India, the land of dreams, is fast realizing its potential. The world is taking note of the phenomenal potential prevalent in the Indian markets. Driven by changing lifestyles, strong economic growth and favourable demographic profiles, India is moving towards a consumption based economy. A recent survey by NCAER shows that the number of families with more than Rs. 1 crore annual earnings will double by 2010. Affluent Indian Men is one segment which is making its presence felt and all the marketers are running post to pillar to grab a pie of this segment. The Gems and Jewellery business in India is worth 14 billion US$ and has been traditionally associated with women. Men's Jewellery is one offering which is conspicuous by its absence. This presents an opportunity as growing number of young high earners are willing to flaunt their wealth as well as make a style statement at the same time. Jewellery provides an added benefit of an investment. So this sector is poised to grow at a rapid pace. Moreover, the business in this sector is primarily unorganised which lends an opportunity for organised players like Titan.
It is proposed that Titan should leverage its Brand Equity and provide an offering of Men's Jewellery which would include rings, bracelets, chains and luxury watches. This offering will be primarily for the Indian market but would cater to the growing demands of export too. The primary platform for selling would be the trust associated with the Titan which is a Tata Group company. In addition, contemporary and stylish designs with an option to customise the product will be the points-of parity with the unorganised sector. The integrated marketing communications (IMC) strategy would use lifestyle magazines, celebrity endorsements and media advertisements for creating awareness of the extended brand. Finally, the supply chain needs to be maintained well oiled to gain the cost advantage for the export market. This shall be ensured by using new technologies of ERP and Electronic Data Interchange.
Overview of the Industry and Market Potential
The increasing prosperity, especially in metropolitan cities, is presenting a trend where a large proportion of people are spending their disposable income on luxury goods. A recent income survey says the number of multi-millionaire Indian families (with more than Rs. 1 crore annual earnings) is estimated to have risen by two-and-a-half times in the past four years (source: ibef.org). The NCAER survey says the current figure will double by 2010. India offers attractive opportunities across the industry value chain. The value chain of gems and jewellery industry can be represented in the following manner.
Men's Jewellery is one segment where a lot of business is in the unorganised sector and a lot of potential remains in its exports. This gems and jewellery industry holds a very important position in the Indian economy. The two prime components of this industry are Gold and Diamond Jewellery with Gold comprising about 80% of the total market.
India Gems & Jewellery Industry Highlights
Jewellery market size US$ 13 billion
Diamond jewellery US$ 1.2 billion
Gold jewellery market growth year on year 15%
Diamond jewellery market growth 27%
Gems and Jewellery has over 1500 players with only 80 players having a turnover of more than Rs. 200 millions. The organised sector comprises only 4% of the total trade. It is expected that the industry will move towards organised sector as it matures and the share of family jewellers would decline.
The organised sector provides the benefits of better quality and neat finish along with the reliability. Tata with its Tanishq Brand has ventured into this segment with a vision to "Be the most desirable jewellery brand for Indian Women".
Export Potential: India has well-established capabilities in making hand-made jewellery in traditional as well as modern...