Millennials have been driving online jewellery purchases even as the ticket size has largely remained stagnant and small. 
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Millennials have been driving online jewellery purchases even as the ticket size has largely remained stagnant and small. Gold has always been one of the most popular asset classes for Indians especially for the earlier generations even as the younger lot moved towards stocks and mutual funds.
A latest study by World Gold Council (WGC), however, has revealed interesting trends especially those related to millennials who have been very active in the investments arena in the last couple of years.
According to the study, millennials have been driving online jewellery purchases even as the ticket size has largely remained stagnant and small.
“The Indian online jewellery market has also seen rapid growth over the last few years, driven by demand from millennials, growing internet penetration and a hike in smartphone sales,” stated the latest report by WGC.
“Interestingly, while online jewellery purchases have risen, the average ticket size has remained between 5 and 10 grams. Online buyers tend to purchase lightweight daily wear/fashion jewellery in 18-carat gold,” it added while highlighting the estimates that project the market share of online jewellery in the next five years to double to 7-10 per cent from the current 3-5 per cent.
This will be driven by greater online offerings from jewellers and a growing acceptance of online channels, stated the report.
Incidentally, the report titled ‘Jewellery market structure’ further stated that while small independent retailers still dominate the segment, the market share of chain stores (national and regional) has increased steadily over the last decade.
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“Shifting consumer preferences have aided industry organisation as customers seek better shopping experiences, transparent pricing, buyback policies, and increasingly purchase via bills and online transactions. As a result, chain stores have grown over the last 10-15 years, gaining 35% market share as of 2021,” stated the report.
According to the study, Tata Group’s Tanishq is the largest chain in India with 382 stores spread across 209 cities. It is followed by Malabar Gold & Diamonds (150 stores; 111 cities), Senco Gold & Diamonds (126 stores; 85 cities), Kalyan Jewellers (116 stores; 87 cities), Reliance Jewels (99 stores; 85 cities), Joyallukas (85 stores; 67 cities) and PC Jewellers (82 stores; 68 cities).
“Demand for better designs and consumer experience, a growing awareness about hallmarking, better pricing structures and competitive return policies, as well as the introduction of GST and demonetisation, have all accelerated the shift towards chain stores,” says the report.
More importantly, the report estimates that over the next five years, chain stores will continue to expand, and their market share will surpass 40% per cent with the top five retailers likely to open 800-1,000 stores during this period.
“Small players need to become more transparent and adapt technology faster if they have to gain similar access to credit and protect market share,” says Somasundaram PR, Regional CEO, India, World Gold Council.
“Bottom line is - the sector has grown but the wave of change facing the industry due to tech adoption and broader tax compliance in the economy can be a boon for those who are willing to transform and a significant risk for others whose business models continue to rest on legacy practices,” he added.
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