Please Share::
India Equity Research Reports, IPO and Stock NewsVisit http://indiaer.blogspot.com/ for complete details �� ��
http://www.kotaksecurities.com/pdf/indiadaily/indiadaily26032012.pdf
Bazaar Bytes #6: Indian jewelry retail. We review the jewelry retail industry, which is
witnessing a significant shift in terms of (1) mandatory hallmarking, (2) increasing share
of the organized segment, (3) erstwhile regional players going national, (4) a host of
players (PCJ, TBZ, Joy Alukkas etc.) tapping the capital market to fund expansion plans,
(5) erstwhile jewelry exporters/wholesalers entering the retail market with their own
brands and (6) innovative product/brand launches to encourage casual purchases. Titan
(rated ADD) with first-mover advantage is likely to benefit most.
India jewelry retail: Changing competitive landscape with the organized segment grows big
We find the Indian jewelry retail industry at a turning point with the rapid growth of organized
players and erstwhile regional players eyeing a slice of the national market.
` The organized jewelry market forms ~4% of the total jewelry retail market and is growing
faster than the overall jewelry market. As per industry sources, the branded jewelry market is
expected to post CAGR of >40% over the next 4-5 years, given changing lifestyles and higher
marketing investments by organized players. The domestic jewelry market is valued at ~US$55
bn and Titan has ~55% share of the organized pie.
` Erstwhile regional players such as PC Jeweller, Tribhuvandas Bhimji Zaveri (TBZ), JoyAllukas,
Thangamayil Jewellery are expanding their geographical presence to become national players.
PC Jeweller plans to open 30 more stores by FY2014 (20 stores as on August 2011; plans to
add 10 stores in FY2012 and 20 by FY2014), TBZ plans to open 44 stores by FY14 (14 as on
January 2011), JoyAllukas plans to open 14 stores by 1HFY14 (22 stores as on December 2010).
Most of these players are raising/have raised funds from the capital market to fund expansion
plans and are shifting from being purely family-run companies to professional companies.
` In addition to pure-play jewelry retailers, players such as Tara Jewels (primarily engaged in
exports), Gitanjali Gems (started operations as a diamond cutting and polishing company),
Shree Ganesh Jewellery House (manufacturer and exporter of handcrafted gold jewellery),
Rajesh Exports (manufacturer of gold and diamond jewelry, exporter and distributor within India
to the wholesale jewelry market) is also expanding its presence in the Indian jewelry retail space.
` The consumer preference is likely shifting towards diamond and studded jewelry as against pure
gold jewelry, earlier. There are few structural reasons for this, in our view: (1) focus on this
segment by most jewelry retailers as hallmarking became a norm (from the consumer point of
view), (2) higher margin potential in studded jewelry, (3) relative price of studded jewelry being
attractive for the consumer as price of pure gold witnesses significant appreciation. Typically
plain gold jewelry has gross margin of ~7%, designer gold jewelry has ~14%, studded jewelry
has ~17% and diamond jewelry has ~30%.
` In terms of quality the jewelry market has advanced significantly with the introduction of the
Hallmarking Scheme under the Bureau of Indian Standards (BIS). There are about 100 BIS
recognized assaying and hallmarking centers across India. Consumer awareness has increased
and even local jewelers are hallmarking their products to give assurance of quality.
Specialist in diamond jewelry
ReplyDeleteI am very thankful to all your team for sharing such inspirational information.