Billionaire Kumar Mangalam Birla-led Aditya Birla Group (ABG) is the latest conglomerate to enter the branded gold jewellery sector. But this is not the only one to add a branded label to a commodity, which is mostly bought in the traditional markets such as Old Delhi’s Chandni Chowk, Kerala and Mumbai’s Zaveri Bazaar
Aditya Birla Group invested Rs 5,000 crore to launch a large-format exclusive jewellery retail stores called ‘Novel Jewels’ across India with in-house jewellery brands
ABG’s new venture will compete with Tata Group’s Tanishq and Reliance Industries’ Reliance Jewels in the nearly $60-billion Indian gold jewellery retail market, which is increasingly transitioning into an organised play
The domestic market for gold jewellery, estimated at $57 billion as of FY22, is expected to grow to $91 billion by FY25. 65% of the domestic market is unorganised, comprising more than 5 lakh local goldsmiths and jewelers and the remaining 35% is mostly organised retail and comprises both national and regional players, as per 2022 Technopak Analysis report. Further, the organised jewellery market is expected to grow to 40% in the coming years
Tata Group firm Titan Company’s Tanishq is India’s largest organised jewellery business in FY23 as it contributed nearly 85% to Titan Company’s net revenue worth Rs 40,575 crore. The chain has 400-plus exclusive boutiques in more than 240 cities. It plans to add space in 15 existing stores and add more than 40 new stores in FY24
Malabar Gold and Diamonds, Kalyan Jewellers and Reliance Jewels are also key players in the organised segment
Novel Jewels will be ABG’s third major foray into a new business in the last two years after paints, and B2B e-commerce for building materials. This will add up to its fashion and apparel retail business Aditya Birla Fashion and Retail Limited
“This foray (branded jewellery) 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 of Aditya Birla Group, had said
“Jewellery is a trust- and design-driven business, versus fashion that 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,” said Abneesh Roy, ED at Nuvama Institutional Equities
ABG, which has already begun advertising for positions, has at least six design-related positions it plans to hire for. 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 to consumption