Gold- a precious metal used as jewelry, investment, gift and also desire for some people. Towards the end of 2019 it was reported that this world has around 1,97,576 tones of gold above the ground (mined). It is scattered in different forms like Jewellery: 92,947 tones (47%), Private Investment: 42,619 tones (21.6%), Official Holdings: 33,919 tones (21.6%), Other: 28,090 tones (14.2%). Below ground reserves are estimated to be around 54,000 tones as of now. As per the data we can see that gold is majorly used for minting coins and manufacturing jewellery.
According to an article in Forbes Magazine, there was staggering demand of 2,200 tonnes worth gold jewellery around the world in 2018. Gold is one of the finest metal which can be molded into any design, making it suitable for producing jewellery. Other precious metals and crystals include Silver, Diamond and Gemstones which are widely used in jewellery manufacturing. Jewellery made using diamonds and gemstones have a hefty price tag because diamonds and gemstones are considered precious crystals and have high rates comparatively from gold and silver. Crystal jewellery is moreover preferred by the rich segment (people/ class) of the society as it is not affordable by everyone.
Also diamonds and gemstones are not advisable to be used as an investment, hence it has low demand. There are various factors which influence the choices of people while purchasing jewellery. Each part of the world have different choices based on their culture, religion, occasions, environment, etc.
India, often referred to as “Sone Ki Chidiya” (golden bird), is renowned for its gold jewellery with its intricate and exquisite traditional art-forms. India contributes over 29% to the global jewellery and gems consumption, making it one of the world’s largest contributor. India’s Jewellery and Gems sector is home to more than 3,10,000 players. Its market size is estimated to increase by US$ 103.06 billion by 2023.
India consumed 760.4 tonnes of gold in 2018 whereas during the first 9 months of 2019, India’s demand for gold reached 496.11 tonnes. India exported gems and jewellery worth US$ 25.11 billion in FY20P (till January 2020, Provisional). At the same time, Exports of cut and polished diamonds stood at US$ 16.31 billion, which contributed about 73.46% of total gems and jewellery exports in monetary terms.
Gems and Jewellery industry in India plays a vital role in the Indian Economy as it majorly contributes to the total Foreign reserves of the country. Recently in Budget 2019, Government of India hiked import duty on gold to 12.5% from 10% (GST excluded) due to which Gold rates touched new all-time highs in Indian Commodity Market. This highly impacted the purchasing power/ capacity of the people.
In India people not only purchase Gold/ Silver Bars, Jewellery for investment but also as a symbol of pride and prestige. Occasions in India also drive the demand for jewellery in India. Dhanteras (A day during Diwali Festival) is considered one of the most auspicious day to purchase Gold/ Silver Bars and Jewellery. People in India believe that purchasing gold and laying gold in front of Lord Lakshmi while offering her a prayer brings wealth and prosperity to one’s life. As per the data revealed by the Confederation of All India Traders (CAIT), approximately 6000 kg of gold i.e. worth Rs. 2,500 crore was estimated to have been sold on a single day of Dhanteras (25th October) in 2019. Every state in India have different Gem and Jewellery consumption pattern and various forces impact this utilization.
Mumbai is considered as Financial Capital of India, with population of 1.84 crore people (as of 2011 data). In the year 2109, the city consumed around 112.4 tonnes of gold alone. Making it one of the largest consumer nationwide.
Zaveri Bazar, a market which is considered as jewellery shoppers’ paradise is a 150 year old gems and jewellery market located between Crawford Market and Mumbadevi area of Mumbai. Zaveri bazar consists of around 7000 small and big shops, situated in narrow lanes. Some of these shops are around 300 years old, making them iconic place to visit.
These establishments offer vast variety of jewellery including designs and patterns like Kundan, Jadau, Rajasthani, Maharashtrian, Bengali Kada and Necklaces, Italian Jewellery, Diamond and Gemstone Jewellery, Moti Work Jewellery, Silver Jewellery, Artificial Jewellery and 1 Gram gold jewellery.
This market sees huge footfall of people during the times of festival like Akshaya Tritiya, Gudi Padwa & Diwali. On these occasions not only retail businesses but also individual customers approach shops in Zaveri Bazar to purchase jewellery.
Mumbai is also a popular tourist spot in India. People around the world visit the city to explore its culture, heritage and renowned markets. One of the world’s biggest jewellery exhibition- ‘India International Jewellery Show’ is hosted in Mumbai by GJEPC (The Gem & Jewellery Export Promotion Council). GJEPC was set up by the Ministry of commerce, Government of India in 1966. This exhibition entertains visitors from almost each and every part of the globe. Visitors include big / small business owners, resellers, wholesalers, independent customers, jewellery designers, etc.
Cumulative FDI inflows in Gold and Diamond jewellery in the period 2000- 2019 were US$ 1.18 billion.
Indian International Jewellery Show (IIJS), held in August 2018 was home to deals worth Rs. 8,000 crore (US$ 1.18 billion). Many companies such as PC Jewellers, Popley & Sons are planning to introduce Virtual Reality (VR) in the jewellery sector, in which people will be able select any jewellery, examine it from different angles and wear it virtually to see how it looks on them. This technology will change the experience of people purchasing jewellery.
