|*For centuries, the Indian jewellery industry chugged on along much the same lines, with very little changing from year to year. Sure there was an increase in the size of the market, over the years. Sure, the quantity and value of sales grew. But the industry itself remained fundamentally the same, with very little change – in terms of processes, designs, retail space, professionalism etc. However, with the country itself undergoing a metamorphosis, a transformation began taking place within the industry as well. The first decade of this century and millennium has witnessed the widest, deepest and most far-reaching changes yet, is the unanimous feeling within the industry. Nilan Singh speaks to some industry veterans, representing different segments of the business to outline and analyse the contours of the changes that have taken place in the Indian jewellery industry over this decade.*|%% Think Indian jewellery, think tradition – that was the widespread view for many, many decades, even when India began exporting jewellery to markets all over the world. Initially, it was a well known fact that jewellery exports from this country catered mainly to the Indian – at most, Asian – diaspora all over the world. %% Within India, jewellery is intrinsically woven into the pattern of the social fabric, since time immemorial. It is part of life from birth and through all rites of passage. The significance of gold and jewellery in several religious festivals of this vibrantly multicultural country, further added to its allure. And since centuries, in a country which had little other choices to offer the general populace, gold jewellery was seen as the best investment. India achieved the distinction of being the highest importer of gold, and for several years imported on an average around 800 tonnes, before rising prices, the global financial crisis and the development of more sophisticated trading opportunities in gold investment/trading impacted its off-take to some extent. It still however, remained the country which consumed the highest amount of gold. %% The jewellery industry though widespread – everyone knows just how deep the penetration of retailers is even in rural areas – was rooted in tradition. Gold jewellery remained the mainstay, and manufacturing skills were passed from generation to generation of craftsmen with designs being similarly handed down the family tree. Though highly artistic and skilled in their own way, manufacturing quality left much to be desired, as even quite late in the day – comparatively peaking – technology only of the most rudimentary kind was used. And so it went on. Till a big change came about and India’s jewellery manufacturing industry took the big leap forward. The transformation was not piecemeal, it did not affect just one aspect, but touched upon the many facets that make up the jewellery industry, and has changed the face of this business.

{{From Investment to Fashion }}%% “The past decade has wrought the greatest change in the jewellery industry, as everyone knows” says Ashok Minawala, a seasoned retailer from the Danabhai group, who introduced a new concept with his Pallazzio format, and the past – and first – Chairman of the All India Gem & Jewellery Trade Federation (GJF) which was formed in 2005. %% Prasad Kapre, Managing Director of Blue Skies Business Management Group, Co-Chairman of the FICCI Committee on Gems & Jewellery and past Business Director of De Beers Group Marketing in India, sees the change as being twin pronged. “There has been a transformation on two fronts: at the consumer level, and at the trade level,” he explains. %% Where the consumer is concerned he outlines a shift in the mindset: “Due to several factors like growing affluence; exposure to media; the influx of new brands in the market; marketing efforts by the DTC, which led to several brands like Nakshatra and others all resulted in the consumer thinking very differently. There was a shift from the investment mentality to seeing jewellery as a fashion accessory. Something which had to match the wardrobe, be suitable for different occasions and so on. There was a change in consumer preference and taste.” Needless to say, a change in consumer taste, threw up the demand for a different kind of jewellery. %% “The trade is driven by consumer demand,” Kapre continues to elucidate. “And there is a huge transformation that has taken place in the business - actually across the famous four Ps of marketing. It is evident in the kind of merchandise that retailers are now stocking on shelves; in the store ambience and shopping experience they are providing.” %% {{Diamond Driven}}%% Sanjay Kothari, Vice Chairman of The Gem & Jewellery Export Promotion Council, and who has been Chairman f the body for several terms earlier, and himself a diamond and jewellery exporter, being part of Kunal Diamonds and Diatrends, the jewellery manufacturing company, feels that where the product is concerned, one of the most significant changes that has occurred this decade is the advent of diamond jewellery. “From an affinity to gold, the Indian consumer has become a great consumer of diamond jewellery, and there has been fast-paced growth in the diamond jewellery segment in this decade. India and China are the fastest growing diamond markets in the world and the future of this industry.” In fact, according to research and analysts, the diamond markets of the two Asian giants are poised together equal the size of the US market in a decade or so. %% Kothari also points out that the strong demand within the country helped the diamond industry ride out the recession which had a negative impact on many other diamond manufacturing and exporting centres of the world.

