Independent gold jewellery shops focus on personalisation and bridal jewellery, helping them gain a dominant market position, but millennials prefer online shopping, finds a global report.
Millennials are driving growth in India’s online gold jewellery market with an average ticket size of five to 10 grams; however, small, independent jewellery shops still dominate the Indian gold jewellery market, with about 37 per cent market share, a report titled “Jewellery Market Structure,” published by the World Gold Council (WGC) on Wednesday said.
WGC India CEO Somasundaram PR said India’s retail jewellery market was several structural changes over the last decade, driven by regulatory and consumer behavioural changes.
“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.
However, he added that small jewelers should be more transparent and adopt technology faster to access credit like national and regional store chains and protect their market share.
What Do Millennials Want?
The report noted that millennials born between 1986 and 1996 are driving growth in the online jewellery market, with average purchases ranging between 5 and 10 grams. The online market has also seen rapid growth due to the growing internet penetration and an increase in smartphone sales.
Regarding the type of jewellery mostly bought online, the report said lightweight, daily wear jewellery in the 18-carat gold segment has been in high demand. The report predicts that the online jewellery market share could rise 7 to 10 per cent over the next five years.
Retail Jewellery Market Trend
The report noted that the jewellery industry has become more organised and transparent in the last decade due to regulations, consumer preferences, etc. Consequently, retail
jewellery store chains multiplied in the past 10 to 15 years, with a market share of 35 per cent as of 2021.
“Demand for better designs and consumer experience, a growing awareness about hallmarking, better pricing structures and competitive return policies, have accelerated the shift towards chain stores,” the report noted.
Stores with national-wide operations, however, tend to focus on daily wear and fast-moving jewellery items like chains and rings, accounting for 50 to 60 per cent of the business. The report estimated that India’s top five jewellery retailers would open roughly 800 to 1000 stores in the next five years, increasing the market share from 35 per cent to 40 per cent.
Independent Retailers Focus On Customer Relationship
The report noted that stand-alone independent jewellery shops initially struggled to compete with store chains but could sustain themselves by adopting better practices. As of 2021, the independent jewellery shops dominated the market with about 37 per cent share.
The report highlighted three factors or services for their dominant position: bridal jewellery, customised jewellery, and personalised shopping experience. In addition, the study noted that independent jewelers leverage their better understanding of the local customers and design preferences to customise the products according to their needs and budget, even offering them flexible payment options.