(MENAFN- IANS) New Delhi, July 27 (IANS) As the Aditya Birla Group forays into branded jewellery business with an investment of Rs 5,000 crore, industry experts on Saturday said the shift towards consumers purchasing from branded retailers and upgrading to studded products will help the company cement its position in a massive over Rs 6.4 lakh crore domestic jewellery market.
The branded jewellery players ride on the huge wedding market which reached Rs 10 lakh crore in the last fiscal (FY24) in the country.
Keeping the potential growth in mind, Aditya Birla Group has entered the branded jewellery business -- dominated by the likes of Tata Group's Titan, Kalyan Jewellers and Joyalukkas, among others -- under Novel Jewels with the brand name 'Indriya'.
According to Kumar Mangalam Birla, Chairman, Aditya Birla Group, they have "redoubled their bet on the dynamism of the Indian consumer this year, by launching two major new consumer brands -- in paints and jewellery,”
He said that entering the jewellery business is compelling due to the ongoing value migration from informal to formal sectors, the rising consumer preference for strong, trusted brands, and the ever-booming wedding market, all of which present substantial growth opportunities.
The company aims to be among the top three jewellery retailers in the country over the next five years, at a compound annual growth rate (CAGR) of 50 per cent.
Experts said the increasing frequency of visits by jewellery lovers at branded stores will continue to benefit the market players over the medium term.
“Rising disposable incomes and economic growth across the parameters are other factors that will drive the jewellery market,” they added.
According to a Motilal Oswal report last month, the jewellery retail sector recorded a rapid growth in the last five years -- surging from Rs 5,04,400 crore in 2019 to Rs 6,40,000 crore in 2024 on the back of rising incomes and greater trust in the products due to hallmarking.
The report mentioned that there are multiple drivers in the industry leading to such rapid growth, driven by rising disposable income (higher per capita growth in double digits), an improving mix for regular wear (beyond weddings and investment-led), enhanced product offering (such as design and diamonds), trust-building through hallmarking, and a better buying experience at organised retail outlets.
The leading brokerage said weddings and festivals are the primary reasons for the purchase of jewellery in India.
Bridal jewelry still accounts for a significant portion of demand, contributing 55 per cent to the total demand and daily wear jewellery accounts for 30-35 per cent of the Indian jewellery market.
On the other hand, fashion jewelry contributes nearly 10 per cent to the domestic jewellery market.
To begin with, the Aditya Birla Group will open four 'Indriya' stores in Delhi, Indore and Jaipur, and aims to expand to more than 10 cities within six months company plans to offer an initial assortment of about 15,000 curated jewellery pieces with more than 5,000 exclusive designs.
Earlier this year, Aditya Birla Group entered the decorative paints business under the 'Birla Opus' brand, targeting Rs 10,000 crore in gross revenue within three years of full-scale operations.
Meanwhile, the Union Budget 2024-2025 has announced to reduce customs duty on gold and silver to 6 per cent and platinum to 6.4 per cent.
Piyush Gupta, Director at PP Jewellers by Pawan Gupta, said this reduction is a significant move that will not only make these precious metals more affordable for consumers but also provide a great boost to the jewellery industry.
Lower customs duties mean reduced costs for raw materials, enabling jewellers to offer more competitive prices and innovative designs to our customers.
"We expect this reduction to help in stimulating demand, promoting higher sales, and ultimately supporting the growth of the entire jewellery sector,” he explained.
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