India Gems and Jewellery Market : Trends, Opportunities & Market Solutions

India Gems and Jewellery Market: Trends and Opportunities

Introduction

The gems and jewellery industry is one of the most important sectors of the Indian economy, contributing about 7% to the GDP and employing over 5 million people. The industry is also a major source of foreign exchange earnings, accounting for about 15% of the total exports. The industry consists of various segments, such as gold, diamond, silver, platinum, and coloured gemstones, and caters to different markets, such as domestic, export, and tourism.

Market Overview

The Indian gems and jewellery market is expected to grow at a compound annual growth rate (CAGR) of 9.3% from 2020 to 2025, reaching a value of US$ 103.06 billion by 2025, according to a report by Research and Markets. The market is driven by several factors, such as rising disposable income, increasing urbanization, growing fashion consciousness, rising demand for branded and customized products, and favourable government policies. The market is also influenced by the changing preferences of consumers, who are shifting from traditional to modern and western designs, and from unorganized to organized retail channels.

Market Segmentation

The Indian gems and jewellery market can be segmented by region, product type, and distribution channel. By region, the market can be divided into North, South, East, and West. The South region dominates the market, followed by the West region. The South region is known for its high consumption of gold and diamond jewellery, while the West region is known for its exports of cut and polished diamonds. By product type, the market can be classified into gold, diamond, silver, platinum, and coloured gemstones. Gold is the most popular product type, followed by diamond. Gold is considered as a symbol of wealth, status, and auspiciousness in India, while diamond is preferred for its durability, brilliance, and value. By distribution channel, the market can be categorized into online and offline. The offline channel dominates the market, as most consumers prefer to buy jewellery from physical stores, where they can touch, feel, and verify the quality and authenticity of the products. However, the online channel is expected to grow at a faster rate, as more consumers are opting for convenience, variety, and discounts offered by e-commerce platforms.

Market Challenges

The Indian gems and jewellery market faces some challenges, such as high import duties, fluctuating gold prices, lack of standardization, and competition from synthetic and imitation products. The high import duties on gold and other precious metals increase the cost of production and reduce the competitiveness of the industry. The fluctuating gold prices affect the demand and profitability of the industry, as consumers tend to postpone or cancel their purchases when the prices are high. The lack of standardization and certification of the products leads to quality issues and consumer distrust. The competition from synthetic and imitation products, such as lab-grown diamonds and artificial jewellery, poses a threat to the industry, as they offer lower prices and similar appearance to the natural products.

Market Solutions

One of the possible solutions to overcome the challenges faced by the Indian gems and jewellery market is to adopt a standardized enterprise resource planning (ERP) system, such as Microsoft Dynamics 365 Finance and Operations (F&O). Microsoft F&O is a cloud-based ERP solution that can help the industry to streamline its operations, improve its efficiency, and enhance its customer experience. Some of the benefits of Microsoft F&O for the gems and jewellery industry are:

·        It can integrate the various processes and functions of the industry, such as procurement, inventory, production, sales, finance, and accounting, into a single platform, thereby reducing the complexity and cost of managing multiple systems.

·        It can provide real-time visibility and insights into the performance and profitability of the industry, enabling better decision making and planning.

·        It can automate and optimize the workflows and transactions of the industry, such as order management, invoicing, payment, and shipping, thereby increasing the speed and accuracy of the operations.

·        It can enable the industry to comply with the regulatory and quality standards, such as the Bureau of Indian Standards (BIS) hallmarking, the Kimberley Process Certification Scheme (KPCS), and the Goods and Services Tax (GST), by providing the necessary data and reports.

·        It can support the industry to adapt to the changing market trends and customer preferences, by offering the features of customization, personalization, and digitalization.

Another possible solution for the Indian gems and jewellery market is to upgrade to Microsoft tools for online retailing, such as Microsoft Commerce, Microsoft Dynamics 365 Customer Service, and Microsoft Dynamics 365 Marketing. These tools can help the industry to enhance its online presence, reach, and engagement, and to offer a seamless and satisfying customer journey. Some of the benefits of Microsoft tools for online retailing are:

·        They can provide a unified and consistent shopping experience across multiple channels, such as web, mobile, social media, and chatbots, by integrating the front-end and back-end systems.

·        They can enable the industry to showcase its products and services in an attractive and interactive way, by using the features of 3D visualization, augmented reality, and virtual reality.

·        They can help the industry to understand and anticipate the needs and preferences of the customers, by using the capabilities of artificial intelligence, machine learning, and analytics.

·        They can facilitate the industry to communicate and interact with the customers effectively, by using the tools of email marketing, SMS marketing, and push notifications.

·        They can assist the industry to retain and localize the customers, by offering the benefits of loyalty programs, rewards, discounts, and referrals.