ease of fabrication has always been the jewelers favorite metal and forms the backbone of the precious jewellery industry. India's culture and mythology embrace gold. India's traditions of unparalleled craftsmanship and skill are exemplified by its gold jewellery manufacturing, with the majority of pieces still made meticulously by hand. India is one of the largest consumers of gold in the world. Tribhovandas Bhimji Zaveri Ltd (TBZ) has marked its foray into Kolkata and East India by inaugurating two showrooms. In addition, TBZ further made its presence in Vapi, the biggest city in Valsad district of Gujarat, surrounded by Daman, Dadra and Nagar Haveli, by inaugurating its exclusive brand outlet. P Mangatram Jewelers showcased the world's lightest necklace, designed in 18k gold and embellished with precious stones, weighing just 3.5 grams at The India International Jewellery Show (IIJS) 2012.
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Value-Chain of Gold
Gold is a highly sought-after precious metal in the world. One of the oldest precious metal in the history of mankind, it had been used as money, as a store of value, in jewellery, in sculpture, in medicine, in electronics and for ornamentation. Gold does not tarnish, rust or corrode. Due to its wonderful qualities and its magnificent luster, gold is considered the most important metal in jewellery making. The purity of gold is measured in terms of karats. Pure gold is designated as 24 karat. A karat is the percent of pure gold in the alloy. One can determine the percentage of pure gold in any gold piece by dividing the karat by 24 (e.g., 18 karat gold: 18/24 = 0.750 = 75% pure gold). As pure gold is soft, it is frequently mixed or alloyed with other metals in order to make the gold harder to be used for jewellery. Also mixing of gold with other metals affects the color. For example, gold must be alloyed with different metals such as silver, nickel, palladium, copper, bronze and aluminum in order to get different shades of gold i.e. yellow gold, white gold, green gold. The karat scale is used for measuring the proportion of gold in jewellery. Accordingly, 24 karat denotes pure gold. 18 karat gold is 75 % gold and 25 % alloy, and so forth.
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Karat 24 22 18 14 10 9
Percentage Pure Gold 100 91.67 75.00 58.30 41.67 37.50
Fineness (European Marking) 999 917 750 583 417 375
In India, 18 karat and 22 karat are the most popular forms of gold jewellery. The 18 karat is popular because of its rich color and durability. Gold alloys can also affect the color of gold. The following list includes the most common colors of gold alloys and the metals used for producing them:
COLORED GEMSTONES The colored gemstones segment includes remaining forms of jewellery which includes precious gemstones like emeralds, sapphires, rubies and tanzanite; and semiprecious gemstones like silver, pearls, etc. Traditional Indian gemologists identified around 84 precious and semi-precious stones, amongst them nine stones form the Navratnas or the nine gems. Renaissance Jewellery, manufacturers and exporters of studded precious metal jewellery, were felicitated by GJEPC, at its 39th annual awards presentation at New
Indian Gems and Jewellery Sector Page 10
Delhi. Renaissance won the award for outstanding export performance under the category 'Studded Precious Metal Jewellery Exports'.
LUXURY JEWELLERY The Indian luxury market is still niche and is estimated to have grown at 20% CAGR through 2011. However, luxury jewellery is not a new concept in India and forms the largest segment of the luxury market. The key challenges faced by luxury jewellery makers are finding the right real estate, dealing with high rental costs, an import duty of up to 30% and loss from counterfeit pieces made by local jewelers. Initially, luxury stores were confined to luxury hotel galleries and international airports. However due to a growing clientele, opening luxury malls has become a viable option. According to a report by Euro monitor International, India has become the worlds third largest mens luxury jewellery market with a market size of 194.4 million USD in 2011 and estimated to grow at nearly 36% in 2012.*Even though the mens market is small as compared to the composite jewellery market, this growing segment provides an untapped opportunity.
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CLICK-AND-BRICK MODEL Jewellery is one of the growing sectors in online commerce. E-retailers offer better pricing options, greater variety, international patterns, third-party lab certification of all their products and easy payment schemes to gain a larger customer base. However, customers are still wary of the cut, quality and finishing of jewellery. To cut through this inhibition, eretailers are also opening physical showrooms to get consumer confidence. On the other hand, several organized players have also launched their online portals to reach out to shoppers who prefer the online medium. DIAMONDS Diamonds have always enjoyed a special place among precious gemstones. India has the distinction of being one of the first countries to introduce diamonds to the world. Earlier, diamond jewellery was limited to a very small elite segment of the population but now it has found way in various segments of consumers. Besides, India has emerged as one of the world's leading diamond cutting and polishing centres. The Gems and Jewellery Export Promotion Council (GJEPC) in collaboration with Moscow Diamond Bourse (MDB) organized the second edition of Indo-Russia Jewellery Summit in Mumbai. The Summit has been able to present tremendous opportunity for many visitors who came looking at India as a sourcing hub for the first time.
Value-Chain of Diamonds
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Gujarat is one of the major states in India promoting gems and jewellery sector as one of the thrust areas for development. Gujarat, having the largest human resource pool in the country in diamond cutting and polishing, accounts for 80 per cent of the total diamonds processed in India.
The Four C's of Diamond Value Four Factors - known as the Four Cs affect the value of every diamond: Clarity Color Cut Carat Weight
Clarity: A stone's relative position on a flawless-to-imperfect scale. Clarity characteristics are classified as inclusions (internal) or blemishes (external). The size, number, position, nature, and color or relief of characteristics determines the clarity grade. Very few diamonds are flawless, that is, show no inclusions or blemishes when examined by a skilled grader under 10x magnification. If other factors are equal, flawless stones are most expensive.
Color: Grading color in the normal range involves deciding how closely a stone's body color approaches colorlessness. Most diamonds have at least a trace of yellow, brown, or body color body color. With the exception of some natural fancy colors, such as blue, pink, purple, or red, the colorless grade is the most valuable.
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Cut: The proportions and finish of a finish of a polished diamond (also called make). Cut can also mean shape, as in emerald cut or marquise cut. Proportions are the size and angle relationships between the facets and different parts of the stone. Finish includes polish and details of facet shape and placement. Cut affects both the weight yield from rough and the optical efficiency of the polished stone; the more successful the cutter is in balancing these considerations, the more valuable the stone will be.
Carat Weight: The metric carat, which equals 0.200 gram, is the standard unit of weight for diamonds and most other gems. If other factors are equal, the more a stone weights, the more valuable it will be. CLARITY CHARACTERISTICS Blemishes Abrasion: tiny chips along facet junctions, producing white fuzzy lines instead of sharp facet edges.
Extra Facet: a facet placed without regard for symmetry and not required by the cutting style.
Natural: part of the original crystal surface remaining on the polished stone.
