The retail jewellery market has undergone notable changes over the last decade, driven by evolving consumer preferences and government regulation that has encouraged the industry to become more organised. That said, a large part of the industry remains fragmented and dominated by independent retailers.
There is no single industry definition to distinguish between unorganised and organised retailers. For the purpose of this analysis, Metals Focus has considered jewellers who sell gold via invoice, have proper banking channels and enterprise resource planning (ERP) systems in place, and are registered under the Bureau of Indian Standards (BIS) as organised jewellers.
Over the last few years demonetisation and the introduction of the Goods and Services Tax (GST) have helped the industry to become more organised and therefore more transparent. In response to these regulatory changes, many jewellers have adopted proper accounting software and now record sale proceeds via an official bill and maintain books of accounts.
It is worth highlighting that the majority of jewellers in large cities and towns fall into the organised category. However, the unorganised sector remains a dominant force in rural centres, where many jewellers also act as money lenders within their community. Changing consumer preferences have also aided industry organisation.
Consumers desire a better shopping experience, transparent pricing and buyback policies, and they want to purchase via bills and online transactions. It is thus not surprising that chain stores are gaining market share. In addition, a lot of what were regional players – such as Joyalukkas, Senco Gold and Diamonds, among others – have expanded to become national chains.
