Many players from the organised and the unorganised jewellery retail sector have come up with plans such as sales, discounts on making charges, events and fashion shows, etc. to woo the patrons but these exercises were to futility. The slowdown in jewellery retail is pinned highly on the demand growth rather than the supply-side hindrances. On the other hand, according to an Assocham study, the luxury market in India witnessed a growth rate of 30 per cent in 2013. The segment stood at USD 6.5 billion in 2012 and is estimated to cross USD 14 billion mark during the course of the next three years. The segments such as vacations, automobiles, couture, etc. did very well in India but surprisingly jewellery took a back seat, according to most Indian jewellery retailers.%% Indian Jeweller team talks to the India’s 10 Leading Jewellery Manufacturers to know if they have witnessed this downtrend and unearth what they think are the reasons behind it.%% Swarnmandir Jewel Designer is a success story corroborated by the selection of striking studded jewellery. Known for their excellent craftsmanship and superlative design abilities, the brand has won many hearts. Their design abilities also facilitated them in being the designers of the crowns for Miss India contest for the years 2004, 2006 and 2007. They have also been producing DTC products for Tanishq, a TATA company. They are renowned for the studded ring manufacturing and also diamond-studded watches of the highest quality. We requested P. Kishoor Kumar to shares his views on the topic.%% {{Slow Growth of Jewellery Retail}} $$ A report suggests that jewellery sales in India will experience slower growth in the period 2013-2016 than in the period 2009-2012. The culprits are said to be ongoing weakness in consumer spending, which rising inflation, lower real wage growth and a poorer macroeconomic environment have hit. When asked if he agrees to these reports, P. Kishoor Kumar stated, “There has a been slow pace in gold sales in last few months and we have seen lesser orders.” Reasons For Downtrend Reasoning this slow pace, P. Kishoor Kumar says, “Many reasons like rupee breakdown and strict RBI rules on gold import/export has created a fear in buyers’ mind to look for alternatives for jewellery. The consumers do not have the same kind of trust in jewellery as they had few years back, due to the economic uncertainties.” %% {{Effect of Weakened Rupee}} $$ Talking about the rupee trajectory, he states, “The weakening of the rupee has affected the market in a pretty bad way. However, the market is on the path of recovery due to the efforts of design and innovation in the industry and increased awareness amongst consumers.”%%

{{Buying Habits of Young India}} %% Shedding light on the youth with larger disposable incomes, Kumar adds, “The younger generation doesn’t treat jewellery as an investment anymore. It is a lifestyle product and hence the buying trend has changed from ‘buying heavy; store it in locker jewellery’ to ‘multiple occasion wearable jewellery’. It is only natural that they are equally if not more attracted to other lifestyle products such as gadgets, automobile, couture, etc.” %% {{ Retailers’ Role }} %% Talking about the jewellery retailers who are not doing enough to attract consumers, he explains, “There have been good amount of efforts done by a lot of Indian brands to create products to cater to the young segment. However, there is a lot more to be done in this sphere. There are very few retailers who are selling according to the clients’ needs. Most of the Indian retailers sell as per their personal choice. There is a lack of focus on understanding the market and producing as per the market. Hence, customers have to keep hunting for what they need.” %% {{Influx of Corporate Jewellery Houses }} %% When asked if Indian manufacturers feel threatened due to the influx of corporate and stylish jewellery brands like Forevermark, etc., he states, “India is a country of mixed cultures and traditions and jewellery is largely influenced by it. The corporate brands cater to a very specific segment. However, the traditional segment, which is larger, is still addressed by Indian manufacturers. Also, along with catering to these traditional needs, Indian manufactures have upgraded themselves to the international standards.” %% {{Growth Forecast}} %% Talking about future growth prospects, he concludes by saying, “With enhanced efforts in understanding the market, I am sure Indian jewellery retail will do much better in years to come.”%%

With many years of experience in the domain of gemstones and jewellery, Valentine Jewellery India Pvt Ltd have become one of the most respected manufacturers, exporters, importers, traders, suppliers and service providers of gold rings, gemstone rings, diamond rings, silver rings, gold earrings, gold pendants, silver jewellery, gold bangles and many more. To know their opinion on this topic, we spoke to Vijay Chordia, Director, Valentine Jewellery India Pvt Ltd.%% {{Slow Growth of Jewellery Retail}}%% The retail growth is little slow but still there is a huge market for diamond jewellery, Chordia believes. Judging the reasons for this situation, he says, “General economic situation and few government policies may be some of the reasons for this slow down.” Effect of Weakened Rupee Coming to the effect of the spiralling rupee on jewellery and gems market, he comments, “Biggest effect is the price rise, which is gradually making jewellery much more expensive and out of reach for the masses.”%% {{Buying Habits of Young India}} %% He agrees that the young and urban Indians with large disposable incomes are more inclined towards gadgets and couture rather than jewellery, which can be the reason for jewellery retail downtrend; he adds further, “There is a big shift of young Indians from jewellery to gadgets and couture or vacations. This is also a reason for slowdown in general demand of jewellery.” But he completely disagrees that the traditional outlook of the industry is making it less popular amongst young Indians, he instead says, “The traditional outlook is changing very fast and this we can see from the tier II and tier III cities. Also trade exhibitions taking place all over are educating the masses. Hence, I do not agree to this point.” %%

{{Retailers’ Role }}%% He suggests few points for boosting the Indian retailers to attract the consumers, “Indian retailers need to upgrade and update and become more customer friendly and educative to allure the consumers. Transparency and disclosure will also help the customers gain confidence.” %% {{Influx of Corporate Jewellery Houses}} %% Agreeing to the point that Indian manufacturers feel threatened due to the influx of corporate and stylish jewellery brands, he says, “Traditional customers still opt for their family jewellers but these brands (corporate jewellery houses) surely allure the younger and new customer base which is coming up very strongly. This might worry the manufacturers a bit but if tackled well and with disclosure, hall marking and certification, this can be tackled easily as they can be at par with any other brands coming up.”%% {{Growth Forecast}} %% Ending on a positive hope, he concludes, “I hope to see growth and a better 2014 rather than the slow 2013 period.” %%

Krizz, a unit of Kanishk Gold Pvt Ltd, has been a pioneer in designing, crafting and manufacturing in the jewellery industry for more than a decade. Uniqueness and quality being its signature standard, Krizz strives hard to raise the bar in the fashion jewellery by creating stunning master pieces thereby setting new standards to the art form of jewel making that augment expectations of the ever demanding customers. We spoke to Bhupesh Jain, Managing Director, Krizz to know his view on the topic. %% {{Slow Growth of Jewellery Retail}} %% The U.S. and China have performed better in terms of jewellery retail in 2013. The 2013 revenue growth through jewellery retail in India has been much slower than 2012 and sentiment is adverse across all segments of the gems and jewellery trade. The market has been sluggish and this is felt across the jewellery industry, Bhupesh Jain says. %% {{Reasons For Downtrend }} $$ Reasoning his statement, he adds, “This is an open secret that the contributing factors are Government policies towards yellow metal, devaluation of rupee and the adverse economic climate.”%% {{Effect of Weakened Rupee }} $$ Commenting on the effect of the spiraling rupee on jewellery and gems market, he says, “The devaluation of rupee has promoted the Government of India to impose special rules and regulations on yellow metal which has impacted the industry considerably. India has never witnessed such a shortage of yellow metal,” he explains. The scarcity of gold has made the prices sky rocket, keeping the consumers at bay. This has also given rise to rampant smuggling of gold.%% {{Effect of General Economic Conditions}} $$ He then, moves on to the economic conditions of India that is affecting the industry, “The devaluation of rupee, import restrictions, high inflation and coupled with impending general elections have not been kind to the industry. We expect the second half of 2014 might ease the situation in favour of the industry.” %% {{Buying Habits of Young India}} $$ When quizzed about the lack of interest in youth towards buying jewellery, he strongly admits, “I am afraid that I have to violently agree as young urban Indians are more attracted towards the gadgets and fashion and luxury items owing to strong peer pressure. Lack of attractive and appealing designs from the industry has also not helped the industry.” %% {{Obsolete Outlook of Industry}} $$ Is traditional outlook of the industry to be blamed for this, we wondered. To this he replies, “I think this cannot be said across India as the rural population still would like to be in conformity with the traditions as against the young urban Indians.” %% {{Retailers’ Role }} $$ When asked if the Indian retailers are lacking in attracting consumers, he says, “I am not sure lacking is the right word. On the contrary, the industry environment, which has been impacted by various factors, has created an impression, which is deceptive. We need to wait for the economic situation to improve to understand opportunities better.” %% {{Influx of Corporate Jewellery Houses }} $$ When quizzed if Indian manufacturers feel threatened due to the influx of corporate and stylish jewellery brands like Forevermark? He answers, “Any industry including jewellery needs healthy competition in the form of newness, creativity and novelty as this would act as a catalyst and bring out the best in the industry and the customers will be the total beneficiary.” %% {{Growth Forecast}} $$ With the hopes of being the worst being past us, all the industry members are hoping for the best in 2014. Jain too concludes on a hopeful note, “The second half of 2014 should work in favour of the industry.”%%