Nick: a
notch
near
the
girdle
or
facet
edge.
Pit: a
tiny
opening,
often
looking
like
white
dot.
Polish Lines: tiny parallel lines left by polishing; fine parallel ridges confined to a single facet, caused by crystal structure irregularities; or tiny, parallel, polished grooves produced by irregularities in the scaife surface.
Polish Mark: surface clouding caused by excessive heat, or uneven polished surface resulting from structural irregularities.
Rough
Girdle: a
grainy
or
pitted
girdle
surface,
often
with
nicks.
Scratch: a linear indentation normally seen as a fine white line, curved or straight.
Surface Grading: surface indication of structural irregularity; may resemble faint facet junction lines, or cause a grooved or wavy surface, often cross facet junctions. Inclusions Bearding: tiny feathers extending in from a bruted girdle (called hairline feathers on a polished or faceted girdle). Bruise: surface crumbling, often accompanied by tiny, root-like feathers. Cavity: a large or deep opening. Chip: a small or shallow opening usually on the girdle edge. Cloud: a hazy or milky area made up of a number of very small inclusions. Feather: a separation or break due to either cleavage of fracture, often white and feathery in appearance. Grain Center: a small area of concentrated crystal structure distortion usually associated with pinpoints (rare).
Included Crystal: a mineral crystal contained in a diamond. Indented Natural: a natural that penetrates the stone. Internal Graining: internal indications of irregular crystal growth; may appear milky, like faint lines or streaks, or may be colored or reflective. Knot: an included diamond crystal which reaches the surface of a fashioned stone. Laser Drill Hole: a tiny tube made by a laser; the surface opening may resemble a pit, while the tube usually looks needle-like. Needle: a long, thin included crystal which looks like a tiny rod. Pinpoint: a very small inclusion; under 10x, normally seen as a tiny dot, either singly or in groups or strings. Twinning Wisp: a cloudy area produced by crystal structure distortion, usually associated with twinning planes. COLOR GRADING Color is one of the Four Cs of grading diamonds, but just how important is it to you? Learn all you need to know about color, from D to Z.
Beautiful, fiery, rare and scintillating, diamonds are all these things, but in terms of color, they can be a confusing lot. That's because the ideal diamond, the one with the highest "D" color rating, is in reality totally colorless. It's this very fact of colorlessness that makes it valuable. When a diamond exhibits the slightest tinge of yellow or brown, its value drops quickly. At the same time, a diamond in a vivid color is known as a "fancy" diamond and fetches top dollar among aficionados and collectors. This is especially true for bright yellow "canary" diamonds and the glorious pastels of pink and blue diamonds. Essentially, there are three categories of diamonds: white diamonds, the kind most people want in engagement rings and jewellery; fancy natural colored diamonds, those beautiful
rarities reserved for special pieces and one-of-a-kind designs; and irradiated diamonds, stones given fancy colors with a little help from nuclear science. A true "Ideal Cut Diamond" is a round brilliant cut diamond that has been cut to AGS-0 Ideal Cut Proportions as defined in the following table: Table Diameter: 52.4 - 57.5% Crown Angle: 33.7 - 35.8 Degrees Pavilion Depth: 42.2 - 43.8% Girdle Thickness: Thin, Medium, Slightly Thick Culet Size: None, Pointed, Very Small, Small, or Medium
"Ideal Range" refers to round brilliant cut diamonds that have been cut within a range of variables similar to, but not as exacting, as Marcel Tolkowsky's original calculations and outside the parameters of EGL's "Tolkowsky Range" mentioned above.
Many "industry professionals" would agree that the following proportions are within the "Ideal Range" for a round brilliant cut diamond: 31.7 - 37.3 Crown Angle. Pavilion Depth of 41.2 - 44.8%. 52.4 - 63.5% Table based on diamond's overall diameter.
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The Color of Diamonds Hue: Pure, spectral (prismatic) color. Hues include gradations and mixtures of red, orange, yellow, green, blue, violet, and purple. Tone: A color's position on a colorless-to-black scale. Saturation: A color's position on a neutral-to-vivid scale. Fancy diamond: A diamond with an attractive natural body color other than light yellow, light brown or light gray. Treated diamond: A diamond with body color is induced by some form of artificial irradiation, often in conjunction with controlled heating (known as annealing). Coated diamond: A diamond colored by a surface coating which masks the body color body color; the coating may be extensive (entire pavilion, for example), but is more often limited to one or two pavilion facets or a spot on the girdle. Detecting Treated Diamonds Treatment Clues: Even, medium to dark, vivid green, blue-green, or blue body color. Treatment Proofs: Umbrella effect, colored pattern following facet junctions, colored ring around the girdle (green, yellow, brown, pink); radioactivity (radium green); brown, disc-like inclusions (radium green); fogs photographic film (radium green); electrically nonconductive (blue); 592 nm absorption line (green, yellow, most brown, pink). Natural Clues: Darker green or brown naturals or surface spots (light green, brown). Natural Proofs: Electrically conductive (blue). Detecting Coated Diamonds Examine the surface under high magnification (45x or more) in diffused or reflected light. Pay particular attention to areas near the girdle. The coating may have tiny pits or bubbles, and may be scratched with a probe; an orange filter may help. Other clues include subnormal brilliance and dispersion, an iridescent sheen or a lack of transparency when viewed table-down in the DiamondLite, or an odd look when compared to masterstones.
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GAP MODEL IN THE SERVICES SKILL REQUIREMENTS AND SKILL GAPS IN CUTTING & POLISHING OF DIAMONDS The following figure illustrates the profile of the people employed in the Cutting & Polishing of Diamonds (CPD) segment:
Large size units: MBA's/Engineers Small size units: Persons with 10-15 years of experience in the industry
Senior Management
Personnel certified from IDI,GII/persons with 7-8 yrs experience in the industry
Shop Heads/Supervisors
Shop Heads/Supervisors
Freshers,Personnel certified from IDI,GII/persons with 3-4 yrs experience in the industry
Operators
Operators
Operators
The following table presents the skill requirements and gaps across various functions and Hierarchical/reporting levels in the CPD segment: Function
Procurement
Level
Across levels
Skills Reqd.
Ability to foresee the yield from a rough diamond and procure rough diamonds that are expected to give the maximum yield Ability to decide the lot size and type of rough diamond to be procured based on the
Skill Gaps
Ability fluent to speak
English
personnel
employed
in this function are able to convey the point but take more
significantly
time for doing so
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market dynamics Ability to distinguish pure diamonds diamonds Ability to identify the right price of a rough diamond Ability to negotiate and get the best price for a rough diamond lot Ability to identify and price colored diamonds e.g. pink / blue diamonds which are rare Ability to keep a track of the changing trend/consumer preference e.g., there may be a move towards larger size diamonds, colored from synthetic
because
of
the
language barrier Ability to speak multiple languages for example, the of
knowledge
Flemish significantly helps when procuring rough diamonds from Antwerp
diamonds etc.
