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The Indian jewellery retail sector has witnessed a remarkable surge, growing from $50 billion in 2018 to an impressive $80 billion (Rs 666,480 crore) in the financial year 2024, as per a recent report by Motilal Oswal Financial Services. This substantial growth is attributed to several key drivers that have propelled the industry forward.
One of the primary factors contributing to this surge is the rise in disposable income among consumers. As more individuals have access to higher incomes, there has been a notable increase in spending on luxury items like jewellery. Additionally, there has been a shift in consumer preferences towards regular wear jewellery, leading to an improved product mix that caters to everyday styling needs.
The report also highlights the role of enhanced product offerings, including innovative designs and the incorporation of diamonds, in attracting customers. Furthermore, the government’s initiative to mandate hallmarking has contributed to building trust among consumers, reassuring them of the quality and authenticity of the jewellery they purchase.
While organised retail jewellers have made significant strides, accounting for 36 to 38 per cent of the market share, the majority of the retail jewellery market is still dominated by unorganised and local players. This includes over 500,000 local goldsmiths and jewellers who continue to cater to a substantial portion of the consumer base.
Gold remains a preferred choice among Indian consumers, with 66 per cent of total gold consumption dedicated to jewellery. The remaining 34 per cent is allocated to bars and coins. India’s gold market relies heavily on imports, with notable fluctuations observed in import volumes from FY18 to FY20.
Factors such as global gold price fluctuations, economic conditions impacting disposable incomes, and seasonal demand spikes during traditional celebrations and weddings have contributed to these import variations. However, there was a notable decline in gold imports in FY20, attributed to increased import duties and the onset of an economic slowdown.
Geographically, states like Tamil Nadu, Maharashtra, Karnataka, West Bengal, and Uttar Pradesh emerge as the top five regions for organised retail jewellery stores in India, showcasing regional preferences and market dynamics.
Weddings and festivals continue to drive demand for jewellery, with bridal jewellery accounting for a significant portion of sales, contributing approximately 55 per cent to total demand. However, there is a growing trend towards daily wear jewellery, which now constitutes 30-35 per cent of the market, particularly targeting younger consumers who seek lightweight and versatile pieces to complement modern attire.
In terms of product segments, bangles and chains remain the primary contributors to domestic jewellery consumption, making up 60-70 per cent of total sales. Necklaces, rings, and earrings also play significant roles, with their sales surging during special occasions.
Sources By Agencies
