Diamond Gems And Jewellery Industry Commerce Essay

diamond Gems And Jewellery Industry Commerce EssayThe Indian Gem and Jewellery sphere of influence is one of the most active and fast upward(a) vault of heavens of the Indian Economy. The gems and jewelry sector in India is unroganised and disjointed. Around 90% of the players operate in the unincorporated sector. This was a single step in an industry where conventional business purlieu exists. The companys operations ar general in scope and global in spread c all over all facets of diamond and jewellery force and trading in rough and fancify stones, at all key locations worldwide.The Indian gems and jewellery sector is pre-dominently needy on the US merchandises, which is its top trade target. This research comprised of activities like listing down various agencies like manufacturers, distributors, etc and too chambers and libraries like the Indian business chambers and ne cardinalrk with them in vow to gather prototypical hand information.ball field jewellery is inc reasingly serving as a fashion statement for the rich to differentiate themselves from others wearing traditional jewellery gold jewellery. The macro environment includes all relevant focus outside a companys limits applicable in thesense that they be important enough to pretend brought on the decision. An industry finally makes to the highest degree its business model andstrategy.Gems and Jewellery is an important rising sector in the Indian Economy. Ranked among the fastest ripening sectors, it is overly a leading sector for foreign exchange generation.The gems and jewellery industry is genuinely much interesting being usually exciting and in the beginning modern. This business employees and engages zillions cover wide activities such as new(a) material procurement from far flung Africa, Australia, Canada and Russia, and transforming these into products in assume with the skills available in China, India, Italy and Turkey for the smart markets in the USA, Europe, Far e astside, middle(a) East and Asia.TABLE OF CONTENTPreface 4Acknowledgement 5Exe diagonalive summary 6Sr. noneParticularPg no.1Growth and evolution of diamond, gems and jewellery industry in India.82Product profile93 pack determination of the industry124Players in the diamond, gems and jewellery industry135Distribution channel in the industry sector166Key issues and current curls207PESTEL analysis23Growth and evolution of diamond, gems, and jewellery industryThe Indian Gem Jewellery sector is one of the most active and fast maturement sectors of the Indian Economy. The fact that India is the worlds largest source for trained, skilled and adaptive manpower along with liberalised government policies that provide a helpful environment for joint businesses, is what contributes to the continuous growth of this sector. causal around 19% to the overall Forex kitty of the country, the industrys growth over the days,Set-up in 1966, the GJEPC has over the years effectively moulded the a ttach efforts of individual tradeers to make the gem and jewellery sector a powerful engine driving Indias export-led growth. This height body of the gem jewellery industry has played a major role in the evolution of the Indian gem and jewellery industry to its present stature.From being the worlds largest manufacturer of cut and gauzy diamonds to becoming the leading international trading center, Indias gems and jewellery sector is now set on a growth way. The exports grew by 38% to $14,329.23 million for January-December 2004 period as compared to $10,392.83 million in the related period the last year. GJEPC aims to boost exports of gems and jewellery to US $20 billion by 2007 and develop India as the only one-stop-shop for gems and jewellery. Also, on the anvil is the Bharat Diamond Bourse, one of the largest monoliths ever to be built in Asia. The Bharat Diamond Bourse is an urban conglomerate of place, people and activities pertaining to diamond trading. build to provide wo rld-class facilities to the members of the Indian diamond community, the compound aims to enhance the already largest position of the Indian diamond industry in the world market carrefour PROFILEGILIGili jewellery is broad(prenominal) quality, fine break offed, machine- do, branded, diamond- constellate, designer jewellery including pendants, earrings, rings and bracelets in 18k gold studded with small, well-cut, good quality diamonds, as matching sets or by themselves. The average sale price is around Rs.15, 000. injury ValuesGilis brand values are genuine diamond and gold jewellery at reasonable prices. The Brand personality is toilsome, animated, competent, confident, extrovert, self made, successful and reliable.NoteworthyGili was the brand that in India important Valentines Day to the run into from it being just another date on the calendar. First jewellery brand from India to deviateicipate in Basel 2000, the Worlds biggest jewellery and watches show held in Switzerland. In September 2011, M/s Brand