Ability to track the market in terms of what is selling plus what is being done by competitors
Assortment and Planning
Across levels
Ability to study a rough diamond and understand its characteristics so as to group similar together rough diamonds
Insufficient computer knowledge, especially planners unorganized sector among in
Ability internal diamond
to
understand of a
Fear / hesitation to adopt new practices or learn new tools like computers-this
structure and
accordingly
plan the cut along grains and not across grains to the extent possible Understanding of basic geometry angles, planes, Indian Gems and Jewellery Sector
can be attributed to the reason that a in
person this
working
industry Page 20
etc. so as to be able to categorize and plan rough diamonds appropriately Ability to minimize wastage and maximize yield (in
continues to perform almost activity his similar throughout in the
career
industry
terms of value) from a rough diamond i.e. the ability to take weight based / purity based planning decisions Ability to plan the cut so as to avoid inclusions
Lack
of
basic
knowledge of science and maths as most persons have limited education and
acquire skills in the traditional manner of learning by doing or by familial means.
(impurities) in the final CPD Ability to decide best type of cut round, marquis, prince, chowki etc. Basic computer knowledge (for e.g. what is hardware, software, how to open files, etc) for being able to use planning machines Ability to use computers (for e.g. mouse, CAD software, etc.) this skill is required for being able to use
planning machines Basic knowledge of science and maths(for e.g. the concept of parallel planes)
Ability to adapt to new technologies as they emerge this is critical for small size manufacturing units
now moving towards the usage of planning machines Cutting and Polishing Supervisor Ability to clearly understand concepts such as geometry
Personnel
generally
move up the ladder in Page 21
of
diamonds,
internal structures
the CPD segment an operator with 7-8 years of experience is generally supervisor, a and
diamond
(graining, etc.), technology being aspects used, of maintenance tools and
machines, etc. Ability to guide operators and provide direction in case of queries (e.g. what to do in the case of a etc.) machine from
he/she still does not understand concept the behind
technologies used
breakdown, operators
Ability to understand, follow and guide the operators as regards companys
policies and methods of working companies separate (e.g. may people some employ for the
different faceting / polishing activities, companies while may some employ
multi-skilled personnel for faceting / polishing a
complete diamond) Ability to manage operators Ability to take on-the-spot decisions e.g. in the case of machine breakdown Grading Across levels Ability to use a microscope to carry out detailed Training available courses are
observations on diamonds Technical understanding of the 4Cs (i.e. Cut, Clarity, Color and Carat) and other aspects such as fluorescence, Indian Gems and Jewellery Sector
expensive, and hence finding trained people is a challenge. This needs to be
understood from the Page 22
luster, etc. Good visual abilities to be able to compare the CPD with masters (say, to
context that a large proportion workers of are the from
those with a low education/income.
compare the color of the diamond) Ability to distinguish natural diamonds ones from synthetic
Training institutes in India are unable to maintain a large store of diamonds given
Ability
to
understand Institute of
the high value of the same thus students from such institutes do not have hands-on experience of all
Gemological
America (GIA)charts
aspects of a diamond /all types of
diamonds Trading (domestic / export) Across Levels Ability to feel the pulse of the market and understand what is selling when and why, i.e. the ability to understand market dynamics so as to price the diamond appropriately Ability to price the product based on an understanding of the capacity and Communication skills, especially
when dealing with customers from other countries Fluency in the
English language
Multi-language skills
willingness to pay off a jewellery manufacturer /
retailer (for sales to domestic market) Communication especially market Negotiation skills in skills the
export
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DEMAND DRIVERS OF THE GEMS AND JEWELLERY SECTOR Demand drivers of the Jewellery Segment The demand drivers for the jewellery fabrication segment are as below: Continuous traditional demand: Jewellery is an important constituent of the Indian culture. Traditionally in India, the demand for gold and diamond jewellery is driven by festivals and Weddings and there is remarkable historical and religious significance too. India is also the largest consumer of gold in the world. In marriages, gold jewellery is the gift preferred by the near relatives of the bride and the groom. Gold jewellery is very popular among farmers, with an upsurge in gold sales after a good agricultural season. Buying of gold is an important part of every stage of an Indian citizens life. Given the Indian culture, this stream of demand is thus continuous and is only expected to rise going ahead.
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Important savings and investment vehicle: Apart from its religious and social significance, gold is valued as an important savings and investment vehicle in India, and is the second preferred investment behind bank deposits. This can also be attributed to the fact that gold is highly portable, holds its value well in times of uncertainty and can be easily converted to cash either through sale or for guarantying loans.
Further, the emergence of use of jewellery as a fashion statement as well as for daily use and gifting has fuelled demand growth in the Gems and Jewellery sector. DEMAND DRIVERS OF THE DIAMOND SEGMENT The demand drivers for the diamond processing and jewellery sector are as below: Increasing acceptability of diamond jewellery in the domestic market: Traditionally, jewellery in India has mainly been gold jewellery. Diamond jewellery is lesser accepted in India due to factors such as myths associated with diamonds being unlucky in certain instances and the higher cost of diamonds. This is now changing with an increased acceptance of diamond jewellery in the domestic market. Diamond as a fashion statement for the affluent: Diamond jewellery is increasingly serving as a fashion statement for the affluent to differentiate themselves from others wearing traditional jewellery/gold jewellery. Increasing affordability: Employment of women in the workforce has been increasing due to the changing mindsets and increasing education levels among women. This has resulted in women having more impact on the purchase decisions; and women having also started purchasing jewellery for themselves as against earlier trends of jewellery purchase being primarily a family decision. Increased disposable income for working couples and lifestyle changes have aided this.
Exports as a driver: As seen earlier, exports have been growing year-on-year and the 5 year CAGR (2002-03 to 2007-08) is about 13%. India currently produces around 95% of the worlds cut and polished diamond pieces. By carat weight, India is estimated to process 80% of world rough production by volume and 58% by value. India is also now increasing its presence in the larger diamonds space. Value addition from processing to jewellery: Though India processes a large number of diamonds, most of them are re-exported after polishing. There exists scope to increase value addition through setting into jewellery (jewellery fabrication).
