Bollywood Singer Yashraaj Kapill enchanted with exclusive Men's Collection at Popley Group

The men's collection at Popley also includes, diamond studded buttons, tie-pins, cufflinks, under varied categories for Formal, Casual and Club wear.

Post By : IJ News Service On 03 July 2015 12:21 PM
Looking back, one can almost pinpoint when the dark shadow of recession began creeping in on India. %% The year 2011 began brightly enough. The country had come through almost unscathed from the recession that struck the world in September 2008. Save for a few blips immediately post the onset of the crisis – and that mainly as a result of sentiment and confidence issues – the country seemed stable enough, and way ahead of the western world in real growth terms. Its GDP was fairly strong, its HNI population was expanding and increasing its wealth, the internal market was booming and industrial output was strong. %% For the gems and jewellery industry too, 2009 and 2010 were good years, as a result. Gold, diamond and platinum jewellery were growing at a good pace. Consumer sentiment was high, and the prices of gold and diamonds began climbing up even more on the back of strengthened demand. %% As business in the industry trade fairs held in the earlier part of the year continued to boom and resound with the delight of manufacturers, the industry was lulled into confidence. Then, the US debt crisis and the downgrading of the country by Standard and Poor’s, and the Eurozone crisis struck. The realisation that the US was still not out of the dumps and wouldn’t be for some time; and the fear that other European countries would go over the brink, caused widespread concern. The Indian stock market tumbled and business sentiment plummeted along with it, even as gold continued on its upward climb reaching an all-time high. All this came slam-bang in the middle of the country’s largest trade fair held in August, the IIJS 2011 – a show keenly awaited by the industry as the best place to do business. %% That was when the shadow struck. And things have never been quite the same as when the year began. By the end of the year, the shadow had lengthened and deepened. %% {{The Economic Backdrop}} %% Analysts say that 2011 has been one of the worst years for Mumbai’s Dalal Street, the hub of the equity market. The BSE sensex closed the year at 15455, down nearly 25 (24.6 to be exact) per cent from the 2010 close of 20500. The more broad-based NSE Nifty index also fell by 24.61 per cent in the same period.%% In the latter part of the year, as the FIIs began pulling out of the Indian equity market, it continued to impact the market, in turn affecting investor sentiment, leading to further falls. %% On the other hand, many of these foreign funds opted to buy dollar denominated assets, pushing up the value of the dollar, which strengthened against most currencies, thus leading to a greatly weakened rupee. Indian currency saw a fall of 19 per cent against the dollar in 2011.%% Inflation too had been running high for some time causing great concern to the government. In an effort to curb the high inflation, the RBI continued to hike key policy rates through the year, which reached 8.50 per cent in December 2011, as compared to 6.25 per cent in the same month last year. This meant that credit became more expensive and the situation was compounded for those who held dollar loans. %% All this taken together with high raw material costs, meant that India Inc faced tough times. Capital expenditure plans were deferred or shelved. %% Not surprisingly, the ground reality was reflected in the growth figures for India, even for the period prior to when the problems became manifest and became widely discussed. For the first half of 2011-12, GDP growth fell to 7.3 per cent against the 8.6 per cent registered in the corresponding period last year, slumping further to 6.9 per cent for the June-September period. %%
Looking at the situation, Finance Minister Pranab Mukherjee lowered growth projection to 7.5 per cent for the current financial year, as against the 9 per cent budgetary target (last fiscal saw a GDP growth of 8.5 per cent). However, experts feel that the actual growth finally achieved could be even lower, at around 7 per cent. %% While this performance might not seem too bad viewed against the performance of most other countries – certainly the Eurozone ones and the US – this, taken with the overall situation points to a change from a few years or even a year back when India was seen as a strong economic powerhouse with all its engines roaring. Though not entirely a lost cause, what is causing concern is the prospect that the recessionary shadow may actually hang over the country for some time to come and that things may even get worse before they get better. %% {{The Jewellery Market}} %% Changing focus from the macro to the micro and zooming in to things closer at hand to the jewellery industry, one finds that the global and local conditions have had a huge impact on gold – prices and consumption patterns. Investors everywhere have chosen, in recent times, to turn to gold, which is generally seen as a safe haven and the ideal hedge against inflation and weak economic conditions. As a result, the price of gold has seen an increase of over 31 per cent in 2011, rising from the Rs. 20,500 per 10 gramme mark at the beginning of the year to close the year at Rs. 27,000 per 10 gramme, but on the way crossing the Rs. 28,000 per 10 gramme mark in August and briefly touching the Rs. 29,000 per 10 gramme mark in early December. %% Added to this was the high volatility of gold prices throughout the period with rates changing even on the same day.%% Diamond prices were also on the upswing post the recession and reached a record high in the earlier part of this year, on the back of good demand in the consumer markets. Coloured gemstones too saw prices firming up. %% The overall result, of course, was that jewellery prices climbed upwards.%% However, in the face of strong demand till the first quarter of this year at the B2B level, the diamond and gemstone manufacturers were quite buoyed up. Though the retail trade saw that some price resistance was setting in on the part of the consumers, they were, nonetheless, generally quite sanguine in the belief that it would not necessarily impact sales to any great degree, and were busy fashioning their product to adapt to market reality. %% By August, the buzz was that the market was slowing. There were reports of many jewellers “just sitting around” with little store traffic. The August crisis only made things worse, and for the first time, buyers at the B2B level seemed to be restrained. They were hesitant to purchase goods, except what was absolutely necessary, unsure whether their customers would take the prices in their stride. They were also waiting to see if prices would fall.%% In its report on the third quarter of 2011, the World Gold Council noted: “Jewellery demand in India was sluggish during the seasonally slow months of July and August, compounded by high inflation and greater volatility in the local gold price. Buying has since recovered slightly with the onset of the festive and wedding season. Overall, Indian jewellery demand in Q3 saw a 26% decline in tonnage, when compared to the same quarter in 2010, to 125.3 tonnes, however yearly demand to the end of September is very close to the record levels seen in 2010.”%%