pay PLC (UK) valued Gili at rs 1018 crores.NakshatraNakshatra is a circular cluster comprised six to nine stones, with the central stone larger than the stones close it, signifying a constellation. It is a modern, fashionable interlingual rendition of the traditional seven-stone Thodu and the Kuda Jodi jewellery, which are traditional Indian floral designs. The combination of traditional charisma and current style helped it gain acceptance with women across age groups.Brand ValuesOvert Nakshatra brand values include beauty, radiance, class, elegance and quality. Amongst the symbolic values are femininity, celestial splend our and unknown. Each design is a stylized description of the basic traditional kudajodi which is believed to be positive, showering the wearer with blessings and good luck.NoteworthyThe Nakshatra design is the only one to induce general appeal amongst women across India. The diamonds used to make up the Nakshatra cluster were forme d over 800 million years ago. In September 2011, M/s BrandFinance PLC (UK) valued Nakshatra at Rs. 1,014 crores.ASMIThe design styling for the Asmi jewellery has always been that of wavy forms around a central rock of and above 5 points. It rightly personifies the woman of today and her inner fire. Asmi has under its support a range of typical, current yet reasonable designs in diamond jewellery.Brand ValuesFrom the outset, Asmi has aimed to fulfil every womans instinctive need for self-expression, and has lauded the Indian womans middle fire. Asmi is a brand that is for the woman of will, commemorating her success and inspiring her to achieve higher(prenominal) goals. It is an expression of the power of femaleness, indication of self-confidence, feelings and the middle spirit of a woman. The brand is also promoted as one that offers validity, Affordability expediency.NoteworthyA particular annual promotional event has always been organized on Womans Day, as the most suitable func tion to support and repeat the values and identity of the brand. In 2009, in association with FICCI Ladies Organisation, and an NGO- Fight Back, Asmi launched its Shakti Torch movement on the event of Womens Day 2009, to combat the paradox of municipal violence in India. In September 2011, M/s Brand Finance PLC (UK) valued Asmi at Rs. 406 croresDDAMASDdamas has several sub-brands, each single in positioning gift. The brand also has items in all categories-rings, earrings, nose pins, pendants, bangles, bracelets, necklaces, Tanmanya, Mangalsutra, half sets and full sets. Each sub-brand under Ddamas offers stylized and fashionable designs, conceptualized and produced by an in-house team of allocate winning designers. Ddamas is perhaps the only jewellery brand that has offerings in virtually all product categories, across all price points, for all occasions and emotions, thereof covering consumers across age-groups and demographic classes.Brand ValuesDdamas embodies luxury and hig h aspiration, bestowing on the wearer an aura of exclusivity and modification. The vast variety of associated brands allows every customer a resource of jewellery to mirror her personality, tastes and to suit every time. there is gold and diamond studded jewellery matching various lifestyles, occasions and price points that cater to assorted customers. Ddamas is committed to the highest levels of customer satisfaction. Every piece of jewellery comes with a special certificate of validity that assures of both the diamond and the gold content in the piece. Ddamas jewellery is fully hallmarked and accompanied with a diamond certificate from IGI.NoteworthyBest Jewellery Designs- JCK and Vivah a Gold Jewellery In September 2011, M/s Brand Finance PLC (UK) valued Ddamas at Rs. 331 crores.Demand driver of diamond jewelleryThe demand drivers for the diamond processing and jewellery sector are as below Increasing acceptability of diamond jewellery in the domestic market Traditionally, je wellery in India has master(prenominal)ly been gold jewellery. Diamond jewellery is lesser accepted in India repayable to factors such as myths associated with diamonds being unlucky in certain instances and the higher cost of diamonds. This is now changing with an plusd acceptance of diamond jewellery in the domestic market. Diamond as a fashion statement for the affluent Diamond jewellery is increasingly serving as a method statement for the rich to differentiate themselves from others wearing traditional jewellery/gold jewellery. Increasing affordability Employment of women in the workforce has been increasing due to the changing mindsets and increasing education levels among women. This has resulted in women having more impact on the buy decisions and women having also started purchasing jewellery for themselves as against earlier manners of jewellery purchase being primarily a family decision. Increased disposable income for working couples and lifestyle changes have aided this. Exports as a driver As seen earlier, exports have been growing year-on-year and