DRIVERS OF COMPETITIVENESS OF THE GEMS AND JEWELLERY SECTOR Industry standards, certification, and hallmarking: By and large, the Gems and Jewellery industry in India has been indifferent to the adoption and establishment of formal or informal industry standards. However, as the industry has grown and more and more businesses have started transacting on a global basis, a need has arisen for establishing standards. However, in India, one of the largest markets for precious jewellery, quality standards are conspicuous by their absence. Hallmarking is restricted to a minor portion of sales, with the bulk of the Consumers unaware of the exact caratage of the jewellery they buy. It is expected that the industry will see an increasing level of adoption of hallmarking in gold and certification in gemstones and this is critical to its competitiveness.
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Processing of larger size diamonds: The Indian Gems and Jewellery industry has been built on polishing lower size and quality stones. Looking forward, since India already enjoys domination in the world CPD market in general, and for smaller-sized diamonds in particular, the scope for significant increase in market share and growth in the traditional small-size diamond exports is limited. Industry leaders are now seeking further growth through processing of larger size stones, and manufacture of diamond jewellery. Indian industry can now increasingly process the full range of sizes and qualities of stones utilizing not only a cheap and abundant workforce, but also advanced technologies. Future growth is likely to be largely driven by the cutting and polishing of medium and large stones (currently dominated by Belgium and Israel), with consequently higher unit realizations. The Indian Gems and Jewellery GJ industry is already reporting increased growth in the larger-size segment. Export data from the GJEPC also reports a gradual shift in Indian exports to higher value segments, reflected in higher per carat realizations. Larger-sizes command higher per carat realizations and profits. Availability of labour at competitive wages: Labour is a critical component in the value chain of the Gems and Jewellery sector. Labour in India, as compared to other countries, is cheap, and India thus stands at an advantage over its global competitors in this industry. Availability of skilled manpower is a key strength that has enabled growth in Indias Gems and Jewellery sector. India has a large pool of skilled artisans with vast traditional knowledge and expertise in jewellery making. It also has the largest resource pool in diamond cutting and processing. India also has a good blend of technically trained designers who are well-versed in latest 2D and 3D design software. India also has one of the lowest costs in diamond cutting.
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Government Support: The Indian Government has supported the Indian Gems and Jewellery sector with policies such as waiver of customs duties on the import of rough diamonds, permission for personal carriage of jewellery through Hyderabad and Jaipur Airport as well, in addition to Delhi, Mumbai, Kolkata, Chennai and Bangalore, establishment of Gems and Jewellery SEZs, etc. This continued support is critical to the competitiveness of this industry.
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KEY SUCCESS FACTORS AND RISK FACTORS OF THE GEMS AND JEWELLERY SECTOR
KEY SUCCESS FACTORS Movement from unbranded to branded jewellery and increase in fashion dictated buying: Over 90% of the jewellery sold in India, is mainly sold by traditional family jewelers and the unorganized sector contributes to about 96% of the total jewellery sales in the country. Thus, currently the Indian market remains highly fragmented. This scenario is seen to be changing, though slowly, with the entry of players such as Tanishq and Gitanjali, and the trend of supermarkets like Lifestyle and Shoppers Stop having jewellery outlets. Hallmarking and Certification: Increasing consumer awareness and need for certification by BIS and hallmarking have served as a means for firms to differentiate themselves in the market.
Increased use of technology: The Gems and Jewellery business had traditionally involved a large content of manual labour. Though this still remains the case, a greater use of technology is seen in this industry. For example, factories have started using more machine-made designs, laser soldering is replacing manual soldering, investments in modern manufacturing and quality systems is increasing, etc.
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Transformation from family owned businesses to professionally managed businesses: Traditionally in India, the majority of Indias diamond workforce is employed by small units that process diamonds on a job-lot basis. At the low-end, family units processes diamonds/ make jewellery. Even at the retail end of the value chain, people in India generally buy jewellery from their family jewelers. This structure makes it less possible to bring in professionalism into the industry, which will be key going ahead given the threats from other diamond processing/jewellery making nations. Thus for firms in the Indian Gems and Jewellery sector to prosper, a transformation from family owned businesses to professionally managed businesses is critical.
KEY RISK FACTORS Limited Standardization: In India, jewellery consumption is primarily of gold. The bulk of the Indian jewellery buying is still rooted in tradition, and jewellery is sold in traditional designs. Gold jewellery is also bought as an investment. In the present system of selling gold jewelry in India, the purity may or may not be standard and the buyer can lose - cheating on caratage (and purity) is widespread. Possible Long-Term Threat from China: Although India currently enjoys dominance in the worlds cut and polished diamonds market, China may emerge as a viable rival, if not in the near term, certainly in the longer term. An increasing number of diamond processors from Israel and Belgium, and even India, are setting up facilities in China, for reasons like the cheap and disciplined labor force, significant increase in potential consumers in the high income segment within the country and the steadily improving quality of Chinese workmanship. Technology is another area where the Indian industry faces a long-term threat from China. Threat from Polishing in Producing Nations: The preference for polishing diamonds in the producing countries has been seen to be growing. There has been increased political pressure by major diamond producing countries in Africa to gain further benefits from diamond production through jobs creation in a domestic cutting and polishing industry.
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POLICIES EXPORTS The total gems and jewellery exports from India during April 2012 to September 2012 stood at US$ 19,902.47 million, including that of cut and polished diamonds at US$ 7,824.75 million, gold at US$ 10,717.71 million and colored gemstones at US$ 167.13 million, besides others, according to the provisional data by Gem & Jewellery Export Promotion Council of India (GJEPC). The domestic jewellery market is pegged at about US$ 16 billion-US$ 18 billion. The industry is also a leading foreign exchange earner accounting for more than 12 per cent of India's total exports, as per an industry body report. The gems and jewellery industry in India registered considerable growth in its volume of exports from US$ 25.4 billion in the 2009 to US$ 46.36 billion in 2011, a net growth of 82.5 per cent.
FOREIGN TRADE POLICY (27TH AUG. 2009 31ST MAR. 2014) As per FTP 2009-2014: (a) Import of gold of 8k and above is allowed under replenishment scheme subject to import being accompanied by an Assay Certificate specifying purity, weight and alloy content. (b) Duty Free Import Entitlement (based on FOB value of exports during previous financial year) of Consumables, Tools and additional items allowed for: (i) Jewellery made out of: a) Precious metals (other than Gold & Platinum) 2% b) Gold and Platinum 1% c) Rhodium finished Silver 3%
(ii) Cut and Polished Diamonds 1% (c) Duty free import entitlement of commercial samples shall be Rs. 300,000. (d) Duty free re-import entitlement for rejected jewellery shall be 2% of FOB value of exports. (e) Import of Diamonds on consignment basis for Certification/ Grading & re-export by the authorized offices/agencies of Gemological Institute of America (GIA) in India or other approved agencies will be permitted. (f) Personal carriage of Gems & Jewellery products in case of holding/participating in overseas exhibitions increased to US$ 5 million and to US$ 1 million in case of export promotion tours. (g) Extension in number of days for re-import of unsold items in case of participation in an exhibition in USA increased to 90 days. (h) In an endeavor to make India a diamond international trading hub, it is planned to establish Diamond Bourse(s).
