Aditya Birla Group’s Novel Jewels set to take on Tata’s Tanishq

Billionaire Kumar Mangalam Birla-led Aditya Birla Group is taking on the Tata Group by foraying into the nearly $60-billion gold jewellery retail market in India as the sector transitions from being largely unorganised into an organised business.  

The conglomerate announced a new branded jewellery retail venture called ‘Novel Jewels’ on Tuesday at an investment of around Rs 5,000 crore. This will include large-format exclusive jewellery retail stores across India with in-house jewellery brands.  

The Indian domestic jewellery market’s size is estimated at $57 billion as of FY22 and is expected to grow to $91 billion by 2025, according to Technopak Analysis from March 2022.  

The conglomerate, which has been building up its fashion and apparel retail business Aditya Birla Fashion and Retail Limited with a string of mass and luxury brand acquisitions since 2019, is expanding its consumer businesses further with the entry into gold jewellery. “This foray is a strategic portfolio choice that allows us to tap into new growth engines and expand our presence in the vibrant Indian consumer landscape,” Kumar Mangalam Birla, Chairman, Aditya Birla Group, said. 

The Indian domestic jewellery market is largely unorganised, with organised retail’s share at approximately 35% last year, comprising both national and regional players, according to the Technopak report. It is led by Tanishq from the Tata Group, while the top five companies contribute 15% of the overall market size. In terms of exclusive branded outlets’ footprint, the market leaders include Tanishq, PC Jeweller, Malabar Gold, Senco Gold and Kalyan Jewellers. 

More than 500,000 local goldsmiths and jewellers comprise the large unorganised segment in India which is estimated at 65%. But by 2025, the organised market is expected to grow to 40%. 

“Jewellery is a trust and design driven business, versus fashion which is primarily design driven. Brand creation takes much longer than other discretionary categories. From that backdrop, expecting any impact on Titan Company (of which Tanishq is a part) at this stage would be too soon,” says Abneesh Roy, Executive Director at Nuvama Institutional Equities. 

The Technopak report states that Indian jewellery demand is heterogeneous and is influenced by strong regional preferences, with the southern region contributing 40 per cent of the total domestic consumption. Other prominent brands in the market include Joyalukkas, GRT Jewellers, Tribhovandas Bhimji Zaveri and Bhima Jewellers among others. 

This is the group’s third major foray into a new business in the last two years after paints, and B2B e-commerce for building materials. 

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