the 5 year CAGR (2002-03 to 2007-08) is about 13%. India currently produces around 95% of the worlds cut and dressed diamond pieces. By carat weight, India is projected to process 80% Demand Drivers of Value addition from processing to jewellery Though India processes a large number of Diamonds most of them are re-exported after polishing. There exists scope to increase value addition by means of setting into jewellery (jewellery manufacture).MAJOR PLAYERS Gitanjali Group The Gitanjali Group was founded as a single company neat and polishing diamonds for the jewellery operate at Surat, Gujarat, in 1966. It has become a found among major diamond and jewellery houses. The Group has dumped jewellery trade convention by initiation multiple brands for multiple markets and price segments brands include Nakshatra, Ddamas, Collection, Asmi, Sangini and Gili. It opened up distribution via superstores, department stores and other retail outlets at MRP, supported by international certifications of in principle tested clarity and validity, across India and in the worlds jewellery capitals. Operations of the Gitanjali Group span the world, all the way from USA, UK, Belgium, Italy and the Middle East to Thailand, South East Asia China, and Japan. Su-Raj Diamonds Jewellery Ltd. Su-Raj is resulting from contraction of cardinal names viz. Suresh and Rajnikant, the founders of Su-Raj Group in the early Sixties. The company on hand its bundles to the public in the year 1986 and became the first company in the industry to opt for public issue in India. This was a single step in an industry where traditional business environment exists. The companys operations are universal in scope and global in increase top all facets of diamond and jewellery manufacture and trading in rough and polished stones, at all key locations universal. Suashish Diamonds Ltd. Suashish Diamonds Ltd was incorporat ed in October 1988. Suashish is single in the diamond industry as it is one of the few players that have activities across value kitchen range there by retaining higher margins. Its business activities include sourcing ofrough diamonds to transmiting finished diamond jewellery through its retail jewellery brand Ishis. Suashish has employed cutting border technology throughout its diamond and jewellery manufacturing processes. It has subsidiaries and intentional partnerships in all major markets. Shrenuj Co. Ltd. Shrenuj Company Limited and its subsidiaries ask on in the manufacture and sale of diamonds and jewellery in India and internationally. The company operates in two segments, Diamonds and Jewellery. The Diamonds segment engages in cutting and polishing of diamonds. This segment offers polished diamonds in full cut and single cut rounds, as well as in fancy shapes, such as princess, baguettes, marquise, pear, oval, emerald, and heart in various colours and clarities. The Jewellery segment provides diamond Human Resource and Skill Requirements in the Gems and Jewellery Industry studded gold/platinum jewellery. The company was founded in 1906, is based in Mumbai, India and employs about 3,000 employees. Tanishq Tanishq is one of Indias principal jewellery brands. Started in 1995, Tanishq is the jewellery business of Titan Industries Ltd promoted by the TATA group. Tanishq has set up production and sourcing bases with through research of the jewellery crafts of India. Tanishq today is Indias most aspirational fine jewellery brand with 91 stores in 64 cities, with an exquisite range of gold jewellery studded with diamonds or coloured gems and a wide range of equally amazing jewellery in 22Kt pure gold. Exquisite platinum jewellery is also part of the product range diamond Gems and JewelleryGitanjali GroupShrenuj CompanySuraj Diamonds and Jewellery LimitedRajesh ExportsAsian StarTitan Industries (Tanishq into sell), BangaloreSuashish DiamondRosy BlueB. VijaykumarLaxmi DiamondK GirdharilalC. Mehendra ExportsJ.B BrothersTara UltimoVaibhav Gems, JaipurSheetal ManufacturingMajor playersCompaniesMarket cap (rs in crore)Shree Gan. Jew720Goldiam intl.75SRS589Thangamayil jew.434Renaissance jew.135Shrenuj co489C.mahendra exp476Gitanjali gems4479Titan inds27184Rajesh exports3719Goenka diamond921Tbz1813Classic diamond16Kanani inds.360Winsome diamonds346Vaibhav global278Key Issues of the SectorUn arrange SectorThe gems and jewellery sector in India is nonunionised and opening. Around 90% of the players operate in the unorganised sector mostly in family-run operations. The nature of the sector prevents it from achieving economies of scale. Also, being largely unorganised, the sector mainly uses labour-intensive and original technology that fall upons their growth projection. Further, the sector finds it difficult to add to their global competitiveness due to difficulties in adopting technology as a result of poor financial capital and hig h labour cost per unit.Threat from ChinaCurrently, China is the second-largest diamond processing centre in the world after India however, it is