Significantly, the report also noted that global investment demand at 468.1 tonnes in the same quarter, rose by 33 per cent compared to the same period last year and in value terms was worth almost US $ 25.6 bn, almost double compared to the value in Q3 2010. However, global demand for jewellery at 465.6 tonnes in Q3 2011 was lower by 10 per cent from levels in the same period last year, while in value terms this figure amounted to US$ 25.4 billion, 24 per cent higher than last year’s third quarter.$$ The global trend was reflected in India as well.%% {{Industryspeak}} %% The Indian season of 2011, comprising both wedding and festival and commencing around September, which though better than the earlier months was not nearly as good for jewellers as it usually is. %% While countrywide figures are difficult to come by, the Chairman of the All-India Gems & Jewellery Trade Federation, Bachhraj Bamalwa said, “Overall in India, jewellery sales have fallen by about 30 per cent in volume terms, during this year’s season.” %% However, reports suggest that there was an increase in the sale of bars and coins. This might make up for the volumes of gold imported, but is not seen as a healthy sign by the industry. %% “If demand for fabricated jewellery falls, it affects the entire industry negatively,” said Sanjay Kothari, Vice Chairman of The Gem & Jewellery Export Promotion Council. “The last few months have been quite bad.” %% However, Kothari admits that the situation is better for organised players, which seems to be borne out by others as well.%% “Our experience has not been very bad,” says Ishu Datwani, Anmol Jewellers, Mumbai, describing the experience of the brand for this season. “The only thing is that buying is not taking place on a consistent basis,” he said. “Like right now, there are large crowds in the showroom. Two hours later it might be empty.” %% “How you perform has a lot to do with a jeweller’s individual marketing efforts and effective wooing of clients,” opines Datwani. “The measures we have taken seem to have paid off.” These include an entire gamut - from personalised contact with clients when new collections are launched, to advertising in mainstream media. %%
More importantly, Datwani spells out his approach. “A few months everyone was talking about the business being down, and the media was full of the depressing news on the international and national front. And when you are surrounded by soothsayers of doom and gloom on all sides, it really pulls you down,” he recounts. “I found all of this taking a toll on my thought processes. Around then, I read somewhere that only about one per cent of people were exposed to the stock markets. And I told myself, I will concentrate on the other 99 per cent. I told myself business is going to be good, and began taking a positive approach, and proactively taking steps to see that we reached out to our customers. That really worked.”%% The other aspect that Datwani stresses is a unique product. “Designing is very important,” he says. “Especially in more difficult times, consumers will buy jewellery from places that have fabulous designs.”%% Saurabh Gadgil of Pune-based P.N. Gadgil, is gung-ho from a different angle. “The situation in the market reflects more the fear factor than an actual drop in sales,” he feels. “The GDP growth is slowing, stock markets are down, the rupee is weaker – India is facing problems from all sides; so sentiment is, naturally, not good.”%% However, Gadgil does admit that “jewellery sales have not grown as they should”. “The value has gone up but the quantity has dropped,” he confirms. “But there is no need to panic. In a recession, while some people lose money, there will also always be those who make windfall profits.”%% He also points out the silver lining – gold has emerged as a favoured instrument of investment, in these uncertain times.%% Marketing is also important in Gadgil’s lexicon. “People do have the money to spend and jewellers need to be visible, hence marketing is needed.”%% T. Nandakumar, Chief Financial Officer of Joyalukkas, points out that the high gold prices combined with extreme volatility has led to “uncertainty in the minds of investors” in terms of to buy or not to buy, or to wait for prices to settle down. “Most people are only making purchases if there is an unavoidable reason, like a wedding in the family,” he says.%% “Whereas earlier those who bought jewellery, especially for weddings would plan in terms of a certain quantity of gold – so many grammes or tolas of gold to be purchased - now they are budgeting in terms of rupees,” he says. “Volume sales have gone down while value may have increased.”%% Nandakumar says that while the Joyalukkas group’s overall sales have gone up marginally during the season, this is more due to an expansion in the outlet network, than real growth.%% Touching on the importance of marketing, Nanadakumar feels that the mindset of consumers in metros is different from that in Tier II and Tier III cities and towns. “In metros, there is greater demand for value-added jewellery and hence marketing and branding is more important in that segment,” he says. “However, the bulk of the jewellery market is accounted for by sales in Tier II and Tier III cities and towns. There, people are more price conscious, which is the most important factor. In these areas, marketing does not greatly impact buying – but yes, consumers need to be aware of your existence so that they come to you and to that extent you need to have a marketing programme in place.”%%
The experience of Reliance Jewels is slightly different. “Our experience may not be representative of the industry,” cautions Ashok Kaul, Business Head & Vice President – Reliance Jewels. “We are a fairly young brand in the business and we are evolving, expanding by opening new stores, and hence have been seeing good growth.” %% However, Kaul confirms the general trend in the industry. “From all reports, it does appear that the jewellery market is a bit slow,” he says. “For example, our vendor partners who are also supplying to other retailers tell us that post-Diwali, there has been a lag in orders. Earlier, if there were orders on account of replacement or replenishment by 10-12 days after Diwali, this time there has been a time lag, and these have come in only after two or even three weeks. This shows that Diwali sales have been slow.”%% Kaul reiterates the opinion expressed by other jewellers – economic slowdon is affecting consumer sentiment, price volatility is affecting decision to purchase. %% “There are real challenges that the industry has to face and address,” he says. But he is confident of the long term prospects of the sector. “Bulk of the jewellery market in India – about 60-65 per cent of the value purchase – is accounted for by the wedding market. And there is no threat to that.” Then there is the investment demand in terms of bars and bullion and that too will remain strong he feels. %% Kaul raises an important issue when he says, “The largest retail chain in India does not have more than a 3-4 per cent share of the jewellery market. That means that the jewllery industry is a very fragmented one and individual players could be affected negatively. In the current scenario, it is likely that some consolidation might take place. The structure of the market could change.” %% {{The Need for Marketing }} %% It is precisely impact of the current situation on the average jeweller that the industry bodies are concerned about.