With over a century of expertise using the finest craftsmanship, KGK Group has surpassed all obstacles to be at the top of the game. Their retail foray with KGK Entice has evolved by taking gemstones of the highest caliber from its parent company, KGK, to present a collection of diamond-studded jewellery of exceptional quality. The brand was launched at the turn of the millennium in 2004, in Hong Kong. Following a huge success with boutiques in Hong Kong and China and they deemed India to be ready for contemporary designs. Entice boutiques were launched in Jaipur, Mumbai and New Delhi to an overwhelming response. We spoke to Jitender Jain, CEO, Entice to know his view on the issue.%% {{Slow Growth of Jewellery Retail}} $$ When asked if he agreed to De Beers report that India’s retail growth has not been at power to China and U.S. in the year of 2013, he concurred and added, “Yes, the jewellery retail growth in India is relatively slow and has lost momentum. But, we foresee that the situation will look positive soon.” %% {{Reasons for Downtrend}} $$ Throwing light on the reasons for the lack of momentum, he shares, “There are various reasons, the biggest reason being the economic uncertainty in the market with major price fluctuations. This clubbed with political uncertainty are leading to negative sentiments in the market that is negatively affecting the jewellery retail in India.” %% {{Effect of Weakened Rupee}} $$ India imported 31 million carats of rough diamonds in April-May 2013, up about 26 per cent from the same period in 2012, according to data from the Gems and Jewellery Export Promotion Council (GJEPC). Does this mean that the spiraling rupee has failed to wash off the shine from diamond and diamondstudded jewellery business in India? Jain disagrees and says, “Fluctuating rupee hits the prices of diamonds and gold in a major way, making jewellery purchase very exorbitant for Indian masses. The sentiment in the market is also affected by the weakening rupee, which has a negative impact on most big-ticket purchases, including jewellery.” %% {{Effect of General Economic Conditions}} $$ Talking more about the market sentiment and the economics conditions of India, he states, “The gold import control policies leading to non availability of gold, decreases consumers’ confidence in the industry. We are waiting for the government to reduce or remove these control policies all together. The move should help smoothen the situation.” %% {{Buying Habits of Young India}} $$ When asked if he thinks the young and urban Indians with large disposable incomes are more inclined towards gadgets and couture rather than jewellery, he agrees. “Yes, the new generation is not too inclined towards spending on jewellery. They would rather pick up cars or gadgets instead of gold or diamond jewellery,” he says %% {{Retailers’ Role}} $$ Advising ways to help the market grow, he suggests, “A lot needs to be done in the jewellery market in order catch the attention of the youth. We some how need to get their interests back in buying jewellery. Also, enhanced transparency in the working of the industry is required to win the trust back.”%% {{Influx of Corporate Jewellery Houses}} $$ Do Indian manufacturers feel threatened due to the influx of corporate and stylish jewellery brands like Forevermark, we wondered. To this he says, “They are not threats at all. In fact, they actually help the market to get back its consumers. These brands are here to stay and they are needed for the growth of the industry.” %% {{Growth Forecast}} $$ Giving an outlook for the future, he states, “We are eagerly waiting for the elections and a more stable Government to come in power. This would turn things around in a positive manner for the coming financial year.”%%

From a first generation diamond manufacturer to one of Asia’s largest diamond jewellery exporters, Kama Schachter is embodied with unrivalled expertise in the art of designing, manufacturing, exporting and marketing of diamond jewellery. Thus, it will be interesting to know the expert view of Colin Shah, Managing Director, Kama Schachter on this topic. %% {{Slow Growth of Jewellery Retail}} $$ When quizzed about reasons affecting the India’s retail growth as compared to China and U.S., Colin Shah reasons, “The year 2013 has been a challenging year for the industry. There were many factors that affected the demand and manufacturing of diamond jewellery last year. The challenging economic conditions, depreciating rupee, decreased consumer consumer confidence and volatility in the price of gold have resulted in the decline last year. We are hoping that 2014 will be an optimistic year for the industry and its stability.” %% {{Effect of Weakened Rupee}} $$ Gauging the effect of the spiralling rupee on jewellery and gems market, he says, “Of course, fluctuations in the value of rupee does affect the price of gold. When the rupee depreciates, gold gets costly. The rupee depreciation, on the one hand, increased the cost of gold imports and on the other, has also resulted in the Government to impose restrictions on imports and sale.”%% {{Effect of General Economic Conditions}} $$ The Indian diamond jewellery market is pegged at $8.5 billion with the YOY increase of around 15- 20 per cent. However, last year was disappointing in terms of growth for the industry. Highlighting the economic condition of the industry, he shares, “The challenging economic conditions and devaluation of the rupee have definitely affected the business and the industry.” He adds, “Right now we are being optimistic about 2014 and expect the markets to stabilise a little with steady growth in diamond jewellery demand this year.” %% {{Buying Habits of Young India}} $$ Talking about the buying habits of the technologically inclined youth of India, he defends, “It would be wrong to say that the youth of today is not purchasing jewellery. The youth may not indulge in huge purchases, but they do put their money in jewellery. The urban population is more conscious while making jewellery purchases. They purchase jewellery for wearable purposes more than for the sake of investment.” Coming to the role played by the young generation in the industry, he positively opines, “I was 17 when I first entered the industry. Now when I look back after being in the business for 16 years, I know we have had many accomplishments but there is a lot to still achieve. There are many young turks in the industry who were a part of the trade and were successful. There are also so many young entrepreneurs in this business who are doing well for themselves and contributing their share to the industry. So I do not think the industry is not popular among the youth.” %% {{Retailers’ Role}} $$ Is there any shortfall in the efforts undertaken by retailers was our next question. Coming to the retailers, he says, “I think retailers are doing what they should to attract customers. It’s a huge market out there. Innovative marketing and advertising campaigns, design innovations, use of social media and affordable price points are what the retailers offer to a customer. This is what is attracting them to the stores. The retailers may not be looking at expansions but they are doing considerably good.” %% {{Growth Forecast}} %% Wrapping up the conversation, he concludes on a positive note, “Being cautiously optimistic about this year, I am hoping 2014 will be a little stable in terms of business and growth. We should not see any further deflation. This year will give way for a better 2015.” %%

Amore Jewels is one of the most leading names in princess, baguette and trapezium-cut diamond studded jewellery. It is renowned for its technical knowhow and vivid designs. The company is part of the Barmecha Group, which is one of the largest producers of princess and baguette cut diamonds. Amore Jewels has a state-of-the-art 18,000 sq. ft. factory with the most advanced technology and skilled staff. Shantilal Barmecha, the managing director is one of the most respected names in the industry and he is also one of the trailblazers to break new grounds. It was our honour to have his viewpoints on this issue.%% {{Slow Growth of Jewellery Retail}} $$ The De Beers report has stated that the jewellery retail growth of India was much slower compared to U.S. and China. India Ratings report suggested that the domestic jewellery retailers’ revenue grew in the range of 15-25 per cent in 2013 from around 40 per cent in 2012. When we asked Barmecha for his opinions on these findings, he stated, “Yes, I agree to this. But, it is not a very alarming situation. India is a country of variables and as it is not as organised as the U.S., it has its own potential and movements. I am a strong believer of Indian local market and I am sure it will rise up again.” %% {{Reasons for Downtrend}} $$ Throwing light on the reasons of downtrend, he opines, “The first and foremost reason is the increased duties on gold imports from 5 per cent to 10 per cent by the Indian Government. Secondly, the restrictions applied to the industry in terms of acquiring gold for local market supplies is an obstacle. Many jewellers, due to the lack of gold supplies, recycled their inventories and renewed their stocks to survive the lack of gold supplies.” %% {{Effect of Weakened Rupee}} $$ Though most manufacturers agreed that the spiraling rupee did have an adverse impact on the jewellery industry, Barmecha offers a different point of view. “The spiraling rupee did not have any direct impact on the trade circles except that the consumer could not stabilise their arithmetic. This uncertainty did not allow them to get committed for the variable price structures of gold and diamonds, hence it affected their buying behavior.”%% {{Effect of General Economic Conditions }} $$ Speaking about the economic conditions of India, he states, “The economic condition of India is very, very positive for our industry. Though the stocks have failed the people’s psychology, the land appreciations in tier II and tier III cities have given a good up lift to the industry. The industry should feel comfortable with this impact as it will be favourable for our trade in the long run.” %% {{Buying Habits of Young India}} $$ When asked if the young and urban Indians with large disposable incomes are more inclined towards gadgets and couture rather than jewellery, he concurs and explains, “Although it is true, I believe it is an initial passing phase and soon will fade out. According to me, it is a temporary diversion.” %% {{Retailers’ Role }} $$ Where do you think the Indian retailers are lacking in attracting consumers, was our next question to him. To this, he answers, “It is just the transparency and confidence built up, which is missing in the Indian retail. Secondly, it is also lacking the sale concepts, which could build up the continuous need of repeated sales. I also believe that the industry should think about the ‘unit sale pricing’ approach to give a comfort feel to the customer.” %% {{Growth Forecast}} $$ He concluded the conversation on a hopeful note. “I am very positive about the future. Though the phases may be varied and transient, there will be a potential growth in the market in totality,” he signs off.%%

Emerald Jewel Industry India Limited also known as Emerald started its business by working with goldsmiths and then established its own manufacturing in 1992. It transformed conventional methods of jewellery manufacturing into technology and talent driven process. The ultramodern manufacturing facilities in Coimbatore are an example of the same. Emerald today has emerged as the largest manufacturer of gold jewellery in the whole of Asia. K. Srinivasan, Managing Director, Emerald, has 29 years of rich and varied experience in the field of jewellery manufacturing and thus his inputs for this story were invaluable.%% {{Slow Growth of Jewellery Retail}} $$ When asked if K. Srinivasan agreed to the reports that state, the jewellery retail in India has been weaker in 2013, he concurs and says, “Yes, I agree. The jewellery industry of India in 2013 was down by 12 -15 per cent on YOY basis. We have experienced this descend and the retailers’ gusto for buying was missing.”%% {{Reasons For Downtrend}} $$ Shedding light on the reasons for this downtrend, he opines, “There are several reasons for it. Most of which are not in control of the jewellers. Reasons such as price fluctuations in gold and 10 per cent import duty levied by Government are the majors. Basically, in a nut shell one can say that the lack of Government support to the jewellery industry has caused this downtrend in jewellery retail.”%% {{Effect of Weakened Rupee}} $$ “Also, due to the rupee depreciation there is no scope for leasing. This results in importers paying the the full price upfront, which increases the capital costs. This makes the jeweller to shrink his profit margins to retain the earlier prices or he has to pass it on the consumers. The consumers are not ready to pay the higher price and shun away from buying jewellery,” he explains. %% {{Effect of General Economic Conditions}} $$ Talking about the current economic conditions of our country, he states, “ The large CAD (current account deficit) is a major worry for the government and the government has enforced stringent rules to curb the gold imports and end consumers are asked to refrain from buying gold.” %% {{Buying Habits of Young India}} $$ While discussing the buying habits of the youth of India, which are not too inclined toward buying jewellery, he states, “Today’s young generation is a ‘gadget generation’. They prefer to be stylish with the help of gadgets and couture. But, jewellery industry is not taking this competition from other verticals in a light way. The jewellers are launching new collections for daily wear purpose, which has also started attracting the youth.” %% {{Obsolete Outlook of Industry}} $$ We then asked if it is the obsolete, traditional outlook of the jewellery industry that is a culprit for the lower jewellery sales? To this he disagrees completely and explains, “Our industry is bringing about an innovation in their products, marketing strategies, advertising and customer reach to catch up with the young Indians. Now, almost every jewellery brand has its own pages on Facebook and Twitter handles. Also, the E- Commerce especially in jewellery sector has increased by 88 per cent on YOY basis. This clearly shows that our industry does not have only a traditional appearance.” %% {{Retailers’ Role}} $$ When asked if he thinks the Indian retailers are lacking in some arena when it comes to attracting consumers, K. Srinivasan is in a deep thought and later shares, “I think they are lacking in segmented advertising and they are not doing their part enough in spreading awareness about jewellery knowledge.” %% {{Growth Forecast}} $$ Foreseeing the growth prospects, he concludes by saying, “The Government should take immediate action to reduce import duty from 10 per cent to 2 per cent to make the industry buoyant again. If this happens we can definitely see a growth graph in 2014. Also, I believe online jewellery retail is making a big buzz for the future growth.”%%