GOVERNMENT INITIATIVES India appears as a very attractive opportunity for major brands to establish their presence. The growing domestic market in India along with export advantage of the industry and the Government's decision to allow foreign direct investment (FDI) up to 51 per cent in single brand retail stores have attracted various foreign players to the Indian market.
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The Government of India has cleared three FDI proposals including that of Italian jeweler brand Damiani, to set up stores in India under the single brand retail policy. The firm will set up a 51:49 joint venture (JV) with Mehta's Pvt. Ltd, as per a Ministry of Finance official. FOREIGN DIRECT INVESTMENT POLICY The Government of India allows 100 per cent FDI in gems and jewellery sector through the automatic route. For exploration and mining of diamonds and precious stones, FDI is allowed up to 74 per cent under the automatic route. For exploration and mining of gold and silver and minerals other than diamonds and precious stones, metallurgy and processing, FDI is allowed up to 100 per cent under the automatic route.
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MARKET SIZE OVERALL JEWELLERY RETAILING INDUSTRY IS VALUED AT RS 973 BILLION The overall jewellery retailing industry is valued at Rs 973 billion and within the jewellery industry; the share of gold jewellery is estimated to be around 80 per cent. Diamond jewellery holds the second largest share of around 15 per cent with other precious metals and stones accounting for the remaining 5 per cent. 2009-10: Overall market size (Rs 973 billion)
Source: Industry; CRISIL Research ORGANIZED RETAILING PENETRATION (ORP) IN JEWELLERY IS
ESTIMATED AT 10 PER CENT Traditionally, the jewellery retailing industry in India has been dominated by small familyrun businesses. It is estimated that there are over 300,000 jewellery retail outlets across the country, indicating a high degree of fragmentation. Also, the market has traditionally been dominated by gold jewellery. Recognizing the large untapped potential for organized retail within this space, Tanishq (part of Titan Industries, a Tata group company) was the first
major player to make an entry into the branded jewellery retail space in 1996. Subsequently, many regional players have entered into the organized segment. Players like Joy Alukkas, Kirtilal Kalidas, Sri Ganesh, and Tribhovandas Bhimji Zaveri have been expanding their presence across geographies by setting up similar format stores. In spite of intense competition from the established unorganized players who have a strong foothold in almost all markets across the country; organized players have been successful in establishing their presence. This has been achieved by engaging consumers by offering new and contemporary designs, hallmarking (providing a guarantee of the purity of raw materials used), and aggressive marketing. Consequently, organized retailers have expanded their presence within this segment. In 200910, the contribution of organized segment to the jewellery retailing industry is estimated at Rs 97 billion, resulting in an ORP of around 10 per cent. CHANGING CONSUMER PREFERENCES AND HALLMARKING DRIVE ORP The rapid growth being witnessed in the organized segment of jewellery retailing is driven by a number of factors:
The unique selling proposition of organized retailers in this segment is the quality certification (hallmarking- in jewellery parlance). Owing to the prevalence of
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adulteration of gold with base metals; in some parts of the unorganized segment, organized players have gained significant leverage by providing certificates of quality for the goods sold at their outlets. Some players have even made available karat meters in their stores whereby consumers can verify the purity of gold being used.
Most organized retailers have laid high emphasis on jewellery designing, providing consumers with a wider range of designs tailored for diverse purposes beyond the traditional Indian wedding jewellery.
Ornamental daily-wear jewellery has rapidly gained acceptance and popularity in the Indian market. Similarly diamonds have rapidly gained importance. Organized players have capitalized on these trends, entering both of these emerging markets in an attempt to boost their market share.
Enhancing the overall consumer experience by providing a better ambience in the showrooms.
Most players have also adopted aggressive marketing strategies in order to attain visibility and brand value within the highly competitive jewellery retailing space.
NCR RANKS THE HIGHEST IN ORGANIZED RETAIL PENETRATION
The relative organized retail penetration of the other cities by taking NCR as a base (NCR indexed to 100) is given below:
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REVENUE AND COST ANALYSIS The jewellery retailing industry is characterized by low margins and high raw material costs. Traditionally, jewellery retailers charged raw material cost plus making charges' as a fixed rupee amount per unit of raw material for an article of jewellery to the consumers. However, some large branded jewellery retailers have started charging making charges' on a per piece' basis. Some retailers have also begun linking making charges' to raw material price by quoting a fixed percentage on the raw material cost. This enables them to earn higher margins in case the raw material price increases.
GOLD
JEWELLERY
CONSTITUTES
THE
LARGEST
COMPONENT
OF
RETAILER REVENUES The domestic jewelry industry has historically been dominated by gold jewellery. Despite the increasing popularity of diamonds in the recent years (buoyed by the entry of organized players and aggressive advertising campaigns) gold jewellery still accounts for a lions share of revenues from jewellery retail outlets. On an overall basis, gold jewellery accounts for 80 per cent of the overall sales in the industry. While certain stores in large cities sell exclusively diamond jewellery, it has been observed that the contribution of diamond jewellery to the overall industry sales varies from 25-30 per cent in large cities to as low as 5 per cent in small cities. The share of diamond jewellery to jewellery retail sales in small cities is relatively low.
RAW MATERIAL COST FORMS THE LARGEST COST COMPONENT
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The largest single constituent of cost for jewellery retailers is raw material cost (cost of gold/polished diamonds). The gross margins earned on gold jewellery are in the range of 8-10 per cent whereas for diamond jewellery, these margins are as high as 40-45 per cent. Consequently, the product mix for jewellery retailers is a key determinant of profitability. The chart given below depicts the cost break-up of an organized jewellery retailer having a 70:30 share of gold and diamond jewellery (by value): Cost break-up of a typical jewellery retailer
Source: CRISIL Research, Company Annual Reports, Industry Sources Other major costs include employee cost (accounting for approximately 8 per cent of sales) and administrative overheads and selling cost (which account for a further 8 per cent of sales).
PROJECT ECONOMICS While the opportunities for organized jewellery retailers are high, the business is characterized by low margins and gestation periods are usually in the range of 3-4 years. Organized jewellery retailers located in large cities generate higher Internal Rates of Return (IRRs) than stores in smaller cities. This is mainly due to the product mix of stores located in large cities which have a higher share of diamond jewellery (which generates significantly higher margins).