%% “Large, organised players may be able to sustain in bad times through their own marketing efforts, but medium and small players find it difficult,” stresses Bamalwa. “Hence, it is important that there should be an industrywide effort and a general programme to promote jewellery. At an individual level you cannot create the kind of hype and buzz that is needed to meet the challenges of the situation.”%% Kothari, a long time advocate of industry-wide promotion and the person behind the all-India Anant promotional campaign undertaken a couple of years back in India, says “Collective effort for jewellery as a category, targeted to consumers, is extremely important. Individual marketeing is not enough.” %% Kothari points out that for over four decades, the global industry benefited from the generic promotions of diamond jewellery that De Beers was undertaking. But they have withdrawn from this and there is no concerted effort for the jewellery sector. It was De Beers’ efforts and the Nakshatra campaign which is famously known to have opened the diamond jewellery market in India. %% “There are too many programmes at the B2B level,” Kothari stresses. “In a time of crisis especially, it is necessary to go to the consumer. We have started discussions on this and hopefully we will bring on one platform various bodies like Rio Tinto, PGI, Forevermark and together with the industry launch some initiatives.”%% Bamalwa goes even further – “There are too many B2B shows taking place, they should be curbed,” he says. He also informs us that the GJF is discussing ways and means of initiating some programmes like its hugely popular Lucky Lakshmi. “A national programme has severe logistical problems,” he says. “So we are now planning for promotions at a regional level. We will soon be announcing plans for these.”%%
While there is a large segment of industry members who agree with them, not everyone in the industry has bought into the agreement of collective marketing.%% Gadgil for one feels that marketing is not going to be the key differentiator. “When times are tough, there is little you can do about it,” he says philosophically. “You have to ride it out.” The way to handle bad times, Gadgil feels, is to be innovative about the product. “Good designs and lightweight collections are the need of the day to beat recessionary times,” he says. “Concentrating on the top and bottom ends of the pyramid should be the mantra for 2012.”%% Nanadakumar, too, feels that putting in more money into marketing will not help. Kaul brings out another facet saying, “It is only when the market is more organised, when the top three or four players have a 40-50 per cent share of the entire market that collaborative efforts will help. In this fragmented state, it will not even be possible.” %% However, interestingly, all of them do believe that marketing is necessary and important at all times, albeit at an individual level. In fact, Kaul even points out to how market dynamics – competition and more organised players coming on the scene – have pushed even the oldest names in the jewellery business to turn to marketing. “Even those jewellers who earlier thought that it was below their dignity to do any marketing as they were at a special level having loyal customers over generation, have today started advertising and undertaking other marketing activities,” he says. %% Marketing analysts have long pointed out that the jewellery industry lags way behind the general marketing spend of other categories, particulary those in the luxury category. Whereas the average spend for the luxury industry is about 12 per cent of sales, for jewellery it is as low as two per cent. So, the general thinking is that the jewellery industry has very little exposure on the marketing front.%% However, experts point out that in times of recession, though organisations may feel cutting budgets or deferring spends, marketing is actually of great importance. %% “We never change the long-term strategy because of short-term problems,” Yves Carcelle CEO of Louis Vuitton is reported to have told Business Week magazine in 2008. %% There are also numerous examples of successful brands which used the opportunities in times of recession to emerge as market leaders to enter the market.%% There is a lot of wisdom in the way marketers approach difficult times. It is time for the jewellery industry to take its place in the contemporary world and stand shoulder to shoulder with other leading products. This implies revitalising itself on many fronts, not the least of which is marketing. There is a growing change taking place in other areas like product quality, business standards, selling environments etc. Maybe it is also time for a new beginning on the marketing front. While a few leading players have got the message and making the right moves, the vast majority of individual jewellers continue to operate unsung and unknown. %% It is heartening that the industry organisations are showing concern about the issue and are poised to take up programmes that will promote the category as a whole. %% New beginnings are always promising. %%
Looking back, one can almost pinpoint when the dark shadow of recession began creeping in on India. %% The year 2011 began brightly enough. The country had come through almost unscathed from the recession that struck the world in September 2008. Save for a few blips immediately post the onset of the crisis – and that mainly as a result of sentiment and confidence issues – the country seemed stable enough, and way ahead of the western world in real growth terms. Its GDP was fairly strong, its HNI population was expanding and increasing its wealth, the internal market was booming and industrial output was strong. %% For the gems and jewellery industry too, 2009 and 2010 were good years, as a result. Gold, diamond and platinum jewellery were growing at a good pace. Consumer sentiment was high, and the prices of gold and diamonds began climbing up even more on the back of strengthened demand. %% As business in the industry trade fairs held in the earlier part of the year continued to boom and resound with the delight of manufacturers, the industry was lulled into confidence. Then, the US debt crisis and the downgrading of the country by Standard and Poor’s, and the Eurozone crisis struck. The realisation that the US was still not out of the dumps and wouldn’t be for some time; and the fear that other European countries would go over the brink, caused widespread concern. The Indian stock market tumbled and business sentiment plummeted along with it, even as gold continued on its upward climb reaching an all-time high. All this came slam-bang in the middle of the country’s largest trade fair held in August, the IIJS 2011 – a show keenly awaited by the industry as the best place to do business. %% That was when the shadow struck. And things have never been quite the same as when the year began. By the end of the year, the shadow had lengthened and deepened. %% {{The Economic Backdrop}} %% Analysts say that 2011 has been one of the worst years for Mumbai’s Dalal Street, the hub of the equity market. The BSE sensex closed the year at 15455, down nearly 25 (24.6 to be exact) per cent from the 2010 close of 20500. The more broad-based NSE Nifty index also fell by 24.61 per cent in the same period.