{{Product Upgradation}}%% Touching upon the product development, Haresh Zaveri, Convener of the Exhibitions Sub-Committee of the GJEPC, and of jewellery manufacturer Pra-Mak International, which also retails to a select clientele says, “Innovation in design has come to the forefront.” He adds, “Today consumers demand jewellery for so many different occasions: they want something different for the day, something to wear to the office, something else for evenings and something altogether different for special occasions and marriages and so on. Tastes have also changed. Now it is not just about the typical mangalsutra or pendant. There is a vast variety of designs that manufactures create.” %% Kothari points out that the entry into the market of a younger segment of consumer, and jewellery being perceived as a fashion accessory, and to some extent the high price of gold, has also created a large demand for lightweight jewellery; there is also a change in preference for western style jewellery. Further, he adds that there has been a leap in the manufacturing and resulting quality standards. “There has been a great deal of collaboration with Italy, including on the technological front,” says Kothari. “As a result both designs and quality of finish etc has improved greatly.” %% In fact, the leading jewellery manufactures in India today have not only caught up with the technological levels of western countries but remain at the forefront and at the cutting edge. %% What is more, the fact that the change on the design and quality front is not limited to diamond jewellery, which is, relatively speaking, the newer segment but also in the gold jewellery being manufactured in the country today. From the plain gold chain – a basic in jewellery – to heavier sets, there is a revolution in the jewellery being created. %% {{Core Competency}}%% An important aspect of the change is the specialization which is developing. “One important trend we have seen this decade, is that there is a greater separating out of roles,” elaborates Kothari. “Earlier, the retailer was also a manufacturer and was performing both tasks. Today, more and more retailers have stopped manufacturing and are sourcing from manufacturers who are specialised in that area.” %% This has helped each segment concentrate on its area of activity – both in terms of finance and attention – and that in turn has led to a qualitative change in both areas. And apart from the upgradation that has taken place in the product (discussed above) there has been a sea-change in the stores as well, at least, again, amongst the leading jewelers of India. %% Hence, one sees stores undergoing a makeover. There is an emphasis on getting professional help on all aspects – from designing interiors, to lighting to visual merchandising to staff training. Also, retailers are expanding from single store formats to multi-store formats – which could be within a single city covering different locations or across two or more cities.

{{New Formats, New Segments }}%% The biggest development in modern retail formats has been the rise of malls, earlier an unknown quantity in India, but most popular in developed countries the worldover. According to a report by well-known global property management consultant Knight Frank, released earlier this year, in 1999, India had just three shopping malls covering an area of one million sq ft between them; by the end of 2006, the total mall space rose to 28 million sq ft, an addition of roughly 3.9 mn sq. ft. per year. Post 2006, there has been an addition of approximately 8 mn sq.ft. annually, taking the total mall space pan India to 52 mn sq ft by end 2009. %% As a greater and greater proportion of the jewellery industry moves from the fragmented unorganised sector and comes within the organized segment, one sees jewellery outlets opening up in these malls as well. The growing presence of jewellery in malls and the move into the organised sector is linked to one other strong development of this decade – the entry of a plethora of jewellery brands. First it was De Beers’ DTC which introduced a spate of brands which was part of their strategy to popularise diamond jewellery. They also encouraged their sightholders – clients to whom they supplied rough diamonds and which were large Indian diamond companies -- to move “downstream” and maximize value for their diamonds. The result was that the birth of about 40-50 brands and a vast array of choice for the consumer. And, as the brands came with an unbelievably low tag at the entry level, they not only helped popularise diamond jewellery but also increased the self-purchase segment and lowered its age bracket as well. %% Talking of different segments entering the market, there has been a major shift in the consumer preferences in Tier II & Tier III cities and towns as well, and one sees an increasing market in those places for diamond jewellery as well as modern, lightweight jewellery, where earlier the tendency was only to purchase traditional, heavy gold jewellery, mainly during marriages. %% {{Towards Transparency}}%% Perhaps one of the most crucial areas which has seen a change is in the area of transparency and business ethics and practices. While everyone feels that these issues have come to the forefront and there has been a great change on this front, Minawala has an interesting insight to provide. “One of the most crucial milestones for the jewellery industry in recent times was the abolition of the Gold Control Act in 1990-91,” he says. “The perception was that now there would be a large number of jewellery stores opening up. But that did not happen till the turn of the century, when there was a large influx of jewellery outlets opening and people from different segments, different communities and different business and other backgrounds entered the industry, who had no connection with the jewellery industry earlier.” %% That changed the dynamics of the industry fundamentally. Minawala feels that these people came to the industry with a fresh outlook and brought to the industry new norms, new methods of doing business, new ethics and practices not having learnt the ”tricks of the trade” so to speak, from earlier generations in the business. “These people set new benchmarks: they created jewellery with innovative designs and high quality standards; adopted the latest technology and manufactured machine made instead of just handmade jewellery; assured the consumer of melting quality before hallmarking came up, and generally created a new niche in the market,” elaborates Minawala. “Post 2000, a number of retailers moved to having multiple outlets and saw a number of corporates coming into the business.”

