The industry is watching the first major jewelry trade show
of 2012, held in Mumbai January 6 through 9, for signs of a turnaround in
dealer sales and buyer confidence and for indications of what can be expected
in the rest of the new year. The IIJS Signature Show was organized by India’s
Gem and Jewellery Export Promotion Council (GJEPC). “IIJS Signature has grown
quite a bit in these past two years,” said Rajiv Jain, chairman of GJEPC. “Since
this show is a curtain-raiser for 2012, there are great expectations. Even
though we might not see big participation from Europe and America, the domestic
market looks strong
Allowing Foreign Investment
At the close of 2011, there were many heated arguments in
the Indian Parliament over the issue of allowing Foreign Direct Investment
(FDI) in Indian retail. While the national government favors FDI in retail,
there is considerable opposition to the idea in the country, especially among
certain conservative groups. In the end, the government decided to allow
foreign investment of 51 percent in multibrands and 100 percent in single
brands, according to Business Standard, the country’s daily financial
newspaper.
By allowing new sources of overseas financing in its
domestic retail industry, including investment by global chains, the decision
is expected to have a huge impact in speeding retail development and growth in
the country, especially in smaller cities and towns. The new FDI rules also
will allow global players to enter Indian markets by setting up manufacturing
units in India, as well as enable overseas majors to acquire regional brands
and promote them on the national level to offer services to local players.
Mehul Choksi, chief managing director of Gitanjali Gems,
already the dominant player in the domestic retail gems and jewelry industry in
India, said that “Opening up FDI in retail will accelerate the growth of
branded and organized players like us. We can have strategic partners and
inflow of funds to improve the ‘retailonomics’ of the country.”
GJEPC Initiatives
The GJEPC has signed an exclusive Memorandum of
Understanding (MOU) with India’s Ministry of Tourism to promote the gems and
jewelry trade as part of the ministry’s “Incredible India” campaign. During an
exclusive event in Delhi in mid-December, India’s most prominent jewelry
retailers showcased their designs over dinner for approximately 200 ambassadors
and diplomats from Austria, Botswana, Brazil, China, Chile, Iraq, Japan, Switzerland,
the United Kingdom, the U.S. and Zimbabwe.
According to a press statement, the relationship between the
two groups will benefit Indian jewelry trade because it will present Indian
retailers with the opportunity to target untapped markets in the various countries
and increase the amount of jewelry being exported. At the same time, the
tourism industry gets to present a new side of India’s heritage as exemplified
in its jewelry.
Since their separation in 1947, India and Pakistan have been
at loggerheads on a number of issues. But one area that has been a bond between
the two countries has been music and films. In recognition of that common
interest, the GJEPC sponsored a December 20, 2011, visit by a delegation of
faculty members and students from the Pakistan Institute of Fashion and Design
in Lahore to the Indian Institute of Gems and Jewellery in Delhi to learn more
about gem and jewelry manufacturing. Following the visit, the delegation
visited the Jaipur Jewelry Show. Jain said the council was “very happy to
engage ourselves in this kind of activity. A student exchange program always
helps in the exchange of talent and ideas.”
Year-end Show Debut
The first edition of the Mumbai Jewellery & Gem Fair,
held December 9 to 11 in Mumbai and organized by UBM India Pvt. Ltd., saw close
to 300 exhibitors from across the country, including jewelry retailers from
remote Indian towns and cities, along with 4,800 visitors. The event was
supported by the All India Gems and Jewellery Trade Federation (GJF), the
Gemological Institute of America (GIA) and the Mumbai Wholesale Gold Jewelers
Association.
Shamal Pote, director of jewellery for UBM, said that “With
Mumbai being the hub of gems and jewelry, there is tremendous opportunity and
capacity to hold more shows to satisfy the growing needs from the traders,
buyers and manufacturers. It was the industry itself that suggested a Mumbai
show in December. The timing is appropriate because the weather is good and it
is an ideal period to stock up for the next year’s buying cycle. With market
conditions unstable, it has become very important for the business community to
cash in on every available opportunity to make their companies prosper.”
The Marketplace
- The volatile exchange rate has had a negative impact on
the domestic market.
- Overseas demand failed to meet expectations for the
Western holiday season. Sellers are looking forward to better sales for the
Chinese New Year.
- The overall market is cautious with the arrival of
Zimbabwe goods in the marketplace, especially since Rapaport is reminding
sellers not to list Marange diamonds on RapNet.
- Retail demand continues to remain weak despite this being
the wedding season in India.
Article from the Rapaport Magazine - January 2012. To subscribe click here.