%% In the latter part of the year, as the FIIs began pulling out of the Indian equity market, it continued to impact the market, in turn affecting investor sentiment, leading to further falls. %% On the other hand, many of these foreign funds opted to buy dollar denominated assets, pushing up the value of the dollar, which strengthened against most currencies, thus leading to a greatly weakened rupee. Indian currency saw a fall of 19 per cent against the dollar in 2011.%% Inflation too had been running high for some time causing great concern to the government. In an effort to curb the high inflation, the RBI continued to hike key policy rates through the year, which reached 8.50 per cent in December 2011, as compared to 6.25 per cent in the same month last year. This meant that credit became more expensive and the situation was compounded for those who held dollar loans. %% All this taken together with high raw material costs, meant that India Inc faced tough times. Capital expenditure plans were deferred or shelved. %% Not surprisingly, the ground reality was reflected in the growth figures for India, even for the period prior to when the problems became manifest and became widely discussed. For the first half of 2011-12, GDP growth fell to 7.3 per cent against the 8.6 per cent registered in the corresponding period last year, slumping further to 6.9 per cent for the June-September period. %%
Looking at the situation, Finance Minister Pranab Mukherjee lowered growth projection to 7.5 per cent for the current financial year, as against the 9 per cent budgetary target (last fiscal saw a GDP growth of 8.5 per cent). However, experts feel that the actual growth finally achieved could be even lower, at around 7 per cent. %% While this performance might not seem too bad viewed against the performance of most other countries – certainly the Eurozone ones and the US – this, taken with the overall situation points to a change from a few years or even a year back when India was seen as a strong economic powerhouse with all its engines roaring. Though not entirely a lost cause, what is causing concern is the prospect that the recessionary shadow may actually hang over the country for some time to come and that things may even get worse before they get better. %% {{The Jewellery Market}} %% Changing focus from the macro to the micro and zooming in to things closer at hand to the jewellery industry, one finds that the global and local conditions have had a huge impact on gold – prices and consumption patterns. Investors everywhere have chosen, in recent times, to turn to gold, which is generally seen as a safe haven and the ideal hedge against inflation and weak economic conditions. As a result, the price of gold has seen an increase of over 31 per cent in 2011, rising from the Rs. 20,500 per 10 gramme mark at the beginning of the year to close the year at Rs. 27,000 per 10 gramme, but on the way crossing the Rs. 28,000 per 10 gramme mark in August and briefly touching the Rs. 29,000 per 10 gramme mark in early December. %% Added to this was the high volatility of gold prices throughout the period with rates changing even on the same day.%% Diamond prices were also on the upswing post the recession and reached a record high in the earlier part of this year, on the back of good demand in the consumer markets. Coloured gemstones too saw prices firming up. %% The overall result, of course, was that jewellery prices climbed upwards.%% However, in the face of strong demand till the first quarter of this year at the B2B level, the diamond and gemstone manufacturers were quite buoyed up. Though the retail trade saw that some price resistance was setting in on the part of the consumers, they were, nonetheless, generally quite sanguine in the belief that it would not necessarily impact sales to any great degree, and were busy fashioning their product to adapt to market reality. %% By August, the buzz was that the market was slowing. There were reports of many jewellers “just sitting around” with little store traffic. The August crisis only made things worse, and for the first time, buyers at the B2B level seemed to be restrained. They were hesitant to purchase goods, except what was absolutely necessary, unsure whether their customers would take the prices in their stride. They were also waiting to see if prices would fall.%% In its report on the third quarter of 2011, the World Gold Council noted: “Jewellery demand in India was sluggish during the seasonally slow months of July and August, compounded by high inflation and greater volatility in the local gold price. Buying has since recovered slightly with the onset of the festive and wedding season. Overall, Indian jewellery demand in Q3 saw a 26% decline in tonnage, when compared to the same quarter in 2010, to 125.3 tonnes, however yearly demand to the end of September is very close to the record levels seen in 2010.”%%
Significantly, the report also noted that global investment demand at 468.1 tonnes in the same quarter, rose by 33 per cent compared to the same period last year and in value terms was worth almost US $ 25.6 bn, almost double compared to the value in Q3 2010. However, global demand for jewellery at 465.6 tonnes in Q3 2011 was lower by 10 per cent from levels in the same period last year, while in value terms this figure amounted to US$ 25.4 billion, 24 per cent higher than last year’s third quarter.$$ The global trend was reflected in India as well.%% {{Industryspeak}} %% The Indian season of 2011, comprising both wedding and festival and commencing around September, which though better than the earlier months was not nearly as good for jewellers as it usually is. %% While countrywide figures are difficult to come by, the Chairman of the All-India Gems & Jewellery Trade Federation, Bachhraj Bamalwa said, “Overall in India, jewellery sales have fallen by about 30 per cent in volume terms, during this year’s season.” %% However, reports suggest that there was an increase in the sale of bars and coins. This might make up for the volumes of gold imported, but is not seen as a healthy sign by the industry. %% “If demand for fabricated jewellery falls, it affects the entire industry negatively,” said Sanjay Kothari, Vice Chairman of The Gem & Jewellery Export Promotion Council. “The last few months have been quite bad.” %% However, Kothari admits that the situation is better for organised players, which seems to be borne out by others as well.%% “Our experience has not been very bad,” says Ishu Datwani, Anmol Jewellers, Mumbai, describing the experience of the brand for this season. “The only thing is that buying is not taking place on a consistent basis,” he said. “Like right now, there are large crowds in the showroom. Two hours later it might be empty.” %% “How you perform has a lot to do with a jeweller’s individual marketing efforts and effective wooing of clients,” opines Datwani. “The measures we have taken seem to have paid off.” These include an entire gamut - from personalised contact with clients when new collections are launched, to advertising in mainstream media. %%
