Paper Title

CUSTOMER PERCEPTION TOWARDS BRANDED JEWELRY IN

INDIA

Dr. Ratna Vadra

Faculty, IMT, Ghaziabad 
&
Dr. Gunjan Malhotra,
Faculty,IMT, Ghaziabad 
 Abstract

Recent times have seen larger brands witnessing an upward swing mainly due to factors
such as increasing consumer sophistication, diminishing investment-driven purchases,
alternative retail channels and competition from other luxury products. Responding to
the changing trends, India's small, independent jewelers are starting to organize
themselves into groups of four to five players to share a common brand identity and
marketing strategy.

This paper is aim to study the very changing market scenario i.e. transition from
unorganized sector to an organized one. Moreover this paper gives us an insight into
consumer buying behavior when it comes to jewellery. The paper also studies how the
branded players are changing the perceptions and attitudes of Indian customers towards
jewellery. The analysis showed that consumers are moderately aware of the branded
players who have forayed into the jewellery market and would like to purchase branded
jewellery in the near future and still large proportion of consumers regard jewellery as
an investment. The consumers buying behavior also shows a shift from content to design
in jewellery i.e. fashionable jewellery is the rage nowadays and acquires a status symbol
in their minds. Branded jewellery players will continue to face lot of competition from
local jewellers.

Introduction

The gems and jewellery industry has an important role in the Indian economy. While a
predominant portion of gold jewellery manufactured in India is for domestic
consumption, a predominant portion of rough, uncut diamonds processed in the form of
either polished diamonds or finished diamond jewellery is exported. With an estimated
consumption of 722 tonnes during calendar year or CY2005 (including jewellery
consumption of 587 tonnes), India is the largest consumer of gold in the world.

Recent times have seen larger brands witnessing an upward swing mainly due to factors
such as increasing consumer sophistication, diminishing investment-driven purchases,
alternative retail channels and competition from other luxury products. Responding to the
changing trends, India's small, independent jewelers are starting to organize themselves
into groups of four to five players to share a common brand identity and marketing
strategy.

In order to gain marketshare, branded players will have to come up with designs that
customers want and win the trust and confidence of consumers by hallmarking and
demonstrating the purity of the gold used by them. To compete with traditional players,
branded players must also find some way to differentiate themselves. While the success
of a particular brand will depend on differentiation, affordability and quality will be a key
element in sustaining a brand. In addition, branded players require focused advertising
and astute salesmanship to compete with traditional jewelers.

Branded jewellery in India

As India makes rapid progress in the retail arena, the jewellery market is undergoing a
gradual metamorphosis from a 'storehouse of value' to a fashion accessory bazaar. Plain
gold has now given way to diamonds, platinum and colored gemstones.

Growth in the diamond industry has been remarkable. According to industry estimates,
the gem industry is growing at 20 per cent annually and currently stands at US$ 3.6
billion. India is also a big export hub for processing diamonds and other precious stones.

The two major segments of the sector in India are gold jewellery and diamonds. India is
the world’s largest gold jewellery market by volume accounting for around 590 tonnes of
consumption demand in 2005. Traditionally gold is 22 carat. Gold jewellery forms
around 80 per cent of the Indian jewellery market, with the balance comprising fabricated
studded jewellery that includes diamond as well as gemstone studded jewellery. Gold
jewellery and colored gem segments account for about 15 per cent and 5 per cent,
respectively of India's gems and jewellery export in value terms.

The largest cutting and polishing centre of diamonds in the world both in terms of
quantity and value, the Indian gems and jewellery sector contributed to about 15 per cent
of India's total merchandise exports during 2005-06. And in 2006-07, it accounted for
13.7 per cent of the country's total merchandise exports.

In terms of carat, India's share in this sector is about 80 per cent of the world market.
India produces 60 per cent of the world's polished diamond market by value, 82 per cent
by carats and 95 per cent by number of pieces.

According to the Gems and Jewellery Export Promotion Council (GJEPC), the total
exports of the industry for the fiscal year 2006-07 were US$ 17,101.77 million as against
US$16,646.04 million in 2005-06, showing a growth rate of 2.74 per cent over the
previous fiscal year. The current fiscal witnessed an impressive growth of 10.86 per cent.

India's 300,000 traditional jewellers – commonly referred to as the unorganized sector –

dominate the country's jewellery retail landscape with a 96 per cent market-share, while
large brands or organized retail form only 4 per cent of the overall market.

But in recent times larger brands have been witnessing an upward swing mainly due to
factors such as increasing consumer sophistication, diminishing investment-driven
purchases, alternative retail channels and competition from other luxury products.

Responding to the changing trends, India's small, independent jewelers are starting to
organize themselves into groups of four to five players to share a common brand identity
and marketing strategy.

