World Gold Council sees India's jewellery industry future as robust, organised
In the World Gold Council’s latest report on the Indian gold jewellery industry, change towards organisation over recent years is attributed to wider factors such as demonetisation and the introduction of the Goods and Services Tax as well as changing consumer behaviour.
In its latest report on the Indian gold market titled ‘Jewellery Market Structure’, the WGC stated that Indian retail is evolving at a swifter pace than manufacturing but that the latter is evolving through initiatives such as jewellery parks. The report picked out changes in consumer behaviour and in government regulations a major reasons for change over the past few years.
“The Indian retail jewellery market has seen several structural changes over the last decade, some driven by regulations and some by shift in consumer behaviour,” said WGC regional CEO for India Somasundaram PR, the Gem and Jewellery Export Promotion Council reported on its website. “While mandatory hallmarking, implemented in its final shape as defined, should provide a level playing field, national and regional chain stores are nevertheless set to gain market share in the current trend because of their access to credit and the large inventory they carry. Small players need to become more transparent and adapt technology faster if they have to gain similar access to credit and protect market share.”
The gold jewellery industry has seen greater tax compliance from businesses in line with the organisation of the market, according to the WCG. The last decade has seen a significant shift towards large-scale stores, although local jewellers still dominate the retail landscape.
“The manufacturing sector is only at the beginning of its much-needed transformational journey,” said Somasundram PR. “Jewellery parks, some of which have already been established, will help address concerns about ethical standards and working conditions. The same can help eliminate barriers impeding the growth of manufacturing industry, further supporting demand positively. 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.”
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