More importantly, Datwani spells out his approach. “A few months everyone was talking about the business being down, and the media was full of the depressing news on the international and national front. And when you are surrounded by soothsayers of doom and gloom on all sides, it really pulls you down,” he recounts. “I found all of this taking a toll on my thought processes. Around then, I read somewhere that only about one per cent of people were exposed to the stock markets. And I told myself, I will concentrate on the other 99 per cent. I told myself business is going to be good, and began taking a positive approach, and proactively taking steps to see that we reached out to our customers. That really worked.”%% The other aspect that Datwani stresses is a unique product. “Designing is very important,” he says. “Especially in more difficult times, consumers will buy jewellery from places that have fabulous designs.”%% Saurabh Gadgil of Pune-based P.N. Gadgil, is gung-ho from a different angle. “The situation in the market reflects more the fear factor than an actual drop in sales,” he feels. “The GDP growth is slowing, stock markets are down, the rupee is weaker – India is facing problems from all sides; so sentiment is, naturally, not good.”%% However, Gadgil does admit that “jewellery sales have not grown as they should”. “The value has gone up but the quantity has dropped,” he confirms. “But there is no need to panic. In a recession, while some people lose money, there will also always be those who make windfall profits.”%% He also points out the silver lining – gold has emerged as a favoured instrument of investment, in these uncertain times.%% Marketing is also important in Gadgil’s lexicon. “People do have the money to spend and jewellers need to be visible, hence marketing is needed.”%% T. Nandakumar, Chief Financial Officer of Joyalukkas, points out that the high gold prices combined with extreme volatility has led to “uncertainty in the minds of investors” in terms of to buy or not to buy, or to wait for prices to settle down. “Most people are only making purchases if there is an unavoidable reason, like a wedding in the family,” he says.%% “Whereas earlier those who bought jewellery, especially for weddings would plan in terms of a certain quantity of gold – so many grammes or tolas of gold to be purchased - now they are budgeting in terms of rupees,” he says. “Volume sales have gone down while value may have increased.”%% Nandakumar says that while the Joyalukkas group’s overall sales have gone up marginally during the season, this is more due to an expansion in the outlet network, than real growth.%% Touching on the importance of marketing, Nanadakumar feels that the mindset of consumers in metros is different from that in Tier II and Tier III cities and towns. “In metros, there is greater demand for value-added jewellery and hence marketing and branding is more important in that segment,” he says. “However, the bulk of the jewellery market is accounted for by sales in Tier II and Tier III cities and towns. There, people are more price conscious, which is the most important factor. In these areas, marketing does not greatly impact buying – but yes, consumers need to be aware of your existence so that they come to you and to that extent you need to have a marketing programme in place.”%%
The experience of Reliance Jewels is slightly different. “Our experience may not be representative of the industry,” cautions Ashok Kaul, Business Head & Vice President – Reliance Jewels. “We are a fairly young brand in the business and we are evolving, expanding by opening new stores, and hence have been seeing good growth.” %% However, Kaul confirms the general trend in the industry. “From all reports, it does appear that the jewellery market is a bit slow,” he says. “For example, our vendor partners who are also supplying to other retailers tell us that post-Diwali, there has been a lag in orders. Earlier, if there were orders on account of replacement or replenishment by 10-12 days after Diwali, this time there has been a time lag, and these have come in only after two or even three weeks. This shows that Diwali sales have been slow.”%% Kaul reiterates the opinion expressed by other jewellers – economic slowdon is affecting consumer sentiment, price volatility is affecting decision to purchase. %% “There are real challenges that the industry has to face and address,” he says. But he is confident of the long term prospects of the sector. “Bulk of the jewellery market in India – about 60-65 per cent of the value purchase – is accounted for by the wedding market. And there is no threat to that.” Then there is the investment demand in terms of bars and bullion and that too will remain strong he feels. %% Kaul raises an important issue when he says, “The largest retail chain in India does not have more than a 3-4 per cent share of the jewellery market. That means that the jewllery industry is a very fragmented one and individual players could be affected negatively. In the current scenario, it is likely that some consolidation might take place. The structure of the market could change.” %% {{The Need for Marketing }} %% It is precisely impact of the current situation on the average jeweller that the industry bodies are concerned about.%% “Large, organised players may be able to sustain in bad times through their own marketing efforts, but medium and small players find it difficult,” stresses Bamalwa. “Hence, it is important that there should be an industrywide effort and a general programme to promote jewellery. At an individual level you cannot create the kind of hype and buzz that is needed to meet the challenges of the situation.”%% Kothari, a long time advocate of industry-wide promotion and the person behind the all-India Anant promotional campaign undertaken a couple of years back in India, says “Collective effort for jewellery as a category, targeted to consumers, is extremely important. Individual marketeing is not enough.” %% Kothari points out that for over four decades, the global industry benefited from the generic promotions of diamond jewellery that De Beers was undertaking. But they have withdrawn from this and there is no concerted effort for the jewellery sector. It was De Beers’ efforts and the Nakshatra campaign which is famously known to have opened the diamond jewellery market in India. %% “There are too many programmes at the B2B level,” Kothari stresses. “In a time of crisis especially, it is necessary to go to the consumer. We have started discussions on this and hopefully we will bring on one platform various bodies like Rio Tinto, PGI, Forevermark and together with the industry launch some initiatives.”%% Bamalwa goes even further – “There are too many B2B shows taking place, they should be curbed,” he says. He also informs us that the GJF is discussing ways and means of initiating some programmes like its hugely popular Lucky Lakshmi. “A national programme has severe logistical problems,” he says. “So we are now planning for promotions at a regional level. We will soon be announcing plans for these.”%%