Apart from the “outsiders” there has been a huge move of Indian diamond export businesses entering the domestic market says Kothari. With their experience of international markets, and propensity to do business along internationally accepted standards also made an impact on the Indian retail industry in terms of both product as well as business ethics. %% A younger, more aware consumer who is exposed to information in the rest of the world has also become more demanding. She seeks quality and assurances on purity. This has led to a big boom in the area of diamond certification and hallmarking. International laboratories like GIA, IGI and HRD and several others set up operations in India and they offer their services not merely in metros and big cities, but also smaller cities and towns. Even when hallmarking is not compulsory, you see that all the major jewellers keep hallmarked product in their showrooms. %% With changes taking place on so many fronts there is naturally a difference in which the business is run. “There is certainly more professionalism in the business,” points out Kothari. “The younger generation has played an important role and employed qualified professionals, and found that the business really benefited as a result. There are some who have stuck to the old family business style. They have also grown, but not to that extent.” %% Kapre however feels that though this process has begun, there is still a long way to go, and that professionals are still wary of entering the jewellery business which they see as both lacking transparency and a clear growth path. Hence, he says that this is an area that will be the issue before the industry in the coming decade - getting more professional and the streamlining of systems and processes. This and the financing of the jewellery industry. As the industry has not by and large had transparent systems, availing of institutional finance has been difficult for most players, except those who are corporatised and put the requisite systems in place. %% While this decade has seen a revolutionary change in the India jewellery industry, the coming decade will see another leap taking place. With analysts estimating that only 5-7 of the jewellery industry falls within the organised sector, the next frontier to conquer is for a larger chunk of the business to make the move from the unorganised to the organised sectors. That is what will help the jewellery industry remain relevant, and help stave off the competition from other segments and products more effectively.

|*For centuries, the Indian jewellery industry chugged on along much the same lines, with very little changing from year to year. Sure there was an increase in the size of the market, over the years. Sure, the quantity and value of sales grew. But the industry itself remained fundamentally the same, with very little change – in terms of processes, designs, retail space, professionalism etc. However, with the country itself undergoing a metamorphosis, a transformation began taking place within the industry as well. The first decade of this century and millennium has witnessed the widest, deepest and most far-reaching changes yet, is the unanimous feeling within the industry. Nilan Singh speaks to some industry veterans, representing different segments of the business to outline and analyse the contours of the changes that have taken place in the Indian jewellery industry over this decade.*|%% Think Indian jewellery, think tradition – that was the widespread view for many, many decades, even when India began exporting jewellery to markets all over the world. Initially, it was a well known fact that jewellery exports from this country catered mainly to the Indian – at most, Asian – diaspora all over the world. %% Within India, jewellery is intrinsically woven into the pattern of the social fabric, since time immemorial. It is part of life from birth and through all rites of passage. The significance of gold and jewellery in several religious festivals of this vibrantly multicultural country, further added to its allure. And since centuries, in a country which had little other choices to offer the general populace, gold jewellery was seen as the best investment. India achieved the distinction of being the highest importer of gold, and for several years imported on an average around 800 tonnes, before rising prices, the global financial crisis and the development of more sophisticated trading opportunities in gold investment/trading impacted its off-take to some extent. It still however, remained the country which consumed the highest amount of gold. %% The jewellery industry though widespread – everyone knows just how deep the penetration of retailers is even in rural areas – was rooted in tradition. Gold jewellery remained the mainstay, and manufacturing skills were passed from generation to generation of craftsmen with designs being similarly handed down the family tree. Though highly artistic and skilled in their own way, manufacturing quality left much to be desired, as even quite late in the day – comparatively peaking – technology only of the most rudimentary kind was used. And so it went on. Till a big change came about and India’s jewellery manufacturing industry took the big leap forward. The transformation was not piecemeal, it did not affect just one aspect, but touched upon the many facets that make up the jewellery industry, and has changed the face of this business.