Gold Star is one of the most eminent diamond and jewellery companies in the world. Right from rough to polished diamonds to exceptionally fine jewellery, Gold Star’s fervor for supremacy reflects in everything they accomplish. Hence we spoke to Hemil Mody, Director, Gold Star Jewellery India Pvt. Ltd. to know his opinion. %% {{ Slowdown of Jewellery Retail}} $$ Agreeing to report that India’s retail growth has not been at par to China and U.S., he says, “Yes we too, experienced a slight slowdown especially towards the end of 2013.” %% {{Reasons For Downtrend}} $$ The reasons are varied. “It all started with the devaluation of the rupee. Then came the booming prices of gold especially in domestic market due to duty and other taxes on domestic gold purchase, followed by rise in prices of the diamond rough. As it is, we as an industry face a lot of competition from the other luxury industries such as the mobile industry and the holiday and fashion industries. We do not indulge in half the amounts of advertising budgets as our competitor industries do and therefore all the other aspects go against us. What I see is the positive in all this is that we are still surviving. We ought to be really strong to have survived so far.” %% {{ Effect of Weakened Rupee}} $$ Talking about the spiraling rupee, he states, “Due to rupee depreciation, price of gold and diamonds are high in comparison to other markets and hence the cost of jewellery products are also high resulting in decrease in sales.” %% {{Effect of General Economic Conditions}} $$ Economic condition is also not well due to rupee depreciation as well as lots of restriction by Government for import of gold, etc. due to balance of payment issue. “This will decrease over the period but only if a stable Government comes in power after the elections in May,” he says.%% {{Buying Habits of Young India}} $$ While agreeing to the point that the young and urban Indians with large disposable incomes are more inclined towards gadgets and couture rather than jewellery, he says, “Yes, I definitely think that the young and urban Indians are more inclined towards gadgets, couture and let me add holidays rather than jewellery. Well, gadgets are no longer luxuries but more so necessities. Also, with the fast-paced lifestyle, my wife too would prefer to get away from this city rather than have a new piece of jewellery. This would be a stress buster as well as a status booster.” He further adds, “We still promote jewellery as investments and we still advertise mainly huge bridal sets which are seldom re-worn and now with multiple functions being in trend, bridal sets are not enough and unaffordable. We as an industry need to promote jewellery as ‘must haves’ on the fashion front. We also need to advertise it as luxury products in a much stronger way.”%% {{Influx of Corporate Jewellery Houses}} $$ Disagreeing to the point that Indian manufacturers feel threatened due to the influx of corporate and stylish jewellery brands like Forevermark, he says, “I do not believe that the Indian manufacturers feel threatened by them, and they shouldn’t. What they need to realise is that the strategy of these brands is a good one of promoting specific designs, as ‘must haves’. They are following the strategy of accessory brands that have worked extremely well with the young generation. We must build new desire.” %% {{Growth Forecast}} $$ Wrapping with an advice, he concludes, “I believe that until we do not ourselves accept the changed ideologies and do not apply the new strategies, growth will always be slow paced. The growth is up to us.”%%

Kiran Gems is one of the world’s largest manufacturers of diamonds. They carry out a massive production of nearly 1.6 million carats of polished diamonds; facilitating the growth of over 1,000 jeweller businesses worldwide. Moving further in the value chain, Kiran manufactures diamond jewellery. The brand is known as Kiran Jewels. The company is one of the top three jewellery suppliers to the most revered and established jewellery retailers. We requested Varun Lakhani, Partner, Kiran Jewels to share his insights on the issue.%% {{Slowdown of Jewellery Retail}} $$ When asked if he agrees to the De Beers report stating that India’s jewellery retail growth has not been at power with China and U.S., Varun states, “Yes, we believe that the retail growth of India has not been achieved as much it could have been. The business levels with Indian retailers were matching the previous volumes with only slight increase. However, the scenario is much better in this prevailing quarter.”%% {{Reasons For Downtrend}} $$ One of the main reasons for the downtrend according to the jewellers was the lack or the lack of speed of demand for jewellery amongst the consumers. Varun shares this viewpoint, too. He explains, “The delayed purchases from the side of the end consumers can be one of the prime reasons for this downtrend.”%% {{Effect of Weakened Rupee}} $$ Throwing light on one more reason for the downtrend, he says, “The direct effect of the weakened rupee is the price increase. But, international and economic dynamics are beyond anybody’s personal capacity. Hence, we believe that the focus should rather be on building abilities to create more demand.” %% {{Effect of General Economic Conditions}} $$ Talking about the economic conditions of the country, Varun shows a different side of the scenario. “In India, the economic conditions have a mixed effect on the industry. It is good as it is getting business even more streamlined in terms of operations, finances, marketing and formulation of overall strategy,” explains he. %% {{Buying Habits of Young India}} $$ Talking about young India’s buying habits, he states, in a matter-of-factly way, “It is the age of consumerism. The more something is visible to the consumer, the larger are the chances of getting that item sold. The one major trend observed in these industries is of obsolesce. The trends keep changing in these segments and they do not last forever. However, in jewellery the classis sense prevails, i.e. that jewellery is known to last for generations.”%% {{Obsolete Outlook}} $$ Talking about the traditional outlook of the industry, which is making it less popular amongst young Indians, he confirms, “May be yes, the traditional outlook does affect the industry in an adverse way. But, there are efforts from various companies at the retail level, which are in tandem with the culture of this generation of Indians.” %% {{Retailers’ Role}} $$ “Indian retailers are falling short in meeting with the expectations of Indian customers in terms of professionalism in their approach, transparency in trade, availability of multi locations and aftersales services. Paying close attention to these may go a long way in attracting new customers and keeping old customers happy,” he suggests.%% {{Influx of Corporate Jewellery Houses}} $$ Talking about the influx of the corporate jewellery houses and its effect on the Indian jewellery manufacturers, he states, “I agree to the fact that the corporate and stylish jewellery brands would have a larger consumer appeal and help industry to add extra customers. But, do they threaten the Indian manufacturers? No, as most of them are manufactured in India. Their strength is that they brand and market the product well.” %%

{{Growth Forecast}} %% Concluding the conversation with the growth forecast he says, “Comparing yearly QoQ, the first quarter has been better. We believe this would continue for rest of the year, too.”

Many players from the organised and the unorganised jewellery retail sector have come up with plans such as sales, discounts on making charges, events and fashion shows, etc. to woo the patrons but these exercises were to futility. The slowdown in jewellery retail is pinned highly on the demand growth rather than the supply-side hindrances. On the other hand, according to an Assocham study, the luxury market in India witnessed a growth rate of 30 per cent in 2013. The segment stood at USD 6.5 billion in 2012 and is estimated to cross USD 14 billion mark during the course of the next three years. The segments such as vacations, automobiles, couture, etc. did very well in India but surprisingly jewellery took a back seat, according to most Indian jewellery retailers.%% Indian Jeweller team talks to the India’s 10 Leading Jewellery Manufacturers to know if they have witnessed this downtrend and unearth what they think are the reasons behind it.%% Swarnmandir Jewel Designer is a success story corroborated by the selection of striking studded jewellery. Known for their excellent craftsmanship and superlative design abilities, the brand has won many hearts. Their design abilities also facilitated them in being the designers of the crowns for Miss India contest for the years 2004, 2006 and 2007. They have also been producing DTC products for Tanishq, a TATA company. They are renowned for the studded ring manufacturing and also diamond-studded watches of the highest quality. We requested P. Kishoor Kumar to shares his views on the topic.%% {{Slow Growth of Jewellery Retail}} $$ A report suggests that jewellery sales in India will experience slower growth in the period 2013-2016 than in the period 2009-2012. The culprits are said to be ongoing weakness in consumer spending, which rising inflation, lower real wage growth and a poorer macroeconomic environment have hit. When asked if he agrees to these reports, P. Kishoor Kumar stated, “There has a been slow pace in gold sales in last few months and we have seen lesser orders.” Reasons For Downtrend Reasoning this slow pace, P. Kishoor Kumar says, “Many reasons like rupee breakdown and strict RBI rules on gold import/export has created a fear in buyers’ mind to look for alternatives for jewellery. The consumers do not have the same kind of trust in jewellery as they had few years back, due to the economic uncertainties.” %% {{Effect of Weakened Rupee}} $$ Talking about the rupee trajectory, he states, “The weakening of the rupee has affected the market in a pretty bad way. However, the market is on the path of recovery due to the efforts of design and innovation in the industry and increased awareness amongst consumers.”%%

{{Buying Habits of Young India}} %% Shedding light on the youth with larger disposable incomes, Kumar adds, “The younger generation doesn’t treat jewellery as an investment anymore. It is a lifestyle product and hence the buying trend has changed from ‘buying heavy; store it in locker jewellery’ to ‘multiple occasion wearable jewellery’. It is only natural that they are equally if not more attracted to other lifestyle products such as gadgets, automobile, couture, etc.” %% {{ Retailers’ Role }} %% Talking about the jewellery retailers who are not doing enough to attract consumers, he explains, “There have been good amount of efforts done by a lot of Indian brands to create products to cater to the young segment. However, there is a lot more to be done in this sphere. There are very few retailers who are selling according to the clients’ needs. Most of the Indian retailers sell as per their personal choice. There is a lack of focus on understanding the market and producing as per the market. Hence, customers have to keep hunting for what they need.” %% {{Influx of Corporate Jewellery Houses }} %% When asked if Indian manufacturers feel threatened due to the influx of corporate and stylish jewellery brands like Forevermark, etc., he states, “India is a country of mixed cultures and traditions and jewellery is largely influenced by it. The corporate brands cater to a very specific segment. However, the traditional segment, which is larger, is still addressed by Indian manufacturers. Also, along with catering to these traditional needs, Indian manufactures have upgraded themselves to the international standards.” %% {{Growth Forecast}} %% Talking about future growth prospects, he concludes by saying, “With enhanced efforts in understanding the market, I am sure Indian jewellery retail will do much better in years to come.”%%