JEWELLERY OUTLETS IN LARGER CITIES GENERATE HIGHER RETURNS DUE TO HIGHER SHARE OF DIAMONDS Retail outlets in larger cities generally have a higher share of diamond jewellery in their product mix; in addition, it has been observed that the average number of transactions per day is also higher despite larger ticket size (as compared to smaller cities), owing to the presence of a greater number of households with higher disposable incomes. As a consequence of larger ticket size (due to higher share of diamond jewellery) and a higher number of transactions per day, revenues generated out of jewellery retailing per square foot are higher in large cities. Thus, in spite of larger store size and higher lease rentals (rupees per square foot per month) which result in a higher cash outflow, retail outlets in larger cities generate higher returns. Internal Rates of Return (IRRs) over a 20 year period generated by stores in larger cities are likely to be around 15 per cent, as compared to around 10 per cent for smaller cities.
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Project
returns
Source: CRISIL Research JEWELLERY RETAILING ENTAILS A LONG GESTATION PERIOD Retailers across verticals typically face long gestation periods for their projects. This is mainly because retailing (including jewellery retailing) is a low margin business. In case of jewellery retailing, profits earned by large organized players are exclusively on making charges. Apart from this, brand establishment is a long process and it can take 3-4 years for a retailer to establish a presence in a market, due to the highly fragmented jewellery retailing market.
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PRODUCT MIX AND LEASE RENTALS KEY DETERMINANTS OF RETURNS While most operational parameters in the industry such as employee and selling costs as percentage of sales remain largely constant throughout the industry, the two key factors determining the returns generated by an outlet are:
Product
mix:
- Gross margins earned on diamond jewellery vary between 40-45 per cent as compared to 8-10 per cent for gold jewellery.
- Consequently, retail outlets which are able to garner a higher share of diamond jewellery in their sales mix earn higher gross margins.
Lease
rentals:
- As is the case with all retailing verticals, location is an important cost decisive factor for jewellery retailing also. High street locations, which attract higher footfalls and larger ticket sizes, command far higher lease rentals
- As a result, the trade-off between revenue generated per square foot and lease rentals is another key factor in determining project returns. SENSITIVITY OF IRRS TO PRODUCT MIX
Source: CRISIL Research

EMPLOYMENT The sector currently provides employment to around 1.8 million people which in itself is significant. In comparison the IT/BPO sector (which is also people intensive) employs a similar number but majority of the workforce does not come from the economically weaker sections of the society which is the case with Gems & Jewellery. In the next 5 years the sector should create additional employment for around 1.1 million people. MONDSET AND MANPOWER In order to tap the growing opportunity, the sector needs to attract and groom professionals at all levels Managerial and Skilled workers. The sector so far has not caught the attention of the managerial resources be at senior level or at entry level unlike other consumer product segments like FMCG, Durables or Retail for that matter. The issue perhaps also stems from the fact that the majority of players operating in the sector have still not adopted the best practices from the corporate culture. The industry can perhaps take a leaf out of the book of institutes like NIFT which have done exceedingly well for their industries. Government and Apex bodies could act as facilitators in broadening the outlook of the exporters /players and help them in familiarizing with the changing scenario both in the domestic and international fronts, where moving up the value chain and adoption of modern practices has become compelling imperatives. FINANCING OPTIONS A good funding instrument has one or more of the following characteristics: Easy to access Friendly terms (interest, collateral, repayment etc) Tailored to specific needs of the borrower
As shown in the figure below there are innovative financing options at the retail end. Imparting industry status to the sector can help a long way in facilitating the flow of much needed finances to retail.
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The five-day long 29th edition of the Indian International Jewellery Show (IIJS) event organized by GJEPC, witnessed the participation of over 800 companies from India and overseas and received 20,000 pre-registration from national visitors and over 3,000 from international visitors. The event had a congregation of delegations from trade associations across India and from a host of international destinations like Bangladesh, China, Dubai, Hungary, Iran, Japan, Malaysia, Nepal, Poland, Russia, Saudi Arabia, Singapore etc. IIJS displayed the widest range of gems and jewels under the categories of couture, loose diamond, plain gold jewellery, mass produced, allied, machinery and international jewellery and loose diamonds.( Exchange rate used: INR 1= US$ 0.01839 as on November 7, 2012) JEWELLERY AND FASHION ACCESSORIES - LARGELY UNORGANIZED MARKET Jewellery in India is retailed mainly through three formats: national stores, regional stores and local mom and pop stores. It is estimated that over 300,000 jewellery outlets exist in the country, with most of sales being carried out by unorganized retailers. Although the organized jewellery retailing pie is quite small, it is growing rapidly. One of the main drivers for a rapid increase in organized retail is the lack of standardization. Hallmarking is not mandatory in our country and jewelers don't certify their jewellery items. Even today, jewellery is largely purchased on the basis of 'trust' exhibited by customers. As a result, households make purchases from jewelers known to them. In order to build trust, jewelers have come up with buy-back offers and purity assurance.
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In the metro and bigger cities, the mindset of the consumer has changed in past few years. Organized retail offers a wide choice of designs to allure the consumer. Organized retailing in this vertical first began with the launch of the Tata-owned 'Tanishq' brand. Apart from these, national brands such as 'Oyzterbay', 'TBZ', 'Carbon', 'Swaroski', etc have set up shop in major cities and have been gaining popularity gradually. Jewellery is also retailed through department stores. Fashion accessories, which include trinkets and small gifts, are impulse purchase items. They need to be displayed in the retail outlet in such a way that customers pick them up while shopping for other products.
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JEWELLERY- PLAYERS
KEY PLAYERS
SHRENUJ & CO.
GITANJALI GEMS LTD.
TANISHQ (TITAN INDUSTRIES LTD.)
SHREE GANESH JEWELLERY HOUSE PVT.LTD.
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SHRENUJ & CO. OPERATIONS: The performance of the Company was commendable with 30% increase in sales revenue to Rs. 20,241.65 million (Rs. 15,542.10 million). Net profit registered a growth of 12.6% to Rs. 343.55 million (Rs. 305.20 million). The increase in revenue is a reflection of the Company's impetus to acquire greater market share during the economic downturns. With the gradual recovery in US and a few other major markets your company helped in achieving its revenue target for the year. The Company has recorded satisfactory growth, looking to the depressing global economic scenario. US and European operations were affected by the subdued consumer sentiments. The strong management bandwidth, sustainable business strategy and ability to respond to the evolving market dynamics were responsible for the improved performance.