{{From Investment to Fashion }}%% “The past decade has wrought the greatest change in the jewellery industry, as everyone knows” says Ashok Minawala, a seasoned retailer from the Danabhai group, who introduced a new concept with his Pallazzio format, and the past – and first – Chairman of the All India Gem & Jewellery Trade Federation (GJF) which was formed in 2005. %% Prasad Kapre, Managing Director of Blue Skies Business Management Group, Co-Chairman of the FICCI Committee on Gems & Jewellery and past Business Director of De Beers Group Marketing in India, sees the change as being twin pronged. “There has been a transformation on two fronts: at the consumer level, and at the trade level,” he explains. %% Where the consumer is concerned he outlines a shift in the mindset: “Due to several factors like growing affluence; exposure to media; the influx of new brands in the market; marketing efforts by the DTC, which led to several brands like Nakshatra and others all resulted in the consumer thinking very differently. There was a shift from the investment mentality to seeing jewellery as a fashion accessory. Something which had to match the wardrobe, be suitable for different occasions and so on. There was a change in consumer preference and taste.” Needless to say, a change in consumer taste, threw up the demand for a different kind of jewellery. %% “The trade is driven by consumer demand,” Kapre continues to elucidate. “And there is a huge transformation that has taken place in the business - actually across the famous four Ps of marketing. It is evident in the kind of merchandise that retailers are now stocking on shelves; in the store ambience and shopping experience they are providing.” %% {{Diamond Driven}}%% Sanjay Kothari, Vice Chairman of The Gem & Jewellery Export Promotion Council, and who has been Chairman f the body for several terms earlier, and himself a diamond and jewellery exporter, being part of Kunal Diamonds and Diatrends, the jewellery manufacturing company, feels that where the product is concerned, one of the most significant changes that has occurred this decade is the advent of diamond jewellery. “From an affinity to gold, the Indian consumer has become a great consumer of diamond jewellery, and there has been fast-paced growth in the diamond jewellery segment in this decade. India and China are the fastest growing diamond markets in the world and the future of this industry.” In fact, according to research and analysts, the diamond markets of the two Asian giants are poised together equal the size of the US market in a decade or so. %% Kothari also points out that the strong demand within the country helped the diamond industry ride out the recession which had a negative impact on many other diamond manufacturing and exporting centres of the world.

{{Product Upgradation}}%% Touching upon the product development, Haresh Zaveri, Convener of the Exhibitions Sub-Committee of the GJEPC, and of jewellery manufacturer Pra-Mak International, which also retails to a select clientele says, “Innovation in design has come to the forefront.” He adds, “Today consumers demand jewellery for so many different occasions: they want something different for the day, something to wear to the office, something else for evenings and something altogether different for special occasions and marriages and so on. Tastes have also changed. Now it is not just about the typical mangalsutra or pendant. There is a vast variety of designs that manufactures create.” %% Kothari points out that the entry into the market of a younger segment of consumer, and jewellery being perceived as a fashion accessory, and to some extent the high price of gold, has also created a large demand for lightweight jewellery; there is also a change in preference for western style jewellery. Further, he adds that there has been a leap in the manufacturing and resulting quality standards. “There has been a great deal of collaboration with Italy, including on the technological front,” says Kothari. “As a result both designs and quality of finish etc has improved greatly.” %% In fact, the leading jewellery manufactures in India today have not only caught up with the technological levels of western countries but remain at the forefront and at the cutting edge. %% What is more, the fact that the change on the design and quality front is not limited to diamond jewellery, which is, relatively speaking, the newer segment but also in the gold jewellery being manufactured in the country today. From the plain gold chain – a basic in jewellery – to heavier sets, there is a revolution in the jewellery being created. %% {{Core Competency}}%% An important aspect of the change is the specialization which is developing. “One important trend we have seen this decade, is that there is a greater separating out of roles,” elaborates Kothari. “Earlier, the retailer was also a manufacturer and was performing both tasks. Today, more and more retailers have stopped manufacturing and are sourcing from manufacturers who are specialised in that area.” %% This has helped each segment concentrate on its area of activity – both in terms of finance and attention – and that in turn has led to a qualitative change in both areas. And apart from the upgradation that has taken place in the product (discussed above) there has been a sea-change in the stores as well, at least, again, amongst the leading jewelers of India. %% Hence, one sees stores undergoing a makeover. There is an emphasis on getting professional help on all aspects – from designing interiors, to lighting to visual merchandising to staff training. Also, retailers are expanding from single store formats to multi-store formats – which could be within a single city covering different locations or across two or more cities.