With many years of experience in the domain of gemstones and jewellery, Valentine Jewellery India Pvt Ltd have become one of the most respected manufacturers, exporters, importers, traders, suppliers and service providers of gold rings, gemstone rings, diamond rings, silver rings, gold earrings, gold pendants, silver jewellery, gold bangles and many more. To know their opinion on this topic, we spoke to Vijay Chordia, Director, Valentine Jewellery India Pvt Ltd.%% {{Slow Growth of Jewellery Retail}}%% The retail growth is little slow but still there is a huge market for diamond jewellery, Chordia believes. Judging the reasons for this situation, he says, “General economic situation and few government policies may be some of the reasons for this slow down.” Effect of Weakened Rupee Coming to the effect of the spiralling rupee on jewellery and gems market, he comments, “Biggest effect is the price rise, which is gradually making jewellery much more expensive and out of reach for the masses.”%% {{Buying Habits of Young India}} %% He agrees that the young and urban Indians with large disposable incomes are more inclined towards gadgets and couture rather than jewellery, which can be the reason for jewellery retail downtrend; he adds further, “There is a big shift of young Indians from jewellery to gadgets and couture or vacations. This is also a reason for slowdown in general demand of jewellery.” But he completely disagrees that the traditional outlook of the industry is making it less popular amongst young Indians, he instead says, “The traditional outlook is changing very fast and this we can see from the tier II and tier III cities. Also trade exhibitions taking place all over are educating the masses. Hence, I do not agree to this point.” %%

{{Retailers’ Role }}%% He suggests few points for boosting the Indian retailers to attract the consumers, “Indian retailers need to upgrade and update and become more customer friendly and educative to allure the consumers. Transparency and disclosure will also help the customers gain confidence.” %% {{Influx of Corporate Jewellery Houses}} %% Agreeing to the point that Indian manufacturers feel threatened due to the influx of corporate and stylish jewellery brands, he says, “Traditional customers still opt for their family jewellers but these brands (corporate jewellery houses) surely allure the younger and new customer base which is coming up very strongly. This might worry the manufacturers a bit but if tackled well and with disclosure, hall marking and certification, this can be tackled easily as they can be at par with any other brands coming up.”%% {{Growth Forecast}} %% Ending on a positive hope, he concludes, “I hope to see growth and a better 2014 rather than the slow 2013 period.” %%

Krizz, a unit of Kanishk Gold Pvt Ltd, has been a pioneer in designing, crafting and manufacturing in the jewellery industry for more than a decade. Uniqueness and quality being its signature standard, Krizz strives hard to raise the bar in the fashion jewellery by creating stunning master pieces thereby setting new standards to the art form of jewel making that augment expectations of the ever demanding customers. We spoke to Bhupesh Jain, Managing Director, Krizz to know his view on the topic. %% {{Slow Growth of Jewellery Retail}} %% The U.S. and China have performed better in terms of jewellery retail in 2013. The 2013 revenue growth through jewellery retail in India has been much slower than 2012 and sentiment is adverse across all segments of the gems and jewellery trade. The market has been sluggish and this is felt across the jewellery industry, Bhupesh Jain says. %% {{Reasons For Downtrend }} $$ Reasoning his statement, he adds, “This is an open secret that the contributing factors are Government policies towards yellow metal, devaluation of rupee and the adverse economic climate.”%% {{Effect of Weakened Rupee }} $$ Commenting on the effect of the spiraling rupee on jewellery and gems market, he says, “The devaluation of rupee has promoted the Government of India to impose special rules and regulations on yellow metal which has impacted the industry considerably. India has never witnessed such a shortage of yellow metal,” he explains. The scarcity of gold has made the prices sky rocket, keeping the consumers at bay. This has also given rise to rampant smuggling of gold.%% {{Effect of General Economic Conditions}} $$ He then, moves on to the economic conditions of India that is affecting the industry, “The devaluation of rupee, import restrictions, high inflation and coupled with impending general elections have not been kind to the industry. We expect the second half of 2014 might ease the situation in favour of the industry.” %% {{Buying Habits of Young India}} $$ When quizzed about the lack of interest in youth towards buying jewellery, he strongly admits, “I am afraid that I have to violently agree as young urban Indians are more attracted towards the gadgets and fashion and luxury items owing to strong peer pressure. Lack of attractive and appealing designs from the industry has also not helped the industry.” %% {{Obsolete Outlook of Industry}} $$ Is traditional outlook of the industry to be blamed for this, we wondered. To this he replies, “I think this cannot be said across India as the rural population still would like to be in conformity with the traditions as against the young urban Indians.” %% {{Retailers’ Role }} $$ When asked if the Indian retailers are lacking in attracting consumers, he says, “I am not sure lacking is the right word. On the contrary, the industry environment, which has been impacted by various factors, has created an impression, which is deceptive. We need to wait for the economic situation to improve to understand opportunities better.” %% {{Influx of Corporate Jewellery Houses }} $$ When quizzed if Indian manufacturers feel threatened due to the influx of corporate and stylish jewellery brands like Forevermark? He answers, “Any industry including jewellery needs healthy competition in the form of newness, creativity and novelty as this would act as a catalyst and bring out the best in the industry and the customers will be the total beneficiary.” %% {{Growth Forecast}} $$ With the hopes of being the worst being past us, all the industry members are hoping for the best in 2014. Jain too concludes on a hopeful note, “The second half of 2014 should work in favour of the industry.”%%

With over a century of expertise using the finest craftsmanship, KGK Group has surpassed all obstacles to be at the top of the game. Their retail foray with KGK Entice has evolved by taking gemstones of the highest caliber from its parent company, KGK, to present a collection of diamond-studded jewellery of exceptional quality. The brand was launched at the turn of the millennium in 2004, in Hong Kong. Following a huge success with boutiques in Hong Kong and China and they deemed India to be ready for contemporary designs. Entice boutiques were launched in Jaipur, Mumbai and New Delhi to an overwhelming response. We spoke to Jitender Jain, CEO, Entice to know his view on the issue.%% {{Slow Growth of Jewellery Retail}} $$ When asked if he agreed to De Beers report that India’s retail growth has not been at power to China and U.S. in the year of 2013, he concurred and added, “Yes, the jewellery retail growth in India is relatively slow and has lost momentum. But, we foresee that the situation will look positive soon.” %% {{Reasons for Downtrend}} $$ Throwing light on the reasons for the lack of momentum, he shares, “There are various reasons, the biggest reason being the economic uncertainty in the market with major price fluctuations. This clubbed with political uncertainty are leading to negative sentiments in the market that is negatively affecting the jewellery retail in India.” %% {{Effect of Weakened Rupee}} $$ India imported 31 million carats of rough diamonds in April-May 2013, up about 26 per cent from the same period in 2012, according to data from the Gems and Jewellery Export Promotion Council (GJEPC). Does this mean that the spiraling rupee has failed to wash off the shine from diamond and diamondstudded jewellery business in India? Jain disagrees and says, “Fluctuating rupee hits the prices of diamonds and gold in a major way, making jewellery purchase very exorbitant for Indian masses. The sentiment in the market is also affected by the weakening rupee, which has a negative impact on most big-ticket purchases, including jewellery.” %% {{Effect of General Economic Conditions}} $$ Talking more about the market sentiment and the economics conditions of India, he states, “The gold import control policies leading to non availability of gold, decreases consumers’ confidence in the industry. We are waiting for the government to reduce or remove these control policies all together. The move should help smoothen the situation.” %% {{Buying Habits of Young India}} $$ When asked if he thinks the young and urban Indians with large disposable incomes are more inclined towards gadgets and couture rather than jewellery, he agrees. “Yes, the new generation is not too inclined towards spending on jewellery. They would rather pick up cars or gadgets instead of gold or diamond jewellery,” he says %% {{Retailers’ Role}} $$ Advising ways to help the market grow, he suggests, “A lot needs to be done in the jewellery market in order catch the attention of the youth. We some how need to get their interests back in buying jewellery. Also, enhanced transparency in the working of the industry is required to win the trust back.”%% {{Influx of Corporate Jewellery Houses}} $$ Do Indian manufacturers feel threatened due to the influx of corporate and stylish jewellery brands like Forevermark, we wondered. To this he says, “They are not threats at all. In fact, they actually help the market to get back its consumers. These brands are here to stay and they are needed for the growth of the industry.” %% {{Growth Forecast}} $$ Giving an outlook for the future, he states, “We are eagerly waiting for the elections and a more stable Government to come in power. This would turn things around in a positive manner for the coming financial year.”%%

From a first generation diamond manufacturer to one of Asia’s largest diamond jewellery exporters, Kama Schachter is embodied with unrivalled expertise in the art of designing, manufacturing, exporting and marketing of diamond jewellery. Thus, it will be interesting to know the expert view of Colin Shah, Managing Director, Kama Schachter on this topic. %% {{Slow Growth of Jewellery Retail}} $$ When quizzed about reasons affecting the India’s retail growth as compared to China and U.S., Colin Shah reasons, “The year 2013 has been a challenging year for the industry. There were many factors that affected the demand and manufacturing of diamond jewellery last year. The challenging economic conditions, depreciating rupee, decreased consumer consumer confidence and volatility in the price of gold have resulted in the decline last year. We are hoping that 2014 will be an optimistic year for the industry and its stability.” %% {{Effect of Weakened Rupee}} $$ Gauging the effect of the spiralling rupee on jewellery and gems market, he says, “Of course, fluctuations in the value of rupee does affect the price of gold. When the rupee depreciates, gold gets costly. The rupee depreciation, on the one hand, increased the cost of gold imports and on the other, has also resulted in the Government to impose restrictions on imports and sale.”%% {{Effect of General Economic Conditions}} $$ The Indian diamond jewellery market is pegged at $8.5 billion with the YOY increase of around 15- 20 per cent. However, last year was disappointing in terms of growth for the industry. Highlighting the economic condition of the industry, he shares, “The challenging economic conditions and devaluation of the rupee have definitely affected the business and the industry.” He adds, “Right now we are being optimistic about 2014 and expect the markets to stabilise a little with steady growth in diamond jewellery demand this year.” %% {{Buying Habits of Young India}} $$ Talking about the buying habits of the technologically inclined youth of India, he defends, “It would be wrong to say that the youth of today is not purchasing jewellery. The youth may not indulge in huge purchases, but they do put their money in jewellery. The urban population is more conscious while making jewellery purchases. They purchase jewellery for wearable purposes more than for the sake of investment.” Coming to the role played by the young generation in the industry, he positively opines, “I was 17 when I first entered the industry. Now when I look back after being in the business for 16 years, I know we have had many accomplishments but there is a lot to still achieve. There are many young turks in the industry who were a part of the trade and were successful. There are also so many young entrepreneurs in this business who are doing well for themselves and contributing their share to the industry. So I do not think the industry is not popular among the youth.” %% {{Retailers’ Role}} $$ Is there any shortfall in the efforts undertaken by retailers was our next question. Coming to the retailers, he says, “I think retailers are doing what they should to attract customers. It’s a huge market out there. Innovative marketing and advertising campaigns, design innovations, use of social media and affordable price points are what the retailers offer to a customer. This is what is attracting them to the stores. The retailers may not be looking at expansions but they are doing considerably good.” %% {{Growth Forecast}} %% Wrapping up the conversation, he concludes on a positive note, “Being cautiously optimistic about this year, I am hoping 2014 will be a little stable in terms of business and growth. We should not see any further deflation. This year will give way for a better 2015.” %%

