Is fashion jewellery growth a threat to Indian domestic jewellery market?

01/21/2015 Expert reports

Turns out it is, as fashion makes a bigger splash with the umpteen numbers of choices it offers - in terms of design, colour, metals, etc., besides price factor. The market size for costume jewellery is currently estimated to be at Rs 12,000 crore, of which online contributes about Rs 1000 crore. This market has immense potential and is estimated to grow to Rs 14,000 crore by 2015.  The domestic online costume jewellery market, too, is estimated to grow at an enormous rate within a year to Rs 6000 crore from just around Rs 400 crore at present.

The fluctuating gold prices, mostly going north has worked in favour of costume jewellers in the country. In 2013, costume jewellers claim that they have clocked 20-30 percent growth, and look for more than 50 percent growth in current fiscal. They attribute this growth to purchases by women from affluent households going in for such jewellery for the purpose of attending weddings and parties in foreign locales and sometimes in India as well.

It is said that tough customs norms have forced women to carry costume jewellery for weddings overseas, so that they do not face any questioning while travelling back to India. But, this is because there is very little awareness among people about customs norms. People can, while leaving India, get their jewellery checked at the customs and take the authority's letter so that while returning to India they do not face any hassle. However, not all costume jewellery buyers attending wedding overseas belong to this category. The beauty and variety available in costume jewellery at a low price entices them to go in for the jewellery.

Incidentally, Indian women until recently would not be caught dead wearing costume jewellery, especially at weddings. But, this is slowly changing and the trend of matching costume jewellery with their elaborate dresses is becoming a trend of late. While the spectacular growth of the costume jewellery sector has augured well for artisans and businessmen, the flip side is not so good, especially for the gold jewellery sector. In fact, of late fashion/ costume jewellery has emerged as a major threat to the gold jewellery trade. Gold jewellery has not witnessed much of growth in recent times as prices have hit the roof due to a weak rupee. "It is true that costume jewellery is a major threat to us. We are advising jewelers to come up with 14-carat gold items to ward off this threat," said Haresh Soni, chairman, All India Gem & Jewellery Trade Federation (GJF).

To be fair to costume jewellery, because of their trendy and heavy look, women from all sections of society are attracted to them, even those from the affluent class. Most shops peddling costume jewellery claim that they can see more of the affluent women going in for coloured stone jewellery with gay abandon, as they give their dresses a good fillip on the whole final look.

“Yes, the interest among this class for costume jewellery is on the rise and they come to our shop in great numbers nowadays. Of course, this was not the case some many years ago, when they would look down upon costume jewellery and not touch them with a barge pole. Nowadays, of course it is a different story. Retailers are expecting good demand from the upper class affluent women in the upcoming festive and wedding season.

Incidentally, demand for costume jewellery is across India, including from Southern India, which is a little more conservative than the Northern part of the country. However, young girls from metros like Delhi, Mumbai, and Bangalore are more adventurous and accessorize according to their choice. Both working women as well as college going girls have a mindset that is totally fashion and accessory conscious, prefer lightweight costume jewellery. They follow the global fashion trends, the importance of looking 'fashionable' rather than looking 'rich', and the need to 'fit in' with your friends rather than looking 'ostentatious'.

Today, Indian women never hesitate to wear imitation jewellery while attending  social events, wedding ceremonies, parties or any events, because they have contemporary designs with a classic touch, bringing in the best of both worlds. Generally, costume jewellery is made of cast iron, nickel, brass, stones, plastic beads, wood, leather, etc., instead of precious metals and gems. One drawback is that fashion jewellery do not have resale value. They are available in the range of less than Rs 100 and as high as Rs 50,000, depending upon the particular piece.

The costume jewellery industry size is expected to touch Rs 15,000 crore by December 2015, according to a study conducted here  up from Rs 8,000 crore in December 2012. There is a huge export market too for costume jewellery. Demand from the US and European markets have been on the rise over the last 9-12 months in volume terms. So, the interest generated in this field is tremendous, as India is capable of manufacturing varieties of jewellery with low cost raw material available in plenty and labour is cheap too. The Indian designs are popular in countries where the Indian population is more and demand for such chunk, Indian designs are in demand throughout the year.

Gold is and will always be an emotional and investment-oriented purchase in India. But price being a major constraint, imitation jewellery, through its large canvas of raw material, offers numerous ways to phrase ones expression. This is the reason for their popularity in the Indian fashion scene. In fact, the imitation/fashion jewellery market sees a rise of nearly 85% during festivals and is growing by nearly 20% per annum. Demand from tier 1 and tier 2 towns as well as the rural market has also grown substantially over the years for costume jewellery thanks to electronic media, which showcases these costume jewellery on a daily basis.

Aruna Gaitonde, Editor in Chief of the Indian Bureau, Rough&Polished

Source: https://www.rough-polished.com/en/expertise/95069.html