{{New Formats, New Segments }}%% The biggest development in modern retail formats has been the rise of malls, earlier an unknown quantity in India, but most popular in developed countries the worldover. According to a report by well-known global property management consultant Knight Frank, released earlier this year, in 1999, India had just three shopping malls covering an area of one million sq ft between them; by the end of 2006, the total mall space rose to 28 million sq ft, an addition of roughly 3.9 mn sq. ft. per year. Post 2006, there has been an addition of approximately 8 mn sq.ft. annually, taking the total mall space pan India to 52 mn sq ft by end 2009. %% As a greater and greater proportion of the jewellery industry moves from the fragmented unorganised sector and comes within the organized segment, one sees jewellery outlets opening up in these malls as well. The growing presence of jewellery in malls and the move into the organised sector is linked to one other strong development of this decade – the entry of a plethora of jewellery brands. First it was De Beers’ DTC which introduced a spate of brands which was part of their strategy to popularise diamond jewellery. They also encouraged their sightholders – clients to whom they supplied rough diamonds and which were large Indian diamond companies -- to move “downstream” and maximize value for their diamonds. The result was that the birth of about 40-50 brands and a vast array of choice for the consumer. And, as the brands came with an unbelievably low tag at the entry level, they not only helped popularise diamond jewellery but also increased the self-purchase segment and lowered its age bracket as well. %% Talking of different segments entering the market, there has been a major shift in the consumer preferences in Tier II & Tier III cities and towns as well, and one sees an increasing market in those places for diamond jewellery as well as modern, lightweight jewellery, where earlier the tendency was only to purchase traditional, heavy gold jewellery, mainly during marriages. %% {{Towards Transparency}}%% Perhaps one of the most crucial areas which has seen a change is in the area of transparency and business ethics and practices. While everyone feels that these issues have come to the forefront and there has been a great change on this front, Minawala has an interesting insight to provide. “One of the most crucial milestones for the jewellery industry in recent times was the abolition of the Gold Control Act in 1990-91,” he says. “The perception was that now there would be a large number of jewellery stores opening up. But that did not happen till the turn of the century, when there was a large influx of jewellery outlets opening and people from different segments, different communities and different business and other backgrounds entered the industry, who had no connection with the jewellery industry earlier.” %% That changed the dynamics of the industry fundamentally. Minawala feels that these people came to the industry with a fresh outlook and brought to the industry new norms, new methods of doing business, new ethics and practices not having learnt the ”tricks of the trade” so to speak, from earlier generations in the business. “These people set new benchmarks: they created jewellery with innovative designs and high quality standards; adopted the latest technology and manufactured machine made instead of just handmade jewellery; assured the consumer of melting quality before hallmarking came up, and generally created a new niche in the market,” elaborates Minawala. “Post 2000, a number of retailers moved to having multiple outlets and saw a number of corporates coming into the business.”

