New Delhi: According to a report by the World Gold Council, the market share of chain stores in the Indian jewelry retail market is expected to reach 40% in the next five years. In 2021, jewelry chains accounted for 35% of India’s retail jewelry market.
The top five retailers alone are expected to open between 800 and 1,000 stores over the next five years.
The World Gold Council (WGC) has released a report titled “Jewellery Market Structure” which highlights a noticeable shift in the Indian gold jewelery market over the past few years.
The fragmented nature of the industry makes it almost impossible to accurately quantify the number of jewelers in India. Estimates from various trade bodies vary widely, ranging from 5,00,000 to 6,00,000, according to the report.
“Demand for better designs and better customer experience, growing awareness of hallmarking, better pricing structures and competitive return policies, and the introduction of GST and demonetization, have all accelerated the move to chain stores,” WGC said.
While small independent retailers still dominate the landscape, the market share of chain stores (national and regional) has grown steadily over the past decade, he added.
Changes at the manufacturing level have been relatively slower, but as the market continues to grow, organized retail and manufacturing operations are well positioned to see increased market share.
On the report, Somasundaram PR, Regional CEO, India, World Gold Council, said, “The Indian jewelery retail market has undergone several structural changes over the past decade, some driven by regulation and others by a change in consumer behavior.
While mandatory hallmarking should provide a level playing field, he said, national and regional chain stores are nonetheless set to gain market share in the current trend due to their access to credit and the extensive inventory they offer.
“Smaller players need to become more transparent and adopt technology faster if they are to gain similar access to credit and protect their market share,” Somasundaram PR said.
According to the report, chain stores have grown over the past 10 to 15 years, gaining 35% market share in 2021.
“Chains, with nationwide operations, focus on everyday wear and fast-moving jewelry (such as chains and rings) and these items account for 50-60% of their business. The report estimates that at Over the next five years, the chain stores will continue to expand and their market share will exceed 40%,” the report said.
While online jewelry purchases have increased, the average note size has remained between 5 and 10 grams. Online shoppers tend to buy lightweight 18k gold fashion jewelry.
Looking ahead, the report predicts that the online jewelry market share over the next five years could reach 7-10%.