Post on 18-Jul-2016
description
Industrial Projecton
Gems & Jewellery
By,Ramya| Vivek| Hari| Prapti
2500-1800 AD Indus Valley Jewellery
5th-12th CenturyJewellery on Medieval
Ages
13th -17th Jewellery
Renaissance Jewellery
18th- 19th CenturyVictorian Jewellery
Evolution
19th- 20th Century
Art Nouveau
1920s -1930s Art Deco Jewellery
1900 -PresentEthnic Tribal
Jewellery
1970s to Present Contemporary
Jewellery
Evolution
About Industry
USD 40 Billion
Estimated Gems & Jewellery market 2012-13
80%Demand from
domestic jewellery consumption
12.65%Increase in the import of Rough Diamond
Organized Retail Market SplitFood and Grocery
2%
Apparel33%
Mobile and Telecom
11%Food Service7%
Jewellery6%
Consumer Electronics
8%
Footwear4%
others24%
Home and Interior5%
Source:
About Indian Jewellery Market• Indian gems & jewellery market is highly fragmented across the value
chain with 96% of players operating in the unorganized sector
• The Domestic gems and jewellery industry had a market size of Rs 251,000 crore (US$ 41.61 billion) in 2013.*
• FY 2013–14 saw an increase of 12.65% in export of cut and polished diamonds with the segment reaching US$ 19,635 million.
• An increase of 11.98% in imports of rough diamonds with figures of US$ 16,716 million
About Indian Jewellery MarketOrganized
4%
Unorganized96%
jewellery market segregation
MSME’s are forming major constituents of the unorganized Gems and Jewellery market of India.
Tata with its Tanishq brand and Gitanjali, a pioneer in the branded jewellery segment have, however, been growing steadily carving a 4-5 per cent market share.
Organized retailers are expanding their reach and adopting product portfolio in order to suit local needs
India’s Position in Global Level• India and China are also
the two largest gold consumers in the world followed by the Middle Eastern region.
• The Gems and Jewellery industry of India contributes nearly 55% of the world’s net exports of cut and polished diamonds in value
Significance of Indian Jewellery
Tradition• Indian jewellery and Indian
women are the terms always linked inherently.
• During wedding as well as numerous other occasions, a woman is gifted jewellery by her parents and relatives
As Security• Security in times of
contingency
• Jewellery also serves the purpose of insurance, which can be depended upon.
Celebration• Jewellery are gifted in
different phases of life such as, at birth, during attaining puberty, in marriage, on becoming a mother
• Certain ornaments, such as mangalsutra, nath (nose ring) and toe rings quintessential for married Indian women
Types of JewelleryJe
wel
lery
Mangtika
Necklace
Ear Rings
Nose Rings
Bangles
Arm Band
Rings
Waist Band
Anklet & Toe Rings
Jewel’s Classification
Gems and Jewellery
Gem Stones
Pearl
Emerald
Topaz
Blue Saphirre
Coral
Ruby
Diamond
Cat's Eye
Yellow Sapphire
Jewellery and Precious Metals
GoldPlatinumSilver
About Gold
• Gold has formed the backbone of global economic activities as a reserve currency over the last several centuries.
• Currently a little over 2,600 tons of gold is mined per annum
• Gold can be alloyed with different metals to give different colours, such as white, yellow, pink, black, purple and green
• South Africa is the largest producer of gold in the world
Consumption Pattern
Region Preference
Business Model of Jewellers
Busin
ess M
odel Hedging against future
Price-rise of Gold
Charging Pure Gold price for low purity Gold
Making Charges of Jewellery
Re Purchase of Old Jewellery
Major Players
About PlayersSo
me
List
ed P
laye
rsTANISHQ
GITANJALI
TBZ
RAJESH EXPORTS
Tanishq is India's largest, most desirable and fastest growing
jewelry brand in India
With retail sales of 1200 crore last year and gunning for 2000 cores
this year
Factory located at Hosur, Tamil Nadu, the 1, 35,000 sq. ft. factory
is equipped with the latest and most modern machinery
Busin
ess M
odel Consumer –
Oriented
Online ordering of gold
Investment in IT
Global branding strategy
World’s largest integrated branded jewellery manufacturer-retailer with an annual turnover of over
$3billion
today owns and distributes eight out of the top ten jewellery brands
in the country including Gili, Nakshatra, Asmi, D’Damas, Sangini,
Diya and Maya Gold
Gitanjali’s extensive network of own stores, shop-in-shops and
franchise outlets span across 300 cities and 4,000 points of sale
Busin
ess M
odel
Serving the vast Indian market for branded jewellery through rapid penetration via a rapidly
growing franchise route.