Amore Jewels is one of the most leading names in princess, baguette and trapezium-cut diamond studded jewellery. It is renowned for its technical knowhow and vivid designs. The company is part of the Barmecha Group, which is one of the largest producers of princess and baguette cut diamonds. Amore Jewels has a state-of-the-art 18,000 sq. ft. factory with the most advanced technology and skilled staff. Shantilal Barmecha, the managing director is one of the most respected names in the industry and he is also one of the trailblazers to break new grounds. It was our honour to have his viewpoints on this issue.%% {{Slow Growth of Jewellery Retail}} $$ The De Beers report has stated that the jewellery retail growth of India was much slower compared to U.S. and China. India Ratings report suggested that the domestic jewellery retailers’ revenue grew in the range of 15-25 per cent in 2013 from around 40 per cent in 2012. When we asked Barmecha for his opinions on these findings, he stated, “Yes, I agree to this. But, it is not a very alarming situation. India is a country of variables and as it is not as organised as the U.S., it has its own potential and movements. I am a strong believer of Indian local market and I am sure it will rise up again.” %% {{Reasons for Downtrend}} $$ Throwing light on the reasons of downtrend, he opines, “The first and foremost reason is the increased duties on gold imports from 5 per cent to 10 per cent by the Indian Government. Secondly, the restrictions applied to the industry in terms of acquiring gold for local market supplies is an obstacle. Many jewellers, due to the lack of gold supplies, recycled their inventories and renewed their stocks to survive the lack of gold supplies.” %% {{Effect of Weakened Rupee}} $$ Though most manufacturers agreed that the spiraling rupee did have an adverse impact on the jewellery industry, Barmecha offers a different point of view. “The spiraling rupee did not have any direct impact on the trade circles except that the consumer could not stabilise their arithmetic. This uncertainty did not allow them to get committed for the variable price structures of gold and diamonds, hence it affected their buying behavior.”%% {{Effect of General Economic Conditions }} $$ Speaking about the economic conditions of India, he states, “The economic condition of India is very, very positive for our industry. Though the stocks have failed the people’s psychology, the land appreciations in tier II and tier III cities have given a good up lift to the industry. The industry should feel comfortable with this impact as it will be favourable for our trade in the long run.” %% {{Buying Habits of Young India}} $$ When asked if the young and urban Indians with large disposable incomes are more inclined towards gadgets and couture rather than jewellery, he concurs and explains, “Although it is true, I believe it is an initial passing phase and soon will fade out. According to me, it is a temporary diversion.” %% {{Retailers’ Role }} $$ Where do you think the Indian retailers are lacking in attracting consumers, was our next question to him. To this, he answers, “It is just the transparency and confidence built up, which is missing in the Indian retail. Secondly, it is also lacking the sale concepts, which could build up the continuous need of repeated sales. I also believe that the industry should think about the ‘unit sale pricing’ approach to give a comfort feel to the customer.” %% {{Growth Forecast}} $$ He concluded the conversation on a hopeful note. “I am very positive about the future. Though the phases may be varied and transient, there will be a potential growth in the market in totality,” he signs off.%%

Emerald Jewel Industry India Limited also known as Emerald started its business by working with goldsmiths and then established its own manufacturing in 1992. It transformed conventional methods of jewellery manufacturing into technology and talent driven process. The ultramodern manufacturing facilities in Coimbatore are an example of the same. Emerald today has emerged as the largest manufacturer of gold jewellery in the whole of Asia. K. Srinivasan, Managing Director, Emerald, has 29 years of rich and varied experience in the field of jewellery manufacturing and thus his inputs for this story were invaluable.%% {{Slow Growth of Jewellery Retail}} $$ When asked if K. Srinivasan agreed to the reports that state, the jewellery retail in India has been weaker in 2013, he concurs and says, “Yes, I agree. The jewellery industry of India in 2013 was down by 12 -15 per cent on YOY basis. We have experienced this descend and the retailers’ gusto for buying was missing.”%% {{Reasons For Downtrend}} $$ Shedding light on the reasons for this downtrend, he opines, “There are several reasons for it. Most of which are not in control of the jewellers. Reasons such as price fluctuations in gold and 10 per cent import duty levied by Government are the majors. Basically, in a nut shell one can say that the lack of Government support to the jewellery industry has caused this downtrend in jewellery retail.”%% {{Effect of Weakened Rupee}} $$ “Also, due to the rupee depreciation there is no scope for leasing. This results in importers paying the the full price upfront, which increases the capital costs. This makes the jeweller to shrink his profit margins to retain the earlier prices or he has to pass it on the consumers. The consumers are not ready to pay the higher price and shun away from buying jewellery,” he explains. %% {{Effect of General Economic Conditions}} $$ Talking about the current economic conditions of our country, he states, “ The large CAD (current account deficit) is a major worry for the government and the government has enforced stringent rules to curb the gold imports and end consumers are asked to refrain from buying gold.” %% {{Buying Habits of Young India}} $$ While discussing the buying habits of the youth of India, which are not too inclined toward buying jewellery, he states, “Today’s young generation is a ‘gadget generation’. They prefer to be stylish with the help of gadgets and couture. But, jewellery industry is not taking this competition from other verticals in a light way. The jewellers are launching new collections for daily wear purpose, which has also started attracting the youth.” %% {{Obsolete Outlook of Industry}} $$ We then asked if it is the obsolete, traditional outlook of the jewellery industry that is a culprit for the lower jewellery sales? To this he disagrees completely and explains, “Our industry is bringing about an innovation in their products, marketing strategies, advertising and customer reach to catch up with the young Indians. Now, almost every jewellery brand has its own pages on Facebook and Twitter handles. Also, the E- Commerce especially in jewellery sector has increased by 88 per cent on YOY basis. This clearly shows that our industry does not have only a traditional appearance.” %% {{Retailers’ Role}} $$ When asked if he thinks the Indian retailers are lacking in some arena when it comes to attracting consumers, K. Srinivasan is in a deep thought and later shares, “I think they are lacking in segmented advertising and they are not doing their part enough in spreading awareness about jewellery knowledge.” %% {{Growth Forecast}} $$ Foreseeing the growth prospects, he concludes by saying, “The Government should take immediate action to reduce import duty from 10 per cent to 2 per cent to make the industry buoyant again. If this happens we can definitely see a growth graph in 2014. Also, I believe online jewellery retail is making a big buzz for the future growth.”%%

Gold Star is one of the most eminent diamond and jewellery companies in the world. Right from rough to polished diamonds to exceptionally fine jewellery, Gold Star’s fervor for supremacy reflects in everything they accomplish. Hence we spoke to Hemil Mody, Director, Gold Star Jewellery India Pvt. Ltd. to know his opinion. %% {{ Slowdown of Jewellery Retail}} $$ Agreeing to report that India’s retail growth has not been at par to China and U.S., he says, “Yes we too, experienced a slight slowdown especially towards the end of 2013.” %% {{Reasons For Downtrend}} $$ The reasons are varied. “It all started with the devaluation of the rupee. Then came the booming prices of gold especially in domestic market due to duty and other taxes on domestic gold purchase, followed by rise in prices of the diamond rough. As it is, we as an industry face a lot of competition from the other luxury industries such as the mobile industry and the holiday and fashion industries. We do not indulge in half the amounts of advertising budgets as our competitor industries do and therefore all the other aspects go against us. What I see is the positive in all this is that we are still surviving. We ought to be really strong to have survived so far.” %% {{ Effect of Weakened Rupee}} $$ Talking about the spiraling rupee, he states, “Due to rupee depreciation, price of gold and diamonds are high in comparison to other markets and hence the cost of jewellery products are also high resulting in decrease in sales.” %% {{Effect of General Economic Conditions}} $$ Economic condition is also not well due to rupee depreciation as well as lots of restriction by Government for import of gold, etc. due to balance of payment issue. “This will decrease over the period but only if a stable Government comes in power after the elections in May,” he says.%% {{Buying Habits of Young India}} $$ While agreeing to the point that the young and urban Indians with large disposable incomes are more inclined towards gadgets and couture rather than jewellery, he says, “Yes, I definitely think that the young and urban Indians are more inclined towards gadgets, couture and let me add holidays rather than jewellery. Well, gadgets are no longer luxuries but more so necessities. Also, with the fast-paced lifestyle, my wife too would prefer to get away from this city rather than have a new piece of jewellery. This would be a stress buster as well as a status booster.” He further adds, “We still promote jewellery as investments and we still advertise mainly huge bridal sets which are seldom re-worn and now with multiple functions being in trend, bridal sets are not enough and unaffordable. We as an industry need to promote jewellery as ‘must haves’ on the fashion front. We also need to advertise it as luxury products in a much stronger way.”%% {{Influx of Corporate Jewellery Houses}} $$ Disagreeing to the point that Indian manufacturers feel threatened due to the influx of corporate and stylish jewellery brands like Forevermark, he says, “I do not believe that the Indian manufacturers feel threatened by them, and they shouldn’t. What they need to realise is that the strategy of these brands is a good one of promoting specific designs, as ‘must haves’. They are following the strategy of accessory brands that have worked extremely well with the young generation. We must build new desire.” %% {{Growth Forecast}} $$ Wrapping with an advice, he concludes, “I believe that until we do not ourselves accept the changed ideologies and do not apply the new strategies, growth will always be slow paced. The growth is up to us.”%%