While there is a large segment of industry members who agree with them, not everyone in the industry has bought into the agreement of collective marketing.%% Gadgil for one feels that marketing is not going to be the key differentiator. “When times are tough, there is little you can do about it,” he says philosophically. “You have to ride it out.” The way to handle bad times, Gadgil feels, is to be innovative about the product. “Good designs and lightweight collections are the need of the day to beat recessionary times,” he says. “Concentrating on the top and bottom ends of the pyramid should be the mantra for 2012.”%% Nanadakumar, too, feels that putting in more money into marketing will not help. Kaul brings out another facet saying, “It is only when the market is more organised, when the top three or four players have a 40-50 per cent share of the entire market that collaborative efforts will help. In this fragmented state, it will not even be possible.” %% However, interestingly, all of them do believe that marketing is necessary and important at all times, albeit at an individual level. In fact, Kaul even points out to how market dynamics – competition and more organised players coming on the scene – have pushed even the oldest names in the jewellery business to turn to marketing. “Even those jewellers who earlier thought that it was below their dignity to do any marketing as they were at a special level having loyal customers over generation, have today started advertising and undertaking other marketing activities,” he says. %% Marketing analysts have long pointed out that the jewellery industry lags way behind the general marketing spend of other categories, particulary those in the luxury category. Whereas the average spend for the luxury industry is about 12 per cent of sales, for jewellery it is as low as two per cent. So, the general thinking is that the jewellery industry has very little exposure on the marketing front.%% However, experts point out that in times of recession, though organisations may feel cutting budgets or deferring spends, marketing is actually of great importance. %% “We never change the long-term strategy because of short-term problems,” Yves Carcelle CEO of Louis Vuitton is reported to have told Business Week magazine in 2008. %% There are also numerous examples of successful brands which used the opportunities in times of recession to emerge as market leaders to enter the market.%% There is a lot of wisdom in the way marketers approach difficult times. It is time for the jewellery industry to take its place in the contemporary world and stand shoulder to shoulder with other leading products. This implies revitalising itself on many fronts, not the least of which is marketing. There is a growing change taking place in other areas like product quality, business standards, selling environments etc. Maybe it is also time for a new beginning on the marketing front. While a few leading players have got the message and making the right moves, the vast majority of individual jewellers continue to operate unsung and unknown. %% It is heartening that the industry organisations are showing concern about the issue and are poised to take up programmes that will promote the category as a whole. %% New beginnings are always promising. %%
Looking back, one can almost pinpoint when the dark shadow of recession began creeping in on India. %% The year 2011 began brightly enough. The country had come through almost unscathed from the recession that struck the world in September 2008. Save for a few blips immediately post the onset of the crisis – and that mainly as a result of sentiment and confidence issues – the country seemed stable enough, and way ahead of the western world in real growth terms. Its GDP was fairly strong, its HNI population was expanding and increasing its wealth, the internal market was booming and industrial output was strong. %% For the gems and jewellery industry too, 2009 and 2010 were good years, as a result. Gold, diamond and platinum jewellery were growing at a good pace. Consumer sentiment was high, and the prices of gold and diamonds began climbing up even more on the back of strengthened demand. %% As business in the industry trade fairs held in the earlier part of the year continued to boom and resound with the delight of manufacturers, the industry was lulled into confidence. Then, the US debt crisis and the downgrading of the country by Standard and Poor’s, and the Eurozone crisis struck. The realisation that the US was still not out of the dumps and wouldn’t be for some time; and the fear that other European countries would go over the brink, caused widespread concern. The Indian stock market tumbled and business sentiment plummeted along with it, even as gold continued on its upward climb reaching an all-time high. All this came slam-bang in the middle of the country’s largest trade fair held in August, the IIJS 2011 – a show keenly awaited by the industry as the best place to do business. %% That was when the shadow struck. And things have never been quite the same as when the year began. By the end of the year, the shadow had lengthened and deepened. %% {{The Economic Backdrop}} %% Analysts say that 2011 has been one of the worst years for Mumbai’s Dalal Street, the hub of the equity market. The BSE sensex closed the year at 15455, down nearly 25 (24.6 to be exact) per cent from the 2010 close of 20500. The more broad-based NSE Nifty index also fell by 24.61 per cent in the same period.%% In the latter part of the year, as the FIIs began pulling out of the Indian equity market, it continued to impact the market, in turn affecting investor sentiment, leading to further falls. %% On the other hand, many of these foreign funds opted to buy dollar denominated assets, pushing up the value of the dollar, which strengthened against most currencies, thus leading to a greatly weakened rupee. Indian currency saw a fall of 19 per cent against the dollar in 2011.%% Inflation too had been running high for some time causing great concern to the government. In an effort to curb the high inflation, the RBI continued to hike key policy rates through the year, which reached 8.50 per cent in December 2011, as compared to 6.25 per cent in the same month last year. This meant that credit became more expensive and the situation was compounded for those who held dollar loans. %% All this taken together with high raw material costs, meant that India Inc faced tough times. Capital expenditure plans were deferred or shelved. %% Not surprisingly, the ground reality was reflected in the growth figures for India, even for the period prior to when the problems became manifest and became widely discussed. For the first half of 2011-12, GDP growth fell to 7.3 per cent against the 8.6 per cent registered in the corresponding period last year, slumping further to 6.9 per cent for the June-September period. %%
Looking at the situation, Finance Minister Pranab Mukherjee lowered growth projection to 7.5 per cent for the current financial year, as against the 9 per cent budgetary target (last fiscal saw a GDP growth of 8.5 per cent). However, experts feel that the actual growth finally achieved could be even lower, at around 7 per cent. %% While this performance might not seem too bad viewed against the performance of most other countries – certainly the Eurozone ones and the US – this, taken with the overall situation points to a change from a few years or even a year back when India was seen as a strong economic powerhouse with all its engines roaring. Though not entirely a lost cause, what is causing concern is the prospect that the recessionary shadow may actually hang over the country for some time to come and that things may even get worse before they get better. %% {{The Jewellery Market}} %% Changing focus from the macro to the micro and zooming in to things closer at hand to the jewellery industry, one finds that the global and local conditions have had a huge impact on gold – prices and consumption patterns. Investors everywhere have chosen, in recent times, to turn to gold, which is generally seen as a safe haven and the ideal hedge against inflation and weak economic conditions. As a result, the price of gold has seen an increase of over 31 per cent in 2011, rising from the Rs. 20,500 per 10 gramme mark at the beginning of the year to close the year at Rs. 27,000 per 10 gramme, but on the way crossing the Rs. 28,000 per 10 gramme mark in August and briefly touching the Rs. 29,000 per 10 gramme mark in early December. %% Added to this was the high volatility of gold prices throughout the period with rates changing even on the same day.