Apart from the “outsiders” there has been a huge move of Indian diamond export businesses entering the domestic market says Kothari. With their experience of international markets, and propensity to do business along internationally accepted standards also made an impact on the Indian retail industry in terms of both product as well as business ethics. %% A younger, more aware consumer who is exposed to information in the rest of the world has also become more demanding. She seeks quality and assurances on purity. This has led to a big boom in the area of diamond certification and hallmarking. International laboratories like GIA, IGI and HRD and several others set up operations in India and they offer their services not merely in metros and big cities, but also smaller cities and towns. Even when hallmarking is not compulsory, you see that all the major jewellers keep hallmarked product in their showrooms. %% With changes taking place on so many fronts there is naturally a difference in which the business is run. “There is certainly more professionalism in the business,” points out Kothari. “The younger generation has played an important role and employed qualified professionals, and found that the business really benefited as a result. There are some who have stuck to the old family business style. They have also grown, but not to that extent.” %% Kapre however feels that though this process has begun, there is still a long way to go, and that professionals are still wary of entering the jewellery business which they see as both lacking transparency and a clear growth path. Hence, he says that this is an area that will be the issue before the industry in the coming decade - getting more professional and the streamlining of systems and processes. This and the financing of the jewellery industry. As the industry has not by and large had transparent systems, availing of institutional finance has been difficult for most players, except those who are corporatised and put the requisite systems in place. %% While this decade has seen a revolutionary change in the India jewellery industry, the coming decade will see another leap taking place. With analysts estimating that only 5-7 of the jewellery industry falls within the organised sector, the next frontier to conquer is for a larger chunk of the business to make the move from the unorganised to the organised sectors. That is what will help the jewellery industry remain relevant, and help stave off the competition from other segments and products more effectively.

|*For centuries, the Indian jewellery industry chugged on along much the same lines, with very little changing from year to year. Sure there was an increase in the size of the market, over the years. Sure, the quantity and value of sales grew. But the industry itself remained fundamentally the same, with very little change – in terms of processes, designs, retail space, professionalism etc. However, with the country itself undergoing a metamorphosis, a transformation began taking place within the industry as well. The first decade of this century and millennium has witnessed the widest, deepest and most far-reaching changes yet, is the unanimous feeling within the industry. Nilan Singh speaks to some industry veterans, representing different segments of the business to outline and analyse the contours of the changes that have taken place in the Indian jewellery industry over this decade.*|%% Think Indian jewellery, think tradition – that was the widespread view for many, many decades, even when India began exporting jewellery to markets all over the world. Initially, it was a well known fact that jewellery exports from this country catered mainly to the Indian – at most, Asian – diaspora all over the world. %% Within India, jewellery is intrinsically woven into the pattern of the social fabric, since time immemorial. It is part of life from birth and through all rites of passage. The significance of gold and jewellery in several religious festivals of this vibrantly multicultural country, further added to its allure. And since centuries, in a country which had little other choices to offer the general populace, gold jewellery was seen as the best investment. India achieved the distinction of being the highest importer of gold, and for several years imported on an average around 800 tonnes, before rising prices, the global financial crisis and the development of more sophisticated trading opportunities in gold investment/trading impacted its off-take to some extent. It still however, remained the country which consumed the highest amount of gold. %% The jewellery industry though widespread – everyone knows just how deep the penetration of retailers is even in rural areas – was rooted in tradition. Gold jewellery remained the mainstay, and manufacturing skills were passed from generation to generation of craftsmen with designs being similarly handed down the family tree. Though highly artistic and skilled in their own way, manufacturing quality left much to be desired, as even quite late in the day – comparatively peaking – technology only of the most rudimentary kind was used. And so it went on. Till a big change came about and India’s jewellery manufacturing industry took the big leap forward. The transformation was not piecemeal, it did not affect just one aspect, but touched upon the many facets that make up the jewellery industry, and has changed the face of this business.