Further strengthening the diamond jewellery portfolio and extending the brands to include other
lifestyle categories.
Diversifying the range of offerings so as to attract a wider range of consumers.
Positioning as an established player in mature and high margin markets such as Japan and the USA.
Developing channels such as e-commerce to establish strong, sustainable connect with customers
looking for novelty and convenience in jewellery purchases.
It has 3 world-class diamond polishing facilities
in India located at Surat, Mumbai and Hyderabad possessing production
capacity of 4, 00,000 stones a month
Domestic jewellery manufacturing facilities are
located at Mumbai, Hyderabad, Coimbatore, Kolkata, Surat and Jaipur
that produce 2,35,000 pieces of finished jewellery
each month
International manufacturing unit is in China. The
Group’s international design hub is located in Italy.
Distribution via superstores, department stores and
other retail outlets at MRP, supported by international
certifications of scientifically tested purity
and authenticity
Markets branded jewellery directly by mail order
catalogue
Operation
TBZ is a popular jewellery retail chain that has rapidly expanded its presence across
India in the past few years.
TBZ successfully transformed into the modern and innovative jewellery maker it
is today
It has its presence in almost 21 cities in India. The first to promote the concept of light weight jewelry and the first to offer
certified solitaire diamonds
Busin
ess M
odel
Continue to expand to Large Format Stores and Wedding Centers.
Increase their percentage contribution of diamond and
platinum jewellery business to their total revenues.
Continue to invest in their marketing initiatives and brand
building exercise.
14 showrooms in 10 cities across five states, which have
a total carpet area of approximately 48,818 sq.ft
Out of its 14 showrooms, 11 are “large format” high street
showrooms (carpet area of 3,000 sq. ft. or more) and
three are “small format” high street showrooms (carpet area of 1,000-3,000 sq. ft.)
It plans to open an additional 43 showrooms (25 large
format high street showrooms and 18 small
format high street showrooms) by the end of
Fiscal 2015
The company offers jewellery across different price points
so as to maximise its potential customer base
Company believes that its more than 145-year old track-
record signifies consumers’ trust in the quality and purity
of its products
Operation
Rajesh Exports Limited (REL) headquartered in Bangalore, India
manufactures gold & diamond jewellery.
REL exports its products worldwide and distributes them within India to the
wholesale jewellery market.
REL also retails its products through its own network of retail jewellery
showrooms Shubh Jewellers spread across India
Busin
ess M
odel
In-house R&D team
Customized options to customers – Orders accepted either for new designs or changes in existing designs
SHUBH Service Centers – Offer exclusive services to consumers. For the first time in the world - free repair, free 26 consumers. For the first time in the world - free
repair, free testing and buying of old jewellery.
SHUBH Infra to monetize land bank
Refining• REL procures Dore Bars
(raw gold) from various sources across the world
• The raw gold is refined and converted into fine gold bars at Rudrapur, Uttarakhand.
• REL has Four Hundred tonne capacity to refine and alloy gold.
Manufacturing• REL has set up a state-of-
the-art jewellery manufacturing unit at Whitefield, Bangalore
• The peak out-put capacity of the factory is to produce Two hundred and fifty tones of world class jewellery per annum
• Raw and impure gold is refined into fine gold by parting method
Marketing• REL has established
reliable international marketing network which has a reach in North America, Europe, Asia & Australia
• REL has a clientele of more than Five thousand jewellery showrooms in India.