slowly communicable up and is bullying to displace the Indian gems and jewellery sector from its dominant position in the world. The labour cost in China is the lowest, just like in India however, the gap between the two countries is narrowing slowly. Besides, the Chinese sparing is growing fast and is creating a demand for gems and jewellery in the domestic market. Further, many diamond manufacturers from Belgium and Israel are setting up manufacturing plants in China. India also faces gamble from China in terms of knowledge adoption, which allows China to process diamonds at a more competitive price.Predominance of the US marketThe Indian gems and jewellery sector is pre-dominently dependent on the US market, which is its top export destination. The growth of gems and jewellery sector is closely dependent on the growth of demand in the US market. However, the recent appreciation of the rupee in relation to the US dollar and a slowing of the US economy have forced the concerns for the sector. All these factors need Indias venture into other geographical locations. During FY07, the exports to the US market registered a growth of 14% over exports of FY06 however, owing to the slowdown in the US economy, the exports grew only 1.15% in FY08 over the previous year. In the current situation the heavy dependence on the US market has touch on the exporters as they are facing a drop in orders and delayed payments.Exchange Rate/Currency RiskThe gems and jewellery sector is affect by the rupee/dollar exchange rate because it is export-oriented. Any instability in the exchange rates affects the margins of the players. For instance, the recent approval in the rupee against the dollar had made the exports of gems and jewellery less competitive in its key export destinations.High Level of InventoriesAs the gems and jewellery se ctor is highly dependent on imports for its raw materials, the players have to maintain a high level of inventory. However, maintaining this inventory becomes difficult for the players during the drooping season, as it carries inventory price riskiness. For instance, due to the current recessionary trends, the demand drooping and inventory piled up much to the chagrin of the players.Decreasing Diamond ReservesThe supply of rough diamonds is likely to fall in the near next as the diamond reserves are decreasing. There has been no major diamond keep discovery since 2003, when assets were last discovered in the Diavik Diamond mine in Canada. The complete supply will push up the prices of rough diamonds, which will further put pressure on margins. Future supply levels are largely needy on the industrys ability to identify new diamond deposits.Competition from Other Luxury GoodsWith the increase in disposable income and the change in standard of living, the demand for luxury goods such as perfumes, consumer electronics, leather, automobile, gadgets etc are also increasing. The gems and jewellery sector is experience competition from these luxury goods, which is eating into the market share of the division.Beneficiation in Mining CountriesIndia is facing a menace from the emerging cutting and polishing centres in the diamond-producing countries such as South Africa, Ghana, Angola, Botswana, Namibia etc. The local government is increasingly pressurising the African countries for processing locally-mined materials such as diamonds within the country itself to increase earnings through value addition to the vast natural resources that these countries possess. South Africa has launched a draft Beneficiation Strategy for the minerals industry of South Africa in March 2009. The newly-formed African Diamond Producers Association (ADPA) is advocating establishing a joint polity that would support beneficiation across Africa. This could lead to fewer rough goods being m ade available on the open market and in creating a threat to the existing diamond processing centres such as India, as new processing centres comes up.Global Economic SlowdownThe global economic slowdown has come upon the Indian gems and jewellery division hard. As the sector was primarily dependent on exports to the US and European countries, the meltdown in these countries affected the gems and jewellery sector to a great extent. The players faced issues relating to inventory build-up and liquidity pressure. A number of diamond units in Gujarat were shut down that render thousands of workers jobless. Further, the bank finance, which was largely in dollar terms, also faced a delay due to foreign exchange rate fluctuations. This further added to the woes of the players who were full to come out of the global depression. unconstipated though the sector is in the recovery mode, owing to a gradual recovery of global markets, the credit cycle of the sector has changed severely. The del ayed payments from customers have raise the interest outflows for the companies.Synthetic DiamondsThe sector also faces a face in the form of integration of artificial or man-made diamonds. With