Kiran Gems is one of the world’s largest manufacturers of diamonds. They carry out a massive production of nearly 1.6 million carats of polished diamonds; facilitating the growth of over 1,000 jeweller businesses worldwide. Moving further in the value chain, Kiran manufactures diamond jewellery. The brand is known as Kiran Jewels. The company is one of the top three jewellery suppliers to the most revered and established jewellery retailers. We requested Varun Lakhani, Partner, Kiran Jewels to share his insights on the issue.%% {{Slowdown of Jewellery Retail}} $$ When asked if he agrees to the De Beers report stating that India’s jewellery retail growth has not been at power with China and U.S., Varun states, “Yes, we believe that the retail growth of India has not been achieved as much it could have been. The business levels with Indian retailers were matching the previous volumes with only slight increase. However, the scenario is much better in this prevailing quarter.”%% {{Reasons For Downtrend}} $$ One of the main reasons for the downtrend according to the jewellers was the lack or the lack of speed of demand for jewellery amongst the consumers. Varun shares this viewpoint, too. He explains, “The delayed purchases from the side of the end consumers can be one of the prime reasons for this downtrend.”%% {{Effect of Weakened Rupee}} $$ Throwing light on one more reason for the downtrend, he says, “The direct effect of the weakened rupee is the price increase. But, international and economic dynamics are beyond anybody’s personal capacity. Hence, we believe that the focus should rather be on building abilities to create more demand.” %% {{Effect of General Economic Conditions}} $$ Talking about the economic conditions of the country, Varun shows a different side of the scenario. “In India, the economic conditions have a mixed effect on the industry. It is good as it is getting business even more streamlined in terms of operations, finances, marketing and formulation of overall strategy,” explains he. %% {{Buying Habits of Young India}} $$ Talking about young India’s buying habits, he states, in a matter-of-factly way, “It is the age of consumerism. The more something is visible to the consumer, the larger are the chances of getting that item sold. The one major trend observed in these industries is of obsolesce. The trends keep changing in these segments and they do not last forever. However, in jewellery the classis sense prevails, i.e. that jewellery is known to last for generations.”%% {{Obsolete Outlook}} $$ Talking about the traditional outlook of the industry, which is making it less popular amongst young Indians, he confirms, “May be yes, the traditional outlook does affect the industry in an adverse way. But, there are efforts from various companies at the retail level, which are in tandem with the culture of this generation of Indians.” %% {{Retailers’ Role}} $$ “Indian retailers are falling short in meeting with the expectations of Indian customers in terms of professionalism in their approach, transparency in trade, availability of multi locations and aftersales services. Paying close attention to these may go a long way in attracting new customers and keeping old customers happy,” he suggests.%% {{Influx of Corporate Jewellery Houses}} $$ Talking about the influx of the corporate jewellery houses and its effect on the Indian jewellery manufacturers, he states, “I agree to the fact that the corporate and stylish jewellery brands would have a larger consumer appeal and help industry to add extra customers. But, do they threaten the Indian manufacturers? No, as most of them are manufactured in India. Their strength is that they brand and market the product well.” %%

{{Growth Forecast}} %% Concluding the conversation with the growth forecast he says, “Comparing yearly QoQ, the first quarter has been better. We believe this would continue for rest of the year, too.”

Many players from the organised and the unorganised jewellery retail sector have come up with plans such as sales, discounts on making charges, events and fashion shows, etc. to woo the patrons but these exercises were to futility. The slowdown in jewellery retail is pinned highly on the demand growth rather than the supply-side hindrances. On the other hand, according to an Assocham study, the luxury market in India witnessed a growth rate of 30 per cent in 2013. The segment stood at USD 6.5 billion in 2012 and is estimated to cross USD 14 billion mark during the course of the next three years. The segments such as vacations, automobiles, couture, etc. did very well in India but surprisingly jewellery took a back seat, according to most Indian jewellery retailers.%% Indian Jeweller team talks to the India’s 10 Leading Jewellery Manufacturers to know if they have witnessed this downtrend and unearth what they think are the reasons behind it.%% Swarnmandir Jewel Designer is a success story corroborated by the selection of striking studded jewellery. Known for their excellent craftsmanship and superlative design abilities, the brand has won many hearts. Their design abilities also facilitated them in being the designers of the crowns for Miss India contest for the years 2004, 2006 and 2007. They have also been producing DTC products for Tanishq, a TATA company. They are renowned for the studded ring manufacturing and also diamond-studded watches of the highest quality. We requested P. Kishoor Kumar to shares his views on the topic.%% {{Slow Growth of Jewellery Retail}} $$ A report suggests that jewellery sales in India will experience slower growth in the period 2013-2016 than in the period 2009-2012. The culprits are said to be ongoing weakness in consumer spending, which rising inflation, lower real wage growth and a poorer macroeconomic environment have hit. When asked if he agrees to these reports, P. Kishoor Kumar stated, “There has a been slow pace in gold sales in last few months and we have seen lesser orders.” Reasons For Downtrend Reasoning this slow pace, P. Kishoor Kumar says, “Many reasons like rupee breakdown and strict RBI rules on gold import/export has created a fear in buyers’ mind to look for alternatives for jewellery. The consumers do not have the same kind of trust in jewellery as they had few years back, due to the economic uncertainties.” %% {{Effect of Weakened Rupee}} $$ Talking about the rupee trajectory, he states, “The weakening of the rupee has affected the market in a pretty bad way. However, the market is on the path of recovery due to the efforts of design and innovation in the industry and increased awareness amongst consumers.”%%

{{Buying Habits of Young India}} %% Shedding light on the youth with larger disposable incomes, Kumar adds, “The younger generation doesn’t treat jewellery as an investment anymore. It is a lifestyle product and hence the buying trend has changed from ‘buying heavy; store it in locker jewellery’ to ‘multiple occasion wearable jewellery’. It is only natural that they are equally if not more attracted to other lifestyle products such as gadgets, automobile, couture, etc.” %% {{ Retailers’ Role }} %% Talking about the jewellery retailers who are not doing enough to attract consumers, he explains, “There have been good amount of efforts done by a lot of Indian brands to create products to cater to the young segment. However, there is a lot more to be done in this sphere. There are very few retailers who are selling according to the clients’ needs. Most of the Indian retailers sell as per their personal choice. There is a lack of focus on understanding the market and producing as per the market. Hence, customers have to keep hunting for what they need.” %% {{Influx of Corporate Jewellery Houses }} %% When asked if Indian manufacturers feel threatened due to the influx of corporate and stylish jewellery brands like Forevermark, etc., he states, “India is a country of mixed cultures and traditions and jewellery is largely influenced by it. The corporate brands cater to a very specific segment. However, the traditional segment, which is larger, is still addressed by Indian manufacturers. Also, along with catering to these traditional needs, Indian manufactures have upgraded themselves to the international standards.” %% {{Growth Forecast}} %% Talking about future growth prospects, he concludes by saying, “With enhanced efforts in understanding the market, I am sure Indian jewellery retail will do much better in years to come.”%%

With many years of experience in the domain of gemstones and jewellery, Valentine Jewellery India Pvt Ltd have become one of the most respected manufacturers, exporters, importers, traders, suppliers and service providers of gold rings, gemstone rings, diamond rings, silver rings, gold earrings, gold pendants, silver jewellery, gold bangles and many more. To know their opinion on this topic, we spoke to Vijay Chordia, Director, Valentine Jewellery India Pvt Ltd.%% {{Slow Growth of Jewellery Retail}}%% The retail growth is little slow but still there is a huge market for diamond jewellery, Chordia believes. Judging the reasons for this situation, he says, “General economic situation and few government policies may be some of the reasons for this slow down.” Effect of Weakened Rupee Coming to the effect of the spiralling rupee on jewellery and gems market, he comments, “Biggest effect is the price rise, which is gradually making jewellery much more expensive and out of reach for the masses.”%% {{Buying Habits of Young India}} %% He agrees that the young and urban Indians with large disposable incomes are more inclined towards gadgets and couture rather than jewellery, which can be the reason for jewellery retail downtrend; he adds further, “There is a big shift of young Indians from jewellery to gadgets and couture or vacations. This is also a reason for slowdown in general demand of jewellery.” But he completely disagrees that the traditional outlook of the industry is making it less popular amongst young Indians, he instead says, “The traditional outlook is changing very fast and this we can see from the tier II and tier III cities. Also trade exhibitions taking place all over are educating the masses. Hence, I do not agree to this point.” %%

{{Retailers’ Role }}%% He suggests few points for boosting the Indian retailers to attract the consumers, “Indian retailers need to upgrade and update and become more customer friendly and educative to allure the consumers. Transparency and disclosure will also help the customers gain confidence.” %% {{Influx of Corporate Jewellery Houses}} %% Agreeing to the point that Indian manufacturers feel threatened due to the influx of corporate and stylish jewellery brands, he says, “Traditional customers still opt for their family jewellers but these brands (corporate jewellery houses) surely allure the younger and new customer base which is coming up very strongly. This might worry the manufacturers a bit but if tackled well and with disclosure, hall marking and certification, this can be tackled easily as they can be at par with any other brands coming up.”%% {{Growth Forecast}} %% Ending on a positive hope, he concludes, “I hope to see growth and a better 2014 rather than the slow 2013 period.” %%