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Revenues from retail and branded jewellery operations have recorded an impressive 40.78% growth in FY 2011-12, rising to Rs. 2,245.59 million (Rs. 1,595.10 million). Company's retail brand "Diti", continued to expand its footprint at a rapid rate, with 175 points of sale in 29 cities across India. International branded jewellery collections of Shrenuj were well received and also contributed to the improved operating margins. The consolidated sales revenue rose by 28.25% to Rs. 31,505.85 million (Rs.24,565.15 million). Net profit registered a gain of 23.74% to Rs.703.40 million (Rs. 568.45 million). EPS for the period (Basic & Diluted) was higher at Rs. 9.25 (Rs. 7.50) per share (face value of Rs.2/-). The expansion of Companys diamond manufacturing bases in Botswana and South Africa during the past two years has helped to achieve these results, despite challenging market conditions and volatility in the rough diamond prices. DIVIDEND: The Board of Directors has recommended payment of a higher final dividend of 32.50% i.e. 65 paise per share on 76,592,308 Equity Shares of Rs. 21- each, for the year ended 31st March, 2012. The dividend will entail an outflow of Rs.57.86 million (including dividend tax of Rs.8.08 million) on the paid up equity share capital of Rs.153.18 million. The payment of dividend is subject to the approval of the Members at the ensuing Annual General Meeting of the Company.
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PROSPECTS: Shrenuj's business is built on three core values: Heritage, Innovation and Passion. The Company's goal is to manufacture and market high quality diamond products that excite and attract consumers. Shrenuj is committed to improving processes, continuously investing in the best technology and developing a highly skilled workforce. The Company distributes its loose polished diamonds and diamond jewellery products to all the major global consumer markets to create a global balance reducing its exposure to any one market, and retaining flexibility to capture opportunities as demand changes. The Company has a network of sales offices around the world. Each local office has an intimate knowledge of its market needs, and strives to offer the best possible service to its customers.
During the year the Company has commissioned a new diamond cutting and polishing unit in South Africa. The unit is equipped with state of the art technology to produce best in class diamonds. This new unit would augment the Company's manufacturing capacities in India and Botswana and help in servicing the growing needs of the Company's downstream marketing activities. The Company continues to focus on more value addition within its value chain in the coming years, with an expected share of about 50% revenue being generated by jewellery, franchising and retail segments by 2015.
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A diamond ring named "Tsarevna Swan", which made it to the Guinness World Records as a ring studded with the most number of diamonds, exclusively supplied by Shrenuj to Classic Jewelry House of Kiev, Ukraine. The ring is studded with a total of 2,525 diamonds in miniscule size with a total weight of 10.48 carats. The Company has completed market research for a niche diamond jewellery product in the US market. The results are very encouraging. The new product line is based on a very special cut, proven by leading gem-testing laboratories to be the most brilliant diamond in the world. The Company plans to launch this new brand in mid 2012 at about 250-300 stores of a major jewellery chain store across US. These products will help to project Shrenuj as a market leader in this most discerning market. SHARE CAPITAL: During the year, Issued, Subscribed and Paid-up Share Capital of the Company has increased from Rs. 151.97 million to Rs. 152.82 million. The Company has issued and allotted 424,600 equity shares of Rs.2/- each to its employees on exercising stock options granted to them under the Employee Stock Option Scheme, 2006. FIXED DEPOSITS: During the year under review the Company accepted fixed deposits of Rs. 8.50 million from the public. The fixed deposits outstanding as on 31st March, 2012 were 16.50 million.
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HUMAN RESOURCE MANAGEMENT: Shrenuj & Company Limited is an integrated gem and jewellery conglomerate having presence across 15 countries with activities ranging from diamond processing, jewellery manufacturing to branding and retailing. It employs over 2,500 people in its worldwide operations. Shrenuj Group's state of the art diamond manufacturing facilities in India, Botswana and South Africa specialize in processing high quality diamonds. The Company's key to success and growth is its band of employees who are recruited on merit and subjected to intensive training.
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GITANJALI GROUP Gitanjali Group was established in 1966 and is one of the earliest diamond houses in India. Having received over 50 National and Council awards from the Ministry of Commerce, India for outstanding exports, it is today one of the leading diamond and jewellery export companies in India. Gitanjali, a $900 million multinational group, is a Public Listed Company. Gitanjali's unique business model encompasses a wide range of activities like rough diamond sourcing, diamond manufacturing and distribution, jewellery manufacturing, jewellery branding and jewellery, lifestyle and watch retailing at the domestic and international level. The Group has its business spread across the globe including countries like USA, UK, Middle East, Thailand, Belgium, China, Japan, Italy and South East Asia. Gitanjali's firsts include: Introducing the concept of affordable branded diamond studded jewellery in India. Offering jewellery in Superstores, Department Stores and other such retail outlets at MRP. Offering the same quality, designs and prices throughout India with a certification of authenticity for the same from renowned diamond grading laboratory. Producing the smallest heart shaped diamond (0.03 carat). A mail-order catalogue for branded diamond jewellery. Gitanjali Luxury Lifestyle Festival a unique celebration for International Luxury and Lifestyle products.
JEWELLERY The Gitanjali Group, as a modern integrated conglomerate, produces a diverse range of jewellery: gold, silver, platinum and stainless steel, studded with diamond and other gems.
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TYPE Gitanjali produces a vast diversity of jewellery. These include Classic, Indian Traditional, Contemporary, Ethnic and Casual designs, under multiple brands and collections, and targeted at specific consumer and price segments. MANUFACTURING With its high output of mass produced jewellery for domestic and global markets, the Group has a stake in high precision in manufacture of sophisticated designs. Accordingly, its design studio and works are equipped with the latest CAD/CAM processes and EDP for optimal efficiency in production and deliveries to its diverse markets. At the same time, it also has master artisans, in India and abroad, to produce prototypes as well as handmade jewellery of high excellence. WHOLESALING As with diamonds, the Group sells a large part of its output of jewellery on a wholesale basis to merchant jewelers, under their own store brands, and to retail chains. These include all classes and types of jewellery.
TECHNOLOGY Besides CAD/CAM processes in design and manufacture, the Group applies the most stringent international standards to test and certify the quality of its output, with the metal Hallmarked and gems certified by the relevant global authority.
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DIAMONDS What started as in 1966 as a modest enterprise in diamond cutting and polishing is no longer just a vendor to the mighty but a $ 900 million group of businesses. But it all started with diamonds. SOURCING As one of the worlds leaders in the diamond and diamond-studded jewellery business, the Gitanjali Group principally sources its diamonds through DTC.However, with the development of independent sources globally, some part of its resources are also devoted to them. At Antwerp, Belgium, the worlds diamond capital, the Group runs a centralized operation to sort diamonds for various operations.