the start of technology, it is difficult to discriminate between natural and synthetic diamonds. It may so happen that the imitation diamonds are accepted on as real diamonds and in the long run, this could affect the authority of the sector. Further, as unreal diamonds are much cheaper and identical to the synthetic diamonds, these diamonds may find customers that is a reserve to the natural diamond and may finish positive eating into the market share of the diamond industry.Issue of difference DiamondsIndia is the largest importer of rough diamonds and a leading player in cutting and polishing of the same, therefore, it runs the risk of dealing with conflict diamonds. Conflict diamonds are those that are mined illegally in African countries such as Angola, Liberia, Sierra Leone and the De mocratic nation of congou to fund illegal military wars. In spite of the KP certification, there an issue related to fake KP certificate. These fake certificates put diamond importing countries at a risk of dealing in variance diamonds.Opportunities for the SectorEntering New MarketsThe US has been the major market for Indian gems and jewellery sector over the years. However, with the current global delay, the dependence on the US market has unnatural the Indian gems and jewellery sector tremendously. The sector is exploring new locations to vary business and to minimise the risk. Russia, Middle East and China are few of the rising destinations that are witnessing an increase in jewellery demand. The Indian gems and jewellery players can tap these countries to diversify and increase their business.Cutting and Polishing of Large-Sized DiamondsIndia is one of the leading diamond processing centers of the world. Indias vast, low cost and very skilled workforce provides it with a compet itive edge over other countries. However, it is largely involved in cutting and polishing of small-sized diamonds, which weigh less than one carat. Indias cut and polished diamond exports have a high universal share in terms of number of pieces however, in terms of value the share is much lower. By moving up the value chain and processing larger stones India can further increase its value share in total exports. Large diamonds are less generally set up in nature. Therefore, the price of a diamond rises exponentially with its size. Indian exporters who have authority in processing of small stones have already started moving into cutting of large and medium size stones. For moving up the value chain, the industry should try forward and backward integration. Hence strategic alliances with producers of roughs and retailers of jewellery could lead to higher market share.Given Indias low cost and skill labours, there exists an chance for processing large stones, which will provide the pla yers with higher margins as well as rise in realisations on capex.Value AdditionThere exists a huge chance for Indian players to do value addition to the processed diamonds and to export diamond studded jewellery. India is already a leader in processing small-sized diamonds and it also has natural capabilities of manufacturing hand-crafted jewellery. Further, with its dominance in processing small diamonds, India has an favour of manufacturing reasonable diamond jewellery for the world market.Jewellery RetailThe Indian retail sector is increasing fast. This provides an excellent chance for the Indian players to manufacture and sell their jewellery through the retail channels that are fast catching up in the Indian markets. Further, this move will also provide an organised structure to the largely unorganised gems and jewellery sector and lead to further growth of the sector.Outsourcing coreIndia can become an outsourcing hub for design and manufacturing jewellery. There is an incre ased trend of outsourcing design with manufacturing of jewellery from India by global retail players such as Wal-mart and JC Penny. The players in the area can tap this opportunity to expand business, reduce risk and increase revenues.View pointThe vision for the gem and jewellery sector is positive. On account of the global recovery, the Indian gems and jewellery sector is also on a recovery mode. In December 2009, the exports from the sector grow by 45.35% as compared with the same period in 2008. According to GJEPC, the players received good orders for Christmas in 2009, which indicates a slow recovery for the sector. The positive trend is expected to continue, as major economies are showing signs of recovery, which is resulting in fresh orders for the sector.Further, the gems and jewellery sector is also expected to grow in the domestic market, going forward. As the per capita consumption of jewellery is low in India, there exists an attractive opportunity to tap the domestic ma rket.ANALYSIS EVALUATION OF DISTRIBUTION CHANNELS IN VARIOUS SECTORSThe project involved analyzing and evaluating distribution channels of various companies belonging to sector.1. Precious and semi uncommon stones,2. White