Major Players in the market

Major players for branded jewellery in the market are ASMI, EROS, TANISHQ,
SOLITIARE, SIGNATURE, GILI, AGNI, KIAH etc. Of late, some of the world's biggest
names in the jewellery and luxury items such as watches and cuff-links are making
inquiries to set up shop in India. Multi-national jewellery brands such as Tiffany, Cartier,
Zales and Harry Winston are all said to be interested in coming here following the
Government's decision to allow foreign direct investment of up to 51 per cent in single
brand retail stores. Most of these stores have been sourcing cut and polished diamond and
gold items from Indian firms. Now they are making inquiries for possible tie-ups in India.

Simultaneously, domestic players are also drawing aggressive plans

• Shrenuj & Company Ltd has acquired 84.6 per cent stake in the US-based
jewellery distributor Simon Golub & Sons Inc for US$ 22.7 million.
• Kerala-based jeweller Malabar Gold will spend US$ 48 million over the next year
in order to expand its presence in southern India as well as abroad.
• Gitanjali Gems Ltd, a Mumbai-based jeweller, has incorporated a wholly-owned
subsidiary in Dubai, Gitanjali Ventures DMCC, whose main activity is trading in
diamonds, precious stones, diamond jewellery and pearls.
• Also, the Gitanjali Group has announced its foray into the luxury retail market
through a new entity ‘Luxury Connexions'. The company will invest US$ 24.5
million over three years to set up luxury malls in eight leading cities across the
country.

Two new special economic zones (SEZs) for gems and jewellery are to come up at
Goregaon and Dhulia, both in Maharashtra. Also, the state-run Minerals and Metals
Trading Corp. (MMTC), plans to establish a gems and jewellery special economic zone
(SEZ) in partnership with a private company.

Key factors influencing the jewellery retail scenario in India.

• Diamond jewellery now is not restricted to just occasions like marriage but
extends to all modern day occasions like Valentines day, Mother’s day,
Father’s day, Karva Chauth etc. All brands are targeting on the emotional
bonds of human relationships and promoting the same accordingly, thus
giving retailing jewellery in India a major boost.
• There is a marked shift in the consumer’s preferences and aspirations from
goldjewellery to diamond jewellery which is fuelled by media hype and
exposure to lifestyle and luxury products.
• With more women working in today’s scenario the positioning of diamond
jewellery as 9 to 5 wearable jewellery has increased emphasis on thissegment.
This is further fueled by the fact that with the number of double income
households increasing this has resulted in more disposable incomes being
available.
• With more and more players being introduced in the branded jewellery
segment there is an onslaught of schemes and promotions on diamond
jewellery round the year, which gives retail a great push.
• Each brand offers value added services like certification of gold and
diamonds, life time return /buy back schemes, zero interest installments
schemes which have made the diamond jewellery more affordable than its
perceived traditional image of being expensive, thereby increasing
consumption.
• To further strengthen the retail segment, most brands are getting into
departmentalstores, hypermarkets, supermarkets and specialty stores. Western
style malls have begun appearing in metros and smaller cities alike,
introducing the Indian consumer to a shopping experience like never before.
Besides the franchise route the counters in most malls is another route that
most of the brands are getting into which helps create a better reach of the
product.
• The opening of a number of exclusive franchise outlets, not only can provide
the entire range of jewellery under one roof but create an ambience to give
consumers a total shopping experience.
• Consumers are moving slowly away from contemporary jewelry to designer
wear. They have also become very quality conscious. The Indian consumer is
well traveled, and is exposed to the international shopping experience, and not
only commands the same, but receives it too in India.
• Jewellery buying is no longer confined to seasonal cycles of marriages, and
Diwali and Christmas: anytime is a fine time, and jewellery can be bought as
much to express an emotion, as to proclaim the financial status of the wearer.
• Men from metros are also donning jewellery, over and above the traditional
wedding rings and chains.

Methodology

The study is based on primary data collected from market as well as through
online survey techniques. The research technique adopted was a questionnaire
method. The non random sampling technique i.e. convenience sampling method
was adopted to collect information from around 140 people selected at random
from various age groups and income brackets. After this we did the editing and
coding of the responses received by these customers and found that only 100
customer’s responses were useful for our study. Thus the other 40 responses were
eliminated from further analysis.

The central statistical techniques like mean, median and mode are used to find out
the common perception or general liking of the consumers towards branded
jewelry. In order to analyze the factors affecting the consumer behavior towards
branded jewelry we have used multiple linear regression equations. Also to find
the impact of different seasons on the purchase of a branded jewelry, we have
tried to analyze the time period during which the jewelry is preferred more by the
customers.

Analysis

Through our analysis and observation techniques of the customers responses we

find that following are the major factors which influence customer’s to buy a
branded jewelry.

