|
|
India
By Zainab Morbiwala
The gems and jewelry industry remains bullish for a better year ahead compared to what it witnessed in 2012. With the changing retail dynamics in India, there is a lot of thrust in the market for retailing products across categories, such as apparel, luxury goods, housewares, etc., and this includes jewelry as well. The small, corner jewelry shops in the country could find it hard to survive against such major jewelry players as Titan and Reliance, who are opening chain stores across the country and stocking them with their own brands, Tanishq and Reliance Jewels. The giant of India’s jewelry industry, Gitanjali Group, is spreading its wings too, establishing stores not only in the major Indian cities, but also in the less populated, less developed Tier II and Tier III towns. In an exclusive interview with Rapaport Magazine, Mehul Choksi, chief managing director of Gitanjali Group, predicted that “There will be a spurt in the completion of modern retail projects across the country in 2013. And while the metropolitan areas will continue to see a huge concentration of malls and lifestyle stores, almost one-third of new development will be in the Tier II and Tier III cities. These cities will see the sharpest rise in modern retailing, with even stand-alone stores placing greater emphasis on visual displays, staff training and modern ambience.” “We will also see the entry of modern stores into even smaller towns,” continued Choksi. “These retail outlets will have one unique feature: A lot of the jewelry that retails in the smaller towns and cities will be trendier in design and lighter in weight. That’s because the youth in these smaller towns put more emphasis on craftsmanship and less on the amount of gold being used.” As for jewelry trends to expect in 2013, Choksi said, “Traditional gold ornaments will continue to be the dominant product category, but more aspirational products like diamond jewelry and platinum jewelry will be visible on retail shelves, especially in the metropolitan and larger cities. This reflects the changing nature of the jewelry purchase drivers. From being an investment, a ritual purchase on an auspicious occasion or adornments for special days and special occasions, jewelry in India is now reflecting the fashion and aspirational interests of the buyer also.”
India’s Ministry for Commerce and Industry, under the leadership of Anand Sharma, is taking steps to boost the diamond industry, a move that is being applauded by industry players. A special task force has been formed under the leadership of the Director General of Foreign Trade (DGFT), who will also be the chairman of the group. The tasks before the group include recommending measures to position India as a trading hub of rough diamonds, suggesting actions for changing tax policies so they are more in sync with the international diamond centers, increasing the availability of bank financing to the industry, expanding beneficiation efforts for Indian-mined diamonds and promoting Indian polished diamond brands, along with suggesting measures to increase diamond exports. Sharma said that the Indian government has been holding talks with diamond-producing states around the globe in an effort to secure dependable supplies of raw diamonds. At the same time, after winning the Gujarat elections, Narendra Modi, the recently reelected chief minister, said that it was imperative for the Surat diamond industry to tap the international jewelry market and not limit itself to polishing diamonds.
The demand for VS and SI goods still is the market driver. Talking about current market dynamics, Kalpesh Vaghani, partner in Kapu Gems, said, “Customers from China are gearing up for the Chinese New Year and we had good sales in January. Prices of rough have to come to realistic levels to boost the sales of polished diamonds. We feel that currently in the market the ratio of polished stock is equal to the actual demand, which is a good sign because there are fewer signs of hoarding goods and manufacturers are practicing lean inventory. There is a scarcity of nice goods and customers are ready to pay nice prices for better stones.”
In an effort to repair some of the public relations damage from a recent dispute between ABN AMRO and Arjav Diamonds, many Indian banks have held meetings and reached out to industry members. The dispute centered on the bank’s efforts to seal the company’s safe after failed negotiations regarding the company’s debt to the bank. Vijaylakshmi Iyer, chairperson and managing director of the Bank of India (BoI), recently met with members of the diamond industry to discuss various banking policies that could benefit the industry. It is reported that more than 150 diamond firms from Surat and Mumbai participated in the meeting. Incidentally, BoI was the first bank to enter the diamond industry more than 50 years ago.Article from the Rapaport Magazine - February 2013. To subscribe click here.
|
|
|
|