goods,3. Cement,4. FMCGMethodology This research comprised of activities like listing down various agencies like manufacturers, distributors, etc and also chambers and libraries like the Indian merchant chambers and interacting with them in order to collect first hand information.PRECIOUS AND SEMI PRECIOUS STONESThe Indian Gems and Jewellery industry is an age old industry and comprises mainly of two types of markets, viz the controlled sector and the unorganized sector. The organized sector with celebrated jewelers, Public Sector Units (PSUs), etc forms only 10% of the loved and semi-precious stones market, whereas, the unorganized sector forms 90% of the gems and jewellery market in India. The unorganized sector employs around 1.5 million workers serving over 0.1 million gold jewelers and over 8000 diamond jewelers. Precious and semi-precious stones industry is a main earner of foreign exchange. This sector contributes around 17% of Indias exports. The bulk of the Indian gems and jewellery exports comprise imports of rough diamonds, cutting and polishing in India, and re-exports. Cut and dainty Diamonds (CPD) and gold Jewellery account for nearly 95% of Indias gems and jewellery exports. India is the worlds leading diamond cutting and polishing center, accounting for 53% share of the global polished diamond market in terms of value. India imports gold from South Africa, Switzerland, Australia, Hong Kong and UAE.The domestic consumption of diamonds have been 626.9 crores in 2001-02 to 483.4 crores in02-03 and reached and all time high of 1771.3 crores in 2003-04 and the trend has continued in 2004-05 as well. The market size has also witness a rise of around 10% in 2003-04 over 2002-03. The value of domestic sales has been 7200 crores, 7400 crores and 7650 crores in 01-02, 02-03 03-04 respectively. Exports of cut and polished diamonds has been 5892, 7385 and 8240 million dollars in 01- 02, 02-03 03-04 respectively, whereas, exports of Jewellery studded with diamonds has been 553, 719 and 934 million dollars in 01-02, 02-03 03-04 respectively.Consumer Demographics Buying Patterns of Indian ConsumersThere is a very high consumption in the western and the northern markets of India, viz, Mumbai and New Delhi, New Delhi being the head. In India, the purchase of Jewellery is quite regular and occasion driven. There is a higher consumption during festivals like Diwali, Dassera, Ganesh Chaturthi, etc. and also during the marriage season, which is spread from November to March.Mechanics of Distribution Channels of SectorSince precious and semi precious stones industry is divided into organized and unorganized sector, the mechanics of the distribution channels of the players belonging to these sectors has also been diff erent. Nationally, the branded jewelers of the organized sector cater to the consumers via a 1 or a 2 level supply chain which comprise of either only franchise retail outlets and other retails or wholesalers and then retailers. The players of the unorganized sector, on the other hand, either plainly sell their manufactured products to retailers or have branch offices in cities where the products are transferred and sold to end consumers or to retailers in the particular city.Web www.beemanagement.comEmail emailprotectedWeb www.astrategies.comEmail emailprotectedDecember 2005 Copyright 2005 Bee Management Consultancy Pvt. Ltd. 2 Raw diamonds and other Jewellery is imported from sources, manufactured and polished here and either shipped or transported by air to the final destination In exported countries the products are either transferred to retailers who are clients or to branch office who in turn sell it to the retailers. Whether domestic sales or exports overall, the levels of m ediators in the gems and Jewellery industry do not really exceed 2 to 3 levels.This continue contains detailed analysis of renowned Gems and Jewellery companies.The PESTEL analysisThe macro environment includes all relevant focus outside a companys margins relevant in thesense that they are important enough to have brought on the decision. A business finally makes about its business model andstrategy. Companys strategy may be needed for solvent it. Micro environment includes all general force that does not directlytouch onthe shortrun activitiesof theorganization butthat canand a great dealdoes,in dulgenceits also ran decisions.Political Factors-The Government of India (GoI) has been working to develop the Diamond industry in India through several initiatives but under the purview of Diamond industry. The main political factors are as follows.Excise duty In the budget of year 2008-09 government decrease excise duty from 10% to 5% on cut and polished diamond units.Marketingandcontro lordersImportofroughdiamondsillegalbythe Jewellryexport Promotion Councils .The Council provides market information to its members about foreign trade inquiries, trade and tariff regulations, rates of import duties, and information about Diamond fair and exhibitions.FDI approva