{{From Investment to Fashion }}%% “The past decade has wrought the greatest change in the jewellery industry, as everyone knows” says Ashok Minawala, a seasoned retailer from the Danabhai group, who introduced a new concept with his Pallazzio format, and the past – and first – Chairman of the All India Gem & Jewellery Trade Federation (GJF) which was formed in 2005. %% Prasad Kapre, Managing Director of Blue Skies Business Management Group, Co-Chairman of the FICCI Committee on Gems & Jewellery and past Business Director of De Beers Group Marketing in India, sees the change as being twin pronged. “There has been a transformation on two fronts: at the consumer level, and at the trade level,” he explains. %% Where the consumer is concerned he outlines a shift in the mindset: “Due to several factors like growing affluence; exposure to media; the influx of new brands in the market; marketing efforts by the DTC, which led to several brands like Nakshatra and others all resulted in the consumer thinking very differently. There was a shift from the investment mentality to seeing jewellery as a fashion accessory. Something which had to match the wardrobe, be suitable for different occasions and so on. There was a change in consumer preference and taste.” Needless to say, a change in consumer taste, threw up the demand for a different kind of jewellery. %% “The trade is driven by consumer demand,” Kapre continues to elucidate. “And there is a huge transformation that has taken place in the business - actually across the famous four Ps of marketing. It is evident in the kind of merchandise that retailers are now stocking on shelves; in the store ambience and shopping experience they are providing.” %% {{Diamond Driven}}%% Sanjay Kothari, Vice Chairman of The Gem & Jewellery Export Promotion Council, and who has been Chairman f the body for several terms earlier, and himself a diamond and jewellery exporter, being part of Kunal Diamonds and Diatrends, the jewellery manufacturing company, feels that where the product is concerned, one of the most significant changes that has occurred this decade is the advent of diamond jewellery. “From an affinity to gold, the Indian consumer has become a great consumer of diamond jewellery, and there has been fast-paced growth in the diamond jewellery segment in this decade. India and China are the fastest growing diamond markets in the world and the future of this industry.” In fact, according to research and analysts, the diamond markets of the two Asian giants are poised together equal the size of the US market in a decade or so. %% Kothari also points out that the strong demand within the country helped the diamond industry ride out the recession which had a negative impact on many other diamond manufacturing and exporting centres of the world.

{{Product Upgradation}}%% Touching upon the product development, Haresh Zaveri, Convener of the Exhibitions Sub-Committee of the GJEPC, and of jewellery manufacturer Pra-Mak International, which also retails to a select clientele says, “Innovation in design has come to the forefront.” He adds, “Today consumers demand jewellery for so many different occasions: they want something different for the day, something to wear to the office, something else for evenings and something altogether different for special occasions and marriages and so on. Tastes have also changed. Now it is not just about the typical mangalsutra or pendant. There is a vast variety of designs that manufactures create.” %% Kothari points out that the entry into the market of a younger segment of consumer, and jewellery being perceived as a fashion accessory, and to some extent the high price of gold, has also created a large demand for lightweight jewellery; there is also a change in preference for western style jewellery. Further, he adds that there has been a leap in the manufacturing and resulting quality standards. “There has been a great deal of collaboration with Italy, including on the technological front,” says Kothari. “As a result both designs and quality of finish etc has improved greatly.” %% In fact, the leading jewellery manufactures in India today have not only caught up with the technological levels of western countries but remain at the forefront and at the cutting edge. %% What is more, the fact that the change on the design and quality front is not limited to diamond jewellery, which is, relatively speaking, the newer segment but also in the gold jewellery being manufactured in the country today. From the plain gold chain – a basic in jewellery – to heavier sets, there is a revolution in the jewellery being created. %% {{Core Competency}}%% An important aspect of the change is the specialization which is developing. “One important trend we have seen this decade, is that there is a greater separating out of roles,” elaborates Kothari. “Earlier, the retailer was also a manufacturer and was performing both tasks. Today, more and more retailers have stopped manufacturing and are sourcing from manufacturers who are specialised in that area.” %% This has helped each segment concentrate on its area of activity – both in terms of finance and attention – and that in turn has led to a qualitative change in both areas. And apart from the upgradation that has taken place in the product (discussed above) there has been a sea-change in the stores as well, at least, again, amongst the leading jewelers of India. %% Hence, one sees stores undergoing a makeover. There is an emphasis on getting professional help on all aspects – from designing interiors, to lighting to visual merchandising to staff training. Also, retailers are expanding from single store formats to multi-store formats – which could be within a single city covering different locations or across two or more cities.