Krizz, a unit of Kanishk Gold Pvt Ltd, has been a pioneer in designing, crafting and manufacturing in the jewellery industry for more than a decade. Uniqueness and quality being its signature standard, Krizz strives hard to raise the bar in the fashion jewellery by creating stunning master pieces thereby setting new standards to the art form of jewel making that augment expectations of the ever demanding customers. We spoke to Bhupesh Jain, Managing Director, Krizz to know his view on the topic. %% {{Slow Growth of Jewellery Retail}} %% The U.S. and China have performed better in terms of jewellery retail in 2013. The 2013 revenue growth through jewellery retail in India has been much slower than 2012 and sentiment is adverse across all segments of the gems and jewellery trade. The market has been sluggish and this is felt across the jewellery industry, Bhupesh Jain says. %% {{Reasons For Downtrend }} $$ Reasoning his statement, he adds, “This is an open secret that the contributing factors are Government policies towards yellow metal, devaluation of rupee and the adverse economic climate.”%% {{Effect of Weakened Rupee }} $$ Commenting on the effect of the spiraling rupee on jewellery and gems market, he says, “The devaluation of rupee has promoted the Government of India to impose special rules and regulations on yellow metal which has impacted the industry considerably. India has never witnessed such a shortage of yellow metal,” he explains. The scarcity of gold has made the prices sky rocket, keeping the consumers at bay. This has also given rise to rampant smuggling of gold.%% {{Effect of General Economic Conditions}} $$ He then, moves on to the economic conditions of India that is affecting the industry, “The devaluation of rupee, import restrictions, high inflation and coupled with impending general elections have not been kind to the industry. We expect the second half of 2014 might ease the situation in favour of the industry.” %% {{Buying Habits of Young India}} $$ When quizzed about the lack of interest in youth towards buying jewellery, he strongly admits, “I am afraid that I have to violently agree as young urban Indians are more attracted towards the gadgets and fashion and luxury items owing to strong peer pressure. Lack of attractive and appealing designs from the industry has also not helped the industry.” %% {{Obsolete Outlook of Industry}} $$ Is traditional outlook of the industry to be blamed for this, we wondered. To this he replies, “I think this cannot be said across India as the rural population still would like to be in conformity with the traditions as against the young urban Indians.” %% {{Retailers’ Role }} $$ When asked if the Indian retailers are lacking in attracting consumers, he says, “I am not sure lacking is the right word. On the contrary, the industry environment, which has been impacted by various factors, has created an impression, which is deceptive. We need to wait for the economic situation to improve to understand opportunities better.” %% {{Influx of Corporate Jewellery Houses }} $$ When quizzed if Indian manufacturers feel threatened due to the influx of corporate and stylish jewellery brands like Forevermark? He answers, “Any industry including jewellery needs healthy competition in the form of newness, creativity and novelty as this would act as a catalyst and bring out the best in the industry and the customers will be the total beneficiary.” %% {{Growth Forecast}} $$ With the hopes of being the worst being past us, all the industry members are hoping for the best in 2014. Jain too concludes on a hopeful note, “The second half of 2014 should work in favour of the industry.”%%

With over a century of expertise using the finest craftsmanship, KGK Group has surpassed all obstacles to be at the top of the game. Their retail foray with KGK Entice has evolved by taking gemstones of the highest caliber from its parent company, KGK, to present a collection of diamond-studded jewellery of exceptional quality. The brand was launched at the turn of the millennium in 2004, in Hong Kong. Following a huge success with boutiques in Hong Kong and China and they deemed India to be ready for contemporary designs. Entice boutiques were launched in Jaipur, Mumbai and New Delhi to an overwhelming response. We spoke to Jitender Jain, CEO, Entice to know his view on the issue.%% {{Slow Growth of Jewellery Retail}} $$ When asked if he agreed to De Beers report that India’s retail growth has not been at power to China and U.S. in the year of 2013, he concurred and added, “Yes, the jewellery retail growth in India is relatively slow and has lost momentum. But, we foresee that the situation will look positive soon.” %% {{Reasons for Downtrend}} $$ Throwing light on the reasons for the lack of momentum, he shares, “There are various reasons, the biggest reason being the economic uncertainty in the market with major price fluctuations. This clubbed with political uncertainty are leading to negative sentiments in the market that is negatively affecting the jewellery retail in India.” %% {{Effect of Weakened Rupee}} $$ India imported 31 million carats of rough diamonds in April-May 2013, up about 26 per cent from the same period in 2012, according to data from the Gems and Jewellery Export Promotion Council (GJEPC). Does this mean that the spiraling rupee has failed to wash off the shine from diamond and diamondstudded jewellery business in India? Jain disagrees and says, “Fluctuating rupee hits the prices of diamonds and gold in a major way, making jewellery purchase very exorbitant for Indian masses. The sentiment in the market is also affected by the weakening rupee, which has a negative impact on most big-ticket purchases, including jewellery.” %% {{Effect of General Economic Conditions}} $$ Talking more about the market sentiment and the economics conditions of India, he states, “The gold import control policies leading to non availability of gold, decreases consumers’ confidence in the industry. We are waiting for the government to reduce or remove these control policies all together. The move should help smoothen the situation.” %% {{Buying Habits of Young India}} $$ When asked if he thinks the young and urban Indians with large disposable incomes are more inclined towards gadgets and couture rather than jewellery, he agrees. “Yes, the new generation is not too inclined towards spending on jewellery. They would rather pick up cars or gadgets instead of gold or diamond jewellery,” he says %% {{Retailers’ Role}} $$ Advising ways to help the market grow, he suggests, “A lot needs to be done in the jewellery market in order catch the attention of the youth. We some how need to get their interests back in buying jewellery. Also, enhanced transparency in the working of the industry is required to win the trust back.”%% {{Influx of Corporate Jewellery Houses}} $$ Do Indian manufacturers feel threatened due to the influx of corporate and stylish jewellery brands like Forevermark, we wondered. To this he says, “They are not threats at all. In fact, they actually help the market to get back its consumers. These brands are here to stay and they are needed for the growth of the industry.” %% {{Growth Forecast}} $$ Giving an outlook for the future, he states, “We are eagerly waiting for the elections and a more stable Government to come in power. This would turn things around in a positive manner for the coming financial year.”%%

From a first generation diamond manufacturer to one of Asia’s largest diamond jewellery exporters, Kama Schachter is embodied with unrivalled expertise in the art of designing, manufacturing, exporting and marketing of diamond jewellery. Thus, it will be interesting to know the expert view of Colin Shah, Managing Director, Kama Schachter on this topic. %% {{Slow Growth of Jewellery Retail}} $$ When quizzed about reasons affecting the India’s retail growth as compared to China and U.S., Colin Shah reasons, “The year 2013 has been a challenging year for the industry. There were many factors that affected the demand and manufacturing of diamond jewellery last year. The challenging economic conditions, depreciating rupee, decreased consumer consumer confidence and volatility in the price of gold have resulted in the decline last year. We are hoping that 2014 will be an optimistic year for the industry and its stability.” %% {{Effect of Weakened Rupee}} $$ Gauging the effect of the spiralling rupee on jewellery and gems market, he says, “Of course, fluctuations in the value of rupee does affect the price of gold. When the rupee depreciates, gold gets costly. The rupee depreciation, on the one hand, increased the cost of gold imports and on the other, has also resulted in the Government to impose restrictions on imports and sale.”%% {{Effect of General Economic Conditions}} $$ The Indian diamond jewellery market is pegged at $8.5 billion with the YOY increase of around 15- 20 per cent. However, last year was disappointing in terms of growth for the industry. Highlighting the economic condition of the industry, he shares, “The challenging economic conditions and devaluation of the rupee have definitely affected the business and the industry.” He adds, “Right now we are being optimistic about 2014 and expect the markets to stabilise a little with steady growth in diamond jewellery demand this year.” %% {{Buying Habits of Young India}} $$ Talking about the buying habits of the technologically inclined youth of India, he defends, “It would be wrong to say that the youth of today is not purchasing jewellery. The youth may not indulge in huge purchases, but they do put their money in jewellery. The urban population is more conscious while making jewellery purchases. They purchase jewellery for wearable purposes more than for the sake of investment.” Coming to the role played by the young generation in the industry, he positively opines, “I was 17 when I first entered the industry. Now when I look back after being in the business for 16 years, I know we have had many accomplishments but there is a lot to still achieve. There are many young turks in the industry who were a part of the trade and were successful. There are also so many young entrepreneurs in this business who are doing well for themselves and contributing their share to the industry. So I do not think the industry is not popular among the youth.” %% {{Retailers’ Role}} $$ Is there any shortfall in the efforts undertaken by retailers was our next question. Coming to the retailers, he says, “I think retailers are doing what they should to attract customers. It’s a huge market out there. Innovative marketing and advertising campaigns, design innovations, use of social media and affordable price points are what the retailers offer to a customer. This is what is attracting them to the stores. The retailers may not be looking at expansions but they are doing considerably good.” %% {{Growth Forecast}} %% Wrapping up the conversation, he concludes on a positive note, “Being cautiously optimistic about this year, I am hoping 2014 will be a little stable in terms of business and growth. We should not see any further deflation. This year will give way for a better 2015.” %%

Amore Jewels is one of the most leading names in princess, baguette and trapezium-cut diamond studded jewellery. It is renowned for its technical knowhow and vivid designs. The company is part of the Barmecha Group, which is one of the largest producers of princess and baguette cut diamonds. Amore Jewels has a state-of-the-art 18,000 sq. ft. factory with the most advanced technology and skilled staff. Shantilal Barmecha, the managing director is one of the most respected names in the industry and he is also one of the trailblazers to break new grounds. It was our honour to have his viewpoints on this issue.%% {{Slow Growth of Jewellery Retail}} $$ The De Beers report has stated that the jewellery retail growth of India was much slower compared to U.S. and China. India Ratings report suggested that the domestic jewellery retailers’ revenue grew in the range of 15-25 per cent in 2013 from around 40 per cent in 2012. When we asked Barmecha for his opinions on these findings, he stated, “Yes, I agree to this. But, it is not a very alarming situation. India is a country of variables and as it is not as organised as the U.S., it has its own potential and movements. I am a strong believer of Indian local market and I am sure it will rise up again.” %% {{Reasons for Downtrend}} $$ Throwing light on the reasons of downtrend, he opines, “The first and foremost reason is the increased duties on gold imports from 5 per cent to 10 per cent by the Indian Government. Secondly, the restrictions applied to the industry in terms of acquiring gold for local market supplies is an obstacle. Many jewellers, due to the lack of gold supplies, recycled their inventories and renewed their stocks to survive the lack of gold supplies.” %% {{Effect of Weakened Rupee}} $$ Though most manufacturers agreed that the spiraling rupee did have an adverse impact on the jewellery industry, Barmecha offers a different point of view. “The spiraling rupee did not have any direct impact on the trade circles except that the consumer could not stabilise their arithmetic. This uncertainty did not allow them to get committed for the variable price structures of gold and diamonds, hence it affected their buying behavior.”%% {{Effect of General Economic Conditions }} $$ Speaking about the economic conditions of India, he states, “The economic condition of India is very, very positive for our industry. Though the stocks have failed the people’s psychology, the land appreciations in tier II and tier III cities have given a good up lift to the industry. The industry should feel comfortable with this impact as it will be favourable for our trade in the long run.” %% {{Buying Habits of Young India}} $$ When asked if the young and urban Indians with large disposable incomes are more inclined towards gadgets and couture rather than jewellery, he concurs and explains, “Although it is true, I believe it is an initial passing phase and soon will fade out. According to me, it is a temporary diversion.” %% {{Retailers’ Role }} $$ Where do you think the Indian retailers are lacking in attracting consumers, was our next question to him. To this, he answers, “It is just the transparency and confidence built up, which is missing in the Indian retail. Secondly, it is also lacking the sale concepts, which could build up the continuous need of repeated sales. I also believe that the industry should think about the ‘unit sale pricing’ approach to give a comfort feel to the customer.” %% {{Growth Forecast}} $$ He concluded the conversation on a hopeful note. “I am very positive about the future. Though the phases may be varied and transient, there will be a potential growth in the market in totality,” he signs off.%%