%% Diamond prices were also on the upswing post the recession and reached a record high in the earlier part of this year, on the back of good demand in the consumer markets. Coloured gemstones too saw prices firming up. %% The overall result, of course, was that jewellery prices climbed upwards.%% However, in the face of strong demand till the first quarter of this year at the B2B level, the diamond and gemstone manufacturers were quite buoyed up. Though the retail trade saw that some price resistance was setting in on the part of the consumers, they were, nonetheless, generally quite sanguine in the belief that it would not necessarily impact sales to any great degree, and were busy fashioning their product to adapt to market reality. %% By August, the buzz was that the market was slowing. There were reports of many jewellers “just sitting around” with little store traffic. The August crisis only made things worse, and for the first time, buyers at the B2B level seemed to be restrained. They were hesitant to purchase goods, except what was absolutely necessary, unsure whether their customers would take the prices in their stride. They were also waiting to see if prices would fall.%% In its report on the third quarter of 2011, the World Gold Council noted: “Jewellery demand in India was sluggish during the seasonally slow months of July and August, compounded by high inflation and greater volatility in the local gold price. Buying has since recovered slightly with the onset of the festive and wedding season. Overall, Indian jewellery demand in Q3 saw a 26% decline in tonnage, when compared to the same quarter in 2010, to 125.3 tonnes, however yearly demand to the end of September is very close to the record levels seen in 2010.”%%
Significantly, the report also noted that global investment demand at 468.1 tonnes in the same quarter, rose by 33 per cent compared to the same period last year and in value terms was worth almost US $ 25.6 bn, almost double compared to the value in Q3 2010. However, global demand for jewellery at 465.6 tonnes in Q3 2011 was lower by 10 per cent from levels in the same period last year, while in value terms this figure amounted to US$ 25.4 billion, 24 per cent higher than last year’s third quarter.$$ The global trend was reflected in India as well.%% {{Industryspeak}} %% The Indian season of 2011, comprising both wedding and festival and commencing around September, which though better than the earlier months was not nearly as good for jewellers as it usually is. %% While countrywide figures are difficult to come by, the Chairman of the All-India Gems & Jewellery Trade Federation, Bachhraj Bamalwa said, “Overall in India, jewellery sales have fallen by about 30 per cent in volume terms, during this year’s season.” %% However, reports suggest that there was an increase in the sale of bars and coins. This might make up for the volumes of gold imported, but is not seen as a healthy sign by the industry. %% “If demand for fabricated jewellery falls, it affects the entire industry negatively,” said Sanjay Kothari, Vice Chairman of The Gem & Jewellery Export Promotion Council. “The last few months have been quite bad.” %% However, Kothari admits that the situation is better for organised players, which seems to be borne out by others as well.%% “Our experience has not been very bad,” says Ishu Datwani, Anmol Jewellers, Mumbai, describing the experience of the brand for this season. “The only thing is that buying is not taking place on a consistent basis,” he said. “Like right now, there are large crowds in the showroom. Two hours later it might be empty.” %% “How you perform has a lot to do with a jeweller’s individual marketing efforts and effective wooing of clients,” opines Datwani. “The measures we have taken seem to have paid off.” These include an entire gamut - from personalised contact with clients when new collections are launched, to advertising in mainstream media. %%
More importantly, Datwani spells out his approach. “A few months everyone was talking about the business being down, and the media was full of the depressing news on the international and national front. And when you are surrounded by soothsayers of doom and gloom on all sides, it really pulls you down,” he recounts. “I found all of this taking a toll on my thought processes. Around then, I read somewhere that only about one per cent of people were exposed to the stock markets. And I told myself, I will concentrate on the other 99 per cent. I told myself business is going to be good, and began taking a positive approach, and proactively taking steps to see that we reached out to our customers. That really worked.”%% The other aspect that Datwani stresses is a unique product. “Designing is very important,” he says. “Especially in more difficult times, consumers will buy jewellery from places that have fabulous designs.”%% Saurabh Gadgil of Pune-based P.N. Gadgil, is gung-ho from a different angle. “The situation in the market reflects more the fear factor than an actual drop in sales,” he feels. “The GDP growth is slowing, stock markets are down, the rupee is weaker – India is facing problems from all sides; so sentiment is, naturally, not good.”%% However, Gadgil does admit that “jewellery sales have not grown as they should”. “The value has gone up but the quantity has dropped,” he confirms. “But there is no need to panic. In a recession, while some people lose money, there will also always be those who make windfall profits.”%% He also points out the silver lining – gold has emerged as a favoured instrument of investment, in these uncertain times.%% Marketing is also important in Gadgil’s lexicon. “People do have the money to spend and jewellers need to be visible, hence marketing is needed.”%% T. Nandakumar, Chief Financial Officer of Joyalukkas, points out that the high gold prices combined with extreme volatility has led to “uncertainty in the minds of investors” in terms of to buy or not to buy, or to wait for prices to settle down. “Most people are only making purchases if there is an unavoidable reason, like a wedding in the family,” he says.%% “Whereas earlier those who bought jewellery, especially for weddings would plan in terms of a certain quantity of gold – so many grammes or tolas of gold to be purchased - now they are budgeting in terms of rupees,” he says. “Volume sales have gone down while value may have increased.”%% Nandakumar says that while the Joyalukkas group’s overall sales have gone up marginally during the season, this is more due to an expansion in the outlet network, than real growth.%% Touching on the importance of marketing, Nanadakumar feels that the mindset of consumers in metros is different from that in Tier II and Tier III cities and towns. “In metros, there is greater demand for value-added jewellery and hence marketing and branding is more important in that segment,” he says. “However, the bulk of the jewellery market is accounted for by sales in Tier II and Tier III cities and towns. There, people are more price conscious, which is the most important factor. In these areas, marketing does not greatly impact buying – but yes, consumers need to be aware of your existence so that they come to you and to that extent you need to have a marketing programme in place.”%%