{{New Formats, New Segments }}%% The biggest development in modern retail formats has been the rise of malls, earlier an unknown quantity in India, but most popular in developed countries the worldover. According to a report by well-known global property management consultant Knight Frank, released earlier this year, in 1999, India had just three shopping malls covering an area of one million sq ft between them; by the end of 2006, the total mall space rose to 28 million sq ft, an addition of roughly 3.9 mn sq. ft. per year. Post 2006, there has been an addition of approximately 8 mn sq.ft. annually, taking the total mall space pan India to 52 mn sq ft by end 2009. %% As a greater and greater proportion of the jewellery industry moves from the fragmented unorganised sector and comes within the organized segment, one sees jewellery outlets opening up in these malls as well. The growing presence of jewellery in malls and the move into the organised sector is linked to one other strong development of this decade – the entry of a plethora of jewellery brands. First it was De Beers’ DTC which introduced a spate of brands which was part of their strategy to popularise diamond jewellery. They also encouraged their sightholders – clients to whom they supplied rough diamonds and which were large Indian diamond companies -- to move “downstream” and maximize value for their diamonds. The result was that the birth of about 40-50 brands and a vast array of choice for the consumer. And, as the brands came with an unbelievably low tag at the entry level, they not only helped popularise diamond jewellery but also increased the self-purchase segment and lowered its age bracket as well. %% Talking of different segments entering the market, there has been a major shift in the consumer preferences in Tier II & Tier III cities and towns as well, and one sees an increasing market in those places for diamond jewellery as well as modern, lightweight jewellery, where earlier the tendency was only to purchase traditional, heavy gold jewellery, mainly during marriages. %% {{Towards Transparency}}%% Perhaps one of the most crucial areas which has seen a change is in the area of transparency and business ethics and practices. While everyone feels that these issues have come to the forefront and there has been a great change on this front, Minawala has an interesting insight to provide. “One of the most crucial milestones for the jewellery industry in recent times was the abolition of the Gold Control Act in 1990-91,” he says. “The perception was that now there would be a large number of jewellery stores opening up. But that did not happen till the turn of the century, when there was a large influx of jewellery outlets opening and people from different segments, different communities and different business and other backgrounds entered the industry, who had no connection with the jewellery industry earlier.” %% That changed the dynamics of the industry fundamentally. Minawala feels that these people came to the industry with a fresh outlook and brought to the industry new norms, new methods of doing business, new ethics and practices not having learnt the ”tricks of the trade” so to speak, from earlier generations in the business. “These people set new benchmarks: they created jewellery with innovative designs and high quality standards; adopted the latest technology and manufactured machine made instead of just handmade jewellery; assured the consumer of melting quality before hallmarking came up, and generally created a new niche in the market,” elaborates Minawala. “Post 2000, a number of retailers moved to having multiple outlets and saw a number of corporates coming into the business.”

Apart from the “outsiders” there has been a huge move of Indian diamond export businesses entering the domestic market says Kothari. With their experience of international markets, and propensity to do business along internationally accepted standards also made an impact on the Indian retail industry in terms of both product as well as business ethics. %% A younger, more aware consumer who is exposed to information in the rest of the world has also become more demanding. She seeks quality and assurances on purity. This has led to a big boom in the area of diamond certification and hallmarking. International laboratories like GIA, IGI and HRD and several others set up operations in India and they offer their services not merely in metros and big cities, but also smaller cities and towns. Even when hallmarking is not compulsory, you see that all the major jewellers keep hallmarked product in their showrooms. %% With changes taking place on so many fronts there is naturally a difference in which the business is run. “There is certainly more professionalism in the business,” points out Kothari. “The younger generation has played an important role and employed qualified professionals, and found that the business really benefited as a result. There are some who have stuck to the old family business style. They have also grown, but not to that extent.” %% Kapre however feels that though this process has begun, there is still a long way to go, and that professionals are still wary of entering the jewellery business which they see as both lacking transparency and a clear growth path. Hence, he says that this is an area that will be the issue before the industry in the coming decade - getting more professional and the streamlining of systems and processes. This and the financing of the jewellery industry. As the industry has not by and large had transparent systems, availing of institutional finance has been difficult for most players, except those who are corporatised and put the requisite systems in place. %% While this decade has seen a revolutionary change in the India jewellery industry, the coming decade will see another leap taking place. With analysts estimating that only 5-7 of the jewellery industry falls within the organised sector, the next frontier to conquer is for a larger chunk of the business to make the move from the unorganised to the organised sectors. That is what will help the jewellery industry remain relevant, and help stave off the competition from other segments and products more effectively.