Emerald Jewel Industry India Limited also known as Emerald started its business by working with goldsmiths and then established its own manufacturing in 1992. It transformed conventional methods of jewellery manufacturing into technology and talent driven process. The ultramodern manufacturing facilities in Coimbatore are an example of the same. Emerald today has emerged as the largest manufacturer of gold jewellery in the whole of Asia. K. Srinivasan, Managing Director, Emerald, has 29 years of rich and varied experience in the field of jewellery manufacturing and thus his inputs for this story were invaluable.%% {{Slow Growth of Jewellery Retail}} $$ When asked if K. Srinivasan agreed to the reports that state, the jewellery retail in India has been weaker in 2013, he concurs and says, “Yes, I agree. The jewellery industry of India in 2013 was down by 12 -15 per cent on YOY basis. We have experienced this descend and the retailers’ gusto for buying was missing.”%% {{Reasons For Downtrend}} $$ Shedding light on the reasons for this downtrend, he opines, “There are several reasons for it. Most of which are not in control of the jewellers. Reasons such as price fluctuations in gold and 10 per cent import duty levied by Government are the majors. Basically, in a nut shell one can say that the lack of Government support to the jewellery industry has caused this downtrend in jewellery retail.”%% {{Effect of Weakened Rupee}} $$ “Also, due to the rupee depreciation there is no scope for leasing. This results in importers paying the the full price upfront, which increases the capital costs. This makes the jeweller to shrink his profit margins to retain the earlier prices or he has to pass it on the consumers. The consumers are not ready to pay the higher price and shun away from buying jewellery,” he explains. %% {{Effect of General Economic Conditions}} $$ Talking about the current economic conditions of our country, he states, “ The large CAD (current account deficit) is a major worry for the government and the government has enforced stringent rules to curb the gold imports and end consumers are asked to refrain from buying gold.” %% {{Buying Habits of Young India}} $$ While discussing the buying habits of the youth of India, which are not too inclined toward buying jewellery, he states, “Today’s young generation is a ‘gadget generation’. They prefer to be stylish with the help of gadgets and couture. But, jewellery industry is not taking this competition from other verticals in a light way. The jewellers are launching new collections for daily wear purpose, which has also started attracting the youth.” %% {{Obsolete Outlook of Industry}} $$ We then asked if it is the obsolete, traditional outlook of the jewellery industry that is a culprit for the lower jewellery sales? To this he disagrees completely and explains, “Our industry is bringing about an innovation in their products, marketing strategies, advertising and customer reach to catch up with the young Indians. Now, almost every jewellery brand has its own pages on Facebook and Twitter handles. Also, the E- Commerce especially in jewellery sector has increased by 88 per cent on YOY basis. This clearly shows that our industry does not have only a traditional appearance.” %% {{Retailers’ Role}} $$ When asked if he thinks the Indian retailers are lacking in some arena when it comes to attracting consumers, K. Srinivasan is in a deep thought and later shares, “I think they are lacking in segmented advertising and they are not doing their part enough in spreading awareness about jewellery knowledge.” %% {{Growth Forecast}} $$ Foreseeing the growth prospects, he concludes by saying, “The Government should take immediate action to reduce import duty from 10 per cent to 2 per cent to make the industry buoyant again. If this happens we can definitely see a growth graph in 2014. Also, I believe online jewellery retail is making a big buzz for the future growth.”%%

Gold Star is one of the most eminent diamond and jewellery companies in the world. Right from rough to polished diamonds to exceptionally fine jewellery, Gold Star’s fervor for supremacy reflects in everything they accomplish. Hence we spoke to Hemil Mody, Director, Gold Star Jewellery India Pvt. Ltd. to know his opinion. %% {{ Slowdown of Jewellery Retail}} $$ Agreeing to report that India’s retail growth has not been at par to China and U.S., he says, “Yes we too, experienced a slight slowdown especially towards the end of 2013.” %% {{Reasons For Downtrend}} $$ The reasons are varied. “It all started with the devaluation of the rupee. Then came the booming prices of gold especially in domestic market due to duty and other taxes on domestic gold purchase, followed by rise in prices of the diamond rough. As it is, we as an industry face a lot of competition from the other luxury industries such as the mobile industry and the holiday and fashion industries. We do not indulge in half the amounts of advertising budgets as our competitor industries do and therefore all the other aspects go against us. What I see is the positive in all this is that we are still surviving. We ought to be really strong to have survived so far.” %% {{ Effect of Weakened Rupee}} $$ Talking about the spiraling rupee, he states, “Due to rupee depreciation, price of gold and diamonds are high in comparison to other markets and hence the cost of jewellery products are also high resulting in decrease in sales.” %% {{Effect of General Economic Conditions}} $$ Economic condition is also not well due to rupee depreciation as well as lots of restriction by Government for import of gold, etc. due to balance of payment issue. “This will decrease over the period but only if a stable Government comes in power after the elections in May,” he says.%% {{Buying Habits of Young India}} $$ While agreeing to the point that the young and urban Indians with large disposable incomes are more inclined towards gadgets and couture rather than jewellery, he says, “Yes, I definitely think that the young and urban Indians are more inclined towards gadgets, couture and let me add holidays rather than jewellery. Well, gadgets are no longer luxuries but more so necessities. Also, with the fast-paced lifestyle, my wife too would prefer to get away from this city rather than have a new piece of jewellery. This would be a stress buster as well as a status booster.” He further adds, “We still promote jewellery as investments and we still advertise mainly huge bridal sets which are seldom re-worn and now with multiple functions being in trend, bridal sets are not enough and unaffordable. We as an industry need to promote jewellery as ‘must haves’ on the fashion front. We also need to advertise it as luxury products in a much stronger way.”%% {{Influx of Corporate Jewellery Houses}} $$ Disagreeing to the point that Indian manufacturers feel threatened due to the influx of corporate and stylish jewellery brands like Forevermark, he says, “I do not believe that the Indian manufacturers feel threatened by them, and they shouldn’t. What they need to realise is that the strategy of these brands is a good one of promoting specific designs, as ‘must haves’. They are following the strategy of accessory brands that have worked extremely well with the young generation. We must build new desire.” %% {{Growth Forecast}} $$ Wrapping with an advice, he concludes, “I believe that until we do not ourselves accept the changed ideologies and do not apply the new strategies, growth will always be slow paced. The growth is up to us.”%%

Kiran Gems is one of the world’s largest manufacturers of diamonds. They carry out a massive production of nearly 1.6 million carats of polished diamonds; facilitating the growth of over 1,000 jeweller businesses worldwide. Moving further in the value chain, Kiran manufactures diamond jewellery. The brand is known as Kiran Jewels. The company is one of the top three jewellery suppliers to the most revered and established jewellery retailers. We requested Varun Lakhani, Partner, Kiran Jewels to share his insights on the issue.%% {{Slowdown of Jewellery Retail}} $$ When asked if he agrees to the De Beers report stating that India’s jewellery retail growth has not been at power with China and U.S., Varun states, “Yes, we believe that the retail growth of India has not been achieved as much it could have been. The business levels with Indian retailers were matching the previous volumes with only slight increase. However, the scenario is much better in this prevailing quarter.”%% {{Reasons For Downtrend}} $$ One of the main reasons for the downtrend according to the jewellers was the lack or the lack of speed of demand for jewellery amongst the consumers. Varun shares this viewpoint, too. He explains, “The delayed purchases from the side of the end consumers can be one of the prime reasons for this downtrend.”%% {{Effect of Weakened Rupee}} $$ Throwing light on one more reason for the downtrend, he says, “The direct effect of the weakened rupee is the price increase. But, international and economic dynamics are beyond anybody’s personal capacity. Hence, we believe that the focus should rather be on building abilities to create more demand.” %% {{Effect of General Economic Conditions}} $$ Talking about the economic conditions of the country, Varun shows a different side of the scenario. “In India, the economic conditions have a mixed effect on the industry. It is good as it is getting business even more streamlined in terms of operations, finances, marketing and formulation of overall strategy,” explains he. %% {{Buying Habits of Young India}} $$ Talking about young India’s buying habits, he states, in a matter-of-factly way, “It is the age of consumerism. The more something is visible to the consumer, the larger are the chances of getting that item sold. The one major trend observed in these industries is of obsolesce. The trends keep changing in these segments and they do not last forever. However, in jewellery the classis sense prevails, i.e. that jewellery is known to last for generations.”%% {{Obsolete Outlook}} $$ Talking about the traditional outlook of the industry, which is making it less popular amongst young Indians, he confirms, “May be yes, the traditional outlook does affect the industry in an adverse way. But, there are efforts from various companies at the retail level, which are in tandem with the culture of this generation of Indians.” %% {{Retailers’ Role}} $$ “Indian retailers are falling short in meeting with the expectations of Indian customers in terms of professionalism in their approach, transparency in trade, availability of multi locations and aftersales services. Paying close attention to these may go a long way in attracting new customers and keeping old customers happy,” he suggests.%% {{Influx of Corporate Jewellery Houses}} $$ Talking about the influx of the corporate jewellery houses and its effect on the Indian jewellery manufacturers, he states, “I agree to the fact that the corporate and stylish jewellery brands would have a larger consumer appeal and help industry to add extra customers. But, do they threaten the Indian manufacturers? No, as most of them are manufactured in India. Their strength is that they brand and market the product well.” %%

{{Growth Forecast}} %% Concluding the conversation with the growth forecast he says, “Comparing yearly QoQ, the first quarter has been better. We believe this would continue for rest of the year, too.”