1. Risk in approaching the branded stores rather than old family jeweler’s
 Jewelry market has recently become an organized sector. Many new
brands have entered the market giving tough competition to the unorganized
sectors and especially to old family jewelers. Through the responses received we
can conclude that the customer is aware about the new brands launched in the
market. They believe that it’s worth buying from these branded shops once in a
while probably because of the quality and to a certain extent price of the jewelry.
The changing scenario of people’s perception towards branded jewelry is shown
in graph 1.

Graph 1: Depicting customer’s perception to move towards branded jewelry

stores
 2. Media influence on customer’s preference towards branded jewelry

  We tried to depict if media plays any role in changing the perception of the Indian
buyer’s to buy branded jewelry at any point of time (Graph 2). We find through our
survey that Television plays the key role in creating awareness and educating customers
on different brands available in the market. Almost 58% of the respondent’s show that they
are severely motivated by television media, followed by newspapers (39%), internet (17%),
friends and relatives (14%), billboards (11%), radio (10%). Thus we can conclude
that television is the prime factor which helps customer’s recall the brand while
actually being in the market and thus their purchases at times are motivated by this
clear winner of media advertisement.

Graph 2: Share of various Media influence to promote branded jewellery

3. Seasonality implications towards branded jewellery

From our analysis we can state that demand of jewellery is highly influenced by
the seasonal variations (Graph 3). The fourth quarter of the year is most powerful
period during which maximum of jewellery is bought by the consumer’s. This
may because during this period various festivals like Diwali, Christmas, Eid take
place and consumers find it most favourable to give branded jewellery as a token
of gift. The second strongest quarter from our analysis is found to be the first
quarter of the year probably due to the Chinese New Year, the Indian wedding
season and, to a lesser extent, Valentine’s day. The second and third quarters are
usually seasonally low with a relative absence of major gold giving occasions.

Graph 3: Seasonality impact towards branded jewellery

4. Influence of resale value, availability and status while purchasing jewellery

On detailed analysis of the data collected we come to know that the decision to
purchase jewellery is dependent on resale value ( Average Likert Scale value =
3.679). This shows that most of the people in India still considers jewellery as an
investment. Another strong influence is the availability of the outlets which complies
that people prefer to buy jewellery from the stores which are in their vicinity
( Average Likert Scale Value = 3.10). On questioning people about the status
symbol, the data reveals that it has a strong influence on people’s decision to buy
jewellery ( Average Likert Scale value = 3.86).

Thus, based on the data it can be fairly concluded that factors like resale value,
availability and status have a strong influence on people’s decision making process.

5. Few factors which might get ignored but play a significant role
According to the data collected in the survey we conclude that pleasant environment
while shopping is important from consumer’s point of view ( Average likert scale
value = 4.32 ). Price , as everywhere has been the most significant factor to check
upon. Thus, the dealers should have competitive prices and should only offer that
much consumer service and satisfaction where they find it difficult to sell at par with
the market in terms of price.

Some pictorial representations of important data collected are

A) Tanishq
B) Asmi
C) Nakshatra
D) Aura
E) Agni
F) Gili
G) Solitaire
H) DeBeers
I) DDamas
J) Sangini
K) Other
Conclusion

In India, brands are required as no one shop alone can do advertising due to lack of
resources. Today, there are more than 50 brands in the Indian market. For brands the right
approach is to have a continual revitalization of the brand and its position within the
market. Branding commands a premium price but it has to be justified. The consumers
buying behavior shows a shift from content to design in jewellery i.e. fashionable
jewellery is the rage nowadays and acquires a status symbol in their minds.Branded
jewellery players will continue to face lot of competition from local jewellers.

With companies like Bulgari and Gucci’s bold communication, keen competition within
the jewellery sector is increasing. Luxury brands have entered the jewellery market with
clear strategies to reach the final consumer. The distribution by luxury brands is also very
good. Competition now is for jewellery as an accessory rather than as a jewel. For those
who want to venture into branding and retailing in India, the 7 ‘E’s’ of brand marketing
strategy are recommended for the new jewellery retail environment.

References

1. Buchanan, Norma, “Branded Jewelry Grow Into a Viable Market” Publication:

National Jeweler ,Wednesday, December 4 1996

2. 2. Choksi,Mehul Chairman & CEO, Gitanjali Group, Branding and marketing

in new jewellery retail environment

3. Gogna , Amul ,”The Indian Gems and Jewellery Sector.

4. Nigam, Vineet, “National Diamond Strategy; Diamond retail “Assistant General

Manager, ICRA, Executive Director, ICRA

5. Bhatt, Harish COO Tanishq,” Growing the branded jewellery market: An Indian
Experience”

6. http://www.icmr.icfai/casestudies/

7. www.financialexpress.com/news/Gems-and-jewellery-industry-keen-to-build-brand-
equity

8. www.jewellery.indianetzone.com/1/branded_jewellery.htm

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11. www.gjepc.org/gjepc
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13. www.allbusiness.com/retail-trade/apparel