The experience of Reliance Jewels is slightly different. “Our experience may not be representative of the industry,” cautions Ashok Kaul, Business Head & Vice President – Reliance Jewels. “We are a fairly young brand in the business and we are evolving, expanding by opening new stores, and hence have been seeing good growth.” %% However, Kaul confirms the general trend in the industry. “From all reports, it does appear that the jewellery market is a bit slow,” he says. “For example, our vendor partners who are also supplying to other retailers tell us that post-Diwali, there has been a lag in orders. Earlier, if there were orders on account of replacement or replenishment by 10-12 days after Diwali, this time there has been a time lag, and these have come in only after two or even three weeks. This shows that Diwali sales have been slow.”%% Kaul reiterates the opinion expressed by other jewellers – economic slowdon is affecting consumer sentiment, price volatility is affecting decision to purchase. %% “There are real challenges that the industry has to face and address,” he says. But he is confident of the long term prospects of the sector. “Bulk of the jewellery market in India – about 60-65 per cent of the value purchase – is accounted for by the wedding market. And there is no threat to that.” Then there is the investment demand in terms of bars and bullion and that too will remain strong he feels. %% Kaul raises an important issue when he says, “The largest retail chain in India does not have more than a 3-4 per cent share of the jewellery market. That means that the jewllery industry is a very fragmented one and individual players could be affected negatively. In the current scenario, it is likely that some consolidation might take place. The structure of the market could change.” %% {{The Need for Marketing }} %% It is precisely impact of the current situation on the average jeweller that the industry bodies are concerned about.%% “Large, organised players may be able to sustain in bad times through their own marketing efforts, but medium and small players find it difficult,” stresses Bamalwa. “Hence, it is important that there should be an industrywide effort and a general programme to promote jewellery. At an individual level you cannot create the kind of hype and buzz that is needed to meet the challenges of the situation.”%% Kothari, a long time advocate of industry-wide promotion and the person behind the all-India Anant promotional campaign undertaken a couple of years back in India, says “Collective effort for jewellery as a category, targeted to consumers, is extremely important. Individual marketeing is not enough.” %% Kothari points out that for over four decades, the global industry benefited from the generic promotions of diamond jewellery that De Beers was undertaking. But they have withdrawn from this and there is no concerted effort for the jewellery sector. It was De Beers’ efforts and the Nakshatra campaign which is famously known to have opened the diamond jewellery market in India. %% “There are too many programmes at the B2B level,” Kothari stresses. “In a time of crisis especially, it is necessary to go to the consumer. We have started discussions on this and hopefully we will bring on one platform various bodies like Rio Tinto, PGI, Forevermark and together with the industry launch some initiatives.”%% Bamalwa goes even further – “There are too many B2B shows taking place, they should be curbed,” he says. He also informs us that the GJF is discussing ways and means of initiating some programmes like its hugely popular Lucky Lakshmi. “A national programme has severe logistical problems,” he says. “So we are now planning for promotions at a regional level. We will soon be announcing plans for these.”%%
While there is a large segment of industry members who agree with them, not everyone in the industry has bought into the agreement of collective marketing.%% Gadgil for one feels that marketing is not going to be the key differentiator. “When times are tough, there is little you can do about it,” he says philosophically. “You have to ride it out.” The way to handle bad times, Gadgil feels, is to be innovative about the product. “Good designs and lightweight collections are the need of the day to beat recessionary times,” he says. “Concentrating on the top and bottom ends of the pyramid should be the mantra for 2012.”%% Nanadakumar, too, feels that putting in more money into marketing will not help. Kaul brings out another facet saying, “It is only when the market is more organised, when the top three or four players have a 40-50 per cent share of the entire market that collaborative efforts will help. In this fragmented state, it will not even be possible.” %% However, interestingly, all of them do believe that marketing is necessary and important at all times, albeit at an individual level. In fact, Kaul even points out to how market dynamics – competition and more organised players coming on the scene – have pushed even the oldest names in the jewellery business to turn to marketing. “Even those jewellers who earlier thought that it was below their dignity to do any marketing as they were at a special level having loyal customers over generation, have today started advertising and undertaking other marketing activities,” he says. %% Marketing analysts have long pointed out that the jewellery industry lags way behind the general marketing spend of other categories, particulary those in the luxury category. Whereas the average spend for the luxury industry is about 12 per cent of sales, for jewellery it is as low as two per cent. So, the general thinking is that the jewellery industry has very little exposure on the marketing front.%% However, experts point out that in times of recession, though organisations may feel cutting budgets or deferring spends, marketing is actually of great importance. %% “We never change the long-term strategy because of short-term problems,” Yves Carcelle CEO of Louis Vuitton is reported to have told Business Week magazine in 2008. %% There are also numerous examples of successful brands which used the opportunities in times of recession to emerge as market leaders to enter the market.%% There is a lot of wisdom in the way marketers approach difficult times. It is time for the jewellery industry to take its place in the contemporary world and stand shoulder to shoulder with other leading products. This implies revitalising itself on many fronts, not the least of which is marketing. There is a growing change taking place in other areas like product quality, business standards, selling environments etc. Maybe it is also time for a new beginning on the marketing front. While a few leading players have got the message and making the right moves, the vast majority of individual jewellers continue to operate unsung and unknown. %% It is heartening that the industry organisations are showing concern about the issue and are poised to take up programmes that will promote the category as a whole. %% New beginnings are always promising. %%

Be the first to comment

Leave a comment

Email Alerts

WhatsApp Alerts