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The World Gold Council has released a rigorous assessment of India’s gold industry and outlined a forecast of tremendous growth if current trends of improved organisation are maintained.
The report is titled ‘Jewellery market structure: India gold market series’ and explores a sector which today contributes 1.3 per cent to the Indian GDP.
Per the report, the retail jewellery market in India has undergone a big shift in the past decade as a result of changes in consumer behaviour and government regulations.
These changes have led to a more thoroughly organised gold sector and following that the rise of chain stores, increasing to a 35 per cent share of the market by the end of 2021. This is a significant change for a market that has traditionally been dominated by smaller to medium sized independent jewellers.
The competition stoked by this expansion has encouraged innovation as jewellers are focusing on product offerings that provide value and diversity to India’s wide cultural and demographic customer base.
World Gold Council CEO for India Somasundaram PR said independent jewellers will need to adapt to evolving technological requirements in the future in order to survive.
“While mandatory hallmarking, implemented in its final shape as defined, should provide a level playing field, national and regional chain stores are nevertheless set to gain market share in the current trend because of their access to credit and the large inventory they carry,” he said.
“Small players need to become more transparent and adapt technology faster if they have to gain similar access to credit and protect market share.”
The biggest change to the retail landscape has been the reduction in standalone jewellers, dropping from 50 per cent of the market share to 37 per cent.
The report estimates that over the next five years, chain stores, most of which rapidly expanding, will continue to grab market share and could soon hold 40 per cent of the market. The top five stores alone will likely open around 1,000 new stores during this time.
The report also highlights greater tax compliance from businesses in line with the improved organisation and sophistication of the market.
“The manufacturing sector is only at the beginning of its much-needed transformational journey,” said Somasundram PR.
“Jewellery parks, some of which have already been established, will help address concerns about ethical standards and working conditions. The same can help eliminate barriers impeding the growth of manufacturing industry, further supporting demand positively.
“Bottom line is the sector has grown but the wave of change facing the industry due to tech adoption and broader tax compliance in the economy can be a boon for those who are willing to transform and a significant risk for others whose business models continue to rest on legacy practices.”
Based in London and formed in 1987, the World Gold Council is a market development organisation for the international gold industry. The WGC works across all parts of the industry with a focus on stimulating and sustaining demand for gold.
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