1.4 Government Initiatives
- Hallmarking is made compulsory for Gold Jewellery and Artefacts by the Government of India. A time frame is provided for implementation of this rule i.e. By January 2021.
- In the Union Budget of 2019-20, GST rate on labor work in relation to gems and jewellery is reduced to 5% from 18%.
- To ensure the quality check on gold jewellery, The Bureau of Indian Standards (BIS) has revised some standards on gold jewellery. It states that a gold jewellery must include all the 4 marks said by the BIS i.e. BIS mark, Purity in Carat, Assaying & Hallmarking Center’s identification symbol/ number and Jeweller’s Identification symbol/ number.
- Maharashtra Industrial Development Corporation (MIDC) and The Gems and Jewellery Export Promotion Council (GJEPC) have signed a Memorandum of Understanding (MoU). This step is taken to build our nation’s largest gems & jewellery park at Ghansoli (Navi-Mumbai). This project will comprise of more than 5100 jewellery units build on 25 acres of land. It will take an huge investment of Rs. 13,500 crore (US$ 2.08 billion).
- Government introduced Gold Monetization Scheme, which enables individuals, various trusts and mutual funds to deposit gold with banks and earn interest in return.
1.5 Opportunities and Challenges
- With the growing demand for gems and jewellery, many small jewellery businesses have emerged in past years such as threaderearrings.co.uk and lizziemandler.com. These business houses constitute of Real as well as Imitation Jewellery.
- If we see the price graph of gold and silver prices, it has constantly shown an upward trend from many years. This results in gaining not only consumers but also investors’ confidence for investing in the commodity.
- Jewellery is a product which a consumer purchases after getting satisfied with its design and quality. Consumers still believe that proper design and quality can only be judged through touch and feel of the product. Hence, this consumer behavior results in customers visiting local shops for their purchases and not preferring e-commerce platforms.
- As we know, the corona virus pandemic has forced stock markets to see a lifetime low. Many stocks broke their 52- weeks low price circuit. In this situation only gold and silver prices have risen, which have benefited many people.
- Gems and Jewellery Industry, being one of the largest economic contributor in India also provides jobs to numerous people. They include Artisans, Craftsmen, Salesmen, Delivery Executives, Advertising Agencies, Digital Marketers, Influencers, etc.
YEAR / GOLD RATES IN RS./ 10 GRAM SILVER RATES IN RS./ KG.
31.03.2020 43,251 39,495
31.03.2019 31,703 37,768
31.03.2018 30,680 38,322
31.03.2017 28,950 42,211
31.03.2016 28,554 36,640
- In an economic crash, it is the worst hit sector. As it is a choice/ desire to purchase jewellery and not a necessity, purchasing jewellery & gems would be last choice of people in a weak or struggling economy.
- Nowadays, spending pattern of youth is majorly consist of travelling and vacation expenses. It is observed that people are spending their savings in various sectors, which in last decade was totally opposite. People used to save money with the aim of purchasing jewellery.
- It has been predicted that once the government imposes mandatory hallmarking of jewellery, over 2-3 lakh jewellers will be eliminated from the industry.
- Due to digitalization and strict norms, small independent jewellers across the country are constantly losing business to large multinational corporations (MNC).
- India is very much dependent on imports as there is less domestic production of jewellery. Also the supply of recycle gold in the domestic market is very low because Indian’s believe in storing physical gold into lockers.
- The Jewellery Industry faces difficulties in opting for financial facilities because of limited options. This is one of the major reason of falling of small scale jewellery businesses.
- Lack of technologic development has forced this industry to not grow on a desired rate. Also there are high rate of casualties reported by the karigars (artisans) while manufacturing jewellery, resulting in shortage of them.
- There is high fluctuation in precious metals and stones rates, due to which many people end up suffering losses.
- E-commerce evolution have significantly affected the local jewellery stores as some people choose to purchase jewellery within the comfort of their house and due to busy schedules.
- In current situation due to corona virus pandemic, two major festivals i.e. Gudi Padwa and Akshaya Tritiya which are known for potential jewellery sales have experienced ZERO sales because of nationwide lockdown. This resulted in huge loss to the country in the economic front and also to the businesses whose prime sales were dependent on these festivals.
Below listed are the major objectives of the project:
- To study and understand the buying behavior of consumers for branded and non- branded jewellery.
- To have an idea about parameters consumer consider while buying jewellery.
- To know the knowledge level of customers regarding the jewellery brands available in the market.
- To know the awareness among the consumers about purity, quality and authenticity of the jewellery.
- To know purchase behavior –
1) Occasions of purchase
2) Most preferred merchandise
3) Purchase point
4) Purity consumers look for in jewellery
5) Purchase considerations
- To know popular and most admired type of jewellery by consumers
- Identifying and understanding Cultural, Social & Psychological factors that affect consumer buying.
- Understanding the decision making process of consumer while purchasing jewellery.
- To understand how an individual customer impacts the decisions of other consumers.
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