Retail• REL has setup 82 retail
jewellery stores across Karnataka at prominent locations.
• REL is also in the process of setting up five hundred retail jewellery stores across the five southern states of India under the brand name SHUBH JEWELLERS.
Comparative Study
Tanishq Gitanjali TBZ Rajesh Exports
Stores 163 stores 28 stores 85 stores
Revenue Rs. 10916 crore Rs. 10,380.67 crore Rs.1658.30 crore Rs.31074.43
Business Strategy
22Ct and 18Ct light weight jewellery
Main revenue from Diamonds
Hub and Spoke model and caters
majority to the wedding
collections
Mainly export oriented income
EBITDA Margin 4.71% 8.87% 2.04%
Investment Turnover
Ratio2.83 6.97 1.61 40.44
Exports and ImportsYear Export of Gems &
Jewellery (USD Billion)
%Share of Gems and Jewellery in India’s total Export
Gold(USD Billion)
Diamond(USD Billion)
2008-09 24.49 15.36 8.61 14.802009-10 28.41 16.34 9.42 17.542010-11 42.99 17.40 12.88 28.252011-12 42.83 15.45 16.78 23.312012-13 39.03 14.57 18.28 17.41
Year Import of Raw materials for Gems & Jewellery (USD Billion)
Gold Bar (USD Billion)
Diamond
(USD Billion)Rough Diamonds Cut& Polished
2008-09 19.54 4.06 7.53 6.972009-10 28.53 7.17 9.05 11.612010-11 41.93 8.28 11.93 20.772011-12 42.26 10.51 15.15 14.472012-13 36.90 10.73 14.89 5.58
Strength1. Large integrated diamond and jewellery players and having an international presence.2. Strong marketing and distribution network.3.About one million craftsmen are associated with this industry. Their skills can be utilized for designing and making modern Jewellery 4.Supportive government industrial/ EXIM policy.
Weakness1. Small firms lacking technological/ export information expertise.2. As major raw material requirements need to be imported, companies normally stock huge quantities of inventory resulting in high inventory carrying cost.
Opportunities 1. New markets in Europe and Latin America.2. Growing demand in South Asia and Far East countries.3. Expansion possibilities in lifestyle and luxury product like watches and leather goods. Platinum jewellery because increasing disposable income of people.
Threats1. Unusual increase in the prices of gold and rough diamonds 2. Infrastructure bottlenecks, absence of latest technology.
SWOT ANALYSIS
Change in TrendsTraditional Practice Emerging Trend
Gold jewellery consumption emanates from traditional and investment-related demand.
It is regarded as a fashion accessory by the growing young population.
Demand peaks during weddings and festival seasons.They still remain the main demand drivers but its use for regular wearing and gifting has evened out the demand
throughout the year.
Consumption of pure gold – s preferred 22-carat. Traditional & ethnic designs preferred.
Lower caratage & light-weight jewellery preferred. Trend is more towards fashionable and contemporary designs
Purchase from neighbourhood jewellers dominated. Hence the industry lacked transparency
Growing preference for brands, retail stores & e-retailing. Introduction of hallmarking & certifications.
Pre-dominance of gold (yellow)-based jewellery. Acceptance of white gold, platinum and diamond-studded jewellery. Even imitation jewellery is gaining acceptance.
Jewellery largely sold on prevailing gold price, per gram, plus labour charges. Branded players sell on a fixed-price basis
Government Policies
The number of days for re-import of unsold items in the case of participation in an exhibition in the US has been increased to 90 days
Duty free re-import entitlement for rejected jewellery shall be 2 per cent of free on board (FOB) value of exports.
The Government of India has allowed 100 per cent foreign direct investment (FDI) in gems and jewellery industry through the automatic route
In order to encourage more investments in the sector, gems and jewellery SEZs have been set up of four are operational in Maharashtra, West Bengal, Rajasthan and Andhra Pradesh.
Formal approval has been given to 13 SEZs in the sector — three have got in-principal approval and seven have been notified, as per the SEZ Board of Approval statistics