PROCESSING Diamonds are processed at the Groups units at Surat and Borivli in India, Bangkok in Thailand, and Qingdao in China. Recently its unit at Hyderabad SEZ it has gone also on stream. WHOLESALING The Group markets the major portion of its processed diamonds in loose form to merchant jewelers and jewellery houses worldwide. In the form of diamond-studded jewellery, it sells wholesale to marketers of branded jewellery. It also has brands of its own that are marketed only in B2B mode. The Antwerp operation provides a two-way channel for processed diamonds for the Groups customers as well as for its own conversion to jewellery.
TECHNOLOGY The Groups units deploy state-of-the-art technology to process all classes and sizes of diamonds: the Group has the distinction of producing the worlds tiniest heart-shaped diamond at 0.03 carats, as well as 25 patented facet-patterns.
Besides technology for manufacture, it uses the very latest devices and metrics to assay and certify the quality of the gems it uses and sells to the strictest international norms set by GLC.
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TANISHQ Tanishq was coined from a combination of Tata/Tamil Nadu and Nishq (meaning a necklace of gold coins) and, again, from Tan, meaning body and Ishq, meaning love. It was launched in 1994 as a range of jewellery and jewellery watches meant for the European & American markets. But things began to change globally around this time, and the West entered a protracted period of slow economic growth followed by recession. Supplying jewellery to the Americans & Europeans suddenly no longer seemed an attractive proposition.
Tanishq Titans flagship line of jewellery is today a resounding success with discerning customers. Tanishq has performed exceedingly well and has set standards, in what could best be described as a largely unorganized and unscrupulous jewellery market. The growth of the brand has once again been a testament to our customer focus. Tanishq is today a hallmark of trust, an island of purity. It is a certified division under the ISO 9001:2008 Quality Management System Standards and the current version of Environment Management System standard is ISO 14001:2004.
Tanishq is India's fastest growing jewellery brand with a premium range of jewellery, studded with diamonds or colored gems in 18-karat gold, 22-karat pure gold and platinum jewellery. One of India's largest speciality retailers and are transforming Indias jewellery market with a pan - India presence. Titan felt a need and created a means to offer elegant gold
jewellery to smaller towns and rural markets. The recent launch of a retail initiative Goldplus caters to the need.
Both brands contributed to over Rs.450 million USD, and are still flourishing. Truly a phenomenon in itself, Tanishq is our pioneering Indian brand storming a market of over 400,000 independent jewelers. The brand is evolving faster than the market and is either leading or closing gaps between competitors in urban markets where we have a presence. The trust connotations that the Tata - Titan association evokes, never fails to attract increasing numbers of jewellery seekers to the fledgling designer brand. Titan ensures that they are spoilt for choice, transparency and a great shopping experience with Tanishq, the jewel of its crown. Tanishq is a trustworthy, popular jewellery brand from Indias largest integrated jewellery manufacturer.
Titan Industries GoldPlus is designed for the jewellery preferences of the semi-urban and rural Indian customer. With a presence in over 31 towns spread across 5 states, GoldPlus is the largest jewellery retail chain in Tamil Nadu. In addition to gold jewellery, the brand also offers impressive designs embellished with diamonds, American diamonds (Cubic Zirconia) and other precious stones. The GoldPlus jewellery comes with the assurance of purest 22-karat (916) and 18-karat (750)
gold and premium craftsmanship. Every Gold Plus product is endorsed by a certificate that states the purity of the gold and the quality of diamonds used in the article. The elaborate and intense quality checks during the manufacturing process ensure the purity of gold and a perfect finish. The gold is purchased in the form of bars from only those banks that are certified by Reserve Bank of India (RBI). Using this gold, jewellery is crafted in Titan Industries manufacturing units in Hosur, Tamil Nadu where hi ghly skilled artisans create traditional and modern designs.
INTEGRATED SUPPLY CHAIN MANAGEMENT Titan Industries set up its jewellery manufacturing unit in 1994 with advanced technical know-how from the UK, Germany and Switzerland. Over the years, the jewellery division has transformed the unit into a highly integrated jewellery manufacturing and outsourcing facility. Today, Tanishq and Goldplus have grown to be the most reliable jewellery manufacturing brands in India. Titan Industries is a pioneer in establishing standards for consistent delivery of jewellery products, necessary for caratage. The product development cycle is based on stateof-the-art CAD/CAM technology that enables seamless integration of various stages: styling, three-dimensional solid modeling, engineering design, tool design, tool making and prototype making. ISCM is backed by high-end machinery such as Vacuum Melting unit, Rapid Proto Typing machine, and fully automated precious stone sorting machine, 99.99 % fine gold refining system and computerized color matching machines that make the division most advanced in the industry. To maintain the quality standards, ISCM has implemented the ISO 9001:2008 standards and put various initiatives in place: ambitious targets, customer initiatives, and employee initiatives. With ISO 14001:2004 ISCM implemented, ISCM provides better work environment and upgrades the environment outside the manufacturing unit. A dedicated Technology Cell has also been established to ensure that cutting-edge technology is constantly tracked and infused into the business. The division's technology efforts have been widely recognized by the industry: the Karat meters pioneered by Titan Industries jewellery division has gained widespread acceptance, and the Goldmine system is considered one of the first successful .net initiatives in retail in India.
SHREE GANESH JEWELLERY HOUSE PVT. LTD. Shree Ganesh Jewellery House (I) Ltd. (name of the company changed as on 05th January 2012) is a 10,000 Cr. (US $ 2 billion approx) turnover company and is a Govt. of
India recognized '4 Star Export House'. The company is one of the leading manufacturers and exporters of handcrafted gold jewellery from India and the shares of the company are listed in Bombay Stock Exchange and National Stock Exchange of India.
The company is promoted by Mr. Nilesh Parekh and Mr. Umesh Parekh. Headquartered in Kolkata, with subsidiary offices in Hyderabad, Chennai, Bangalore, Delhi. The company is into manufacturing and exports of gold jewellery, diamond jewellery, gemstone studded jewellery and light weight Italian jewellery.
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KEY FINDINGS AND CONCLUSION: ROAD AHEAD India possesses world's most competitive gems and jewellery market due to its low cost of production, highly skilled, low-cost and best artisan force for designing and crafting jewellery, along with strong government support in the form of incentives and establishment of Special Economic Zones (SEZs). India is emerging as a huge consumer market for jewellery and other luxury products and thereby appears as a very attractive opportunity for major brands to establish their presence in the Indian market.
SERVICE GAP The service gap in the Gems and Jewellery Sector ranges from five major functions required for the cutting and polishing of diamonds. These are: Procurement Assortment and Planning Cutting and Polishing Grading Trading(Domestic/Export)
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BIBLIOGRAPHY: CRISIL RESEARCH D and B Research GJEPC NSDC CII FICCI Company Websites : o Tanishq o Gitanjali Gems o Shrenuj o Shree Ganesh Jewellery House Pvt. Ltd.
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