Armenia puts up for sale more than half of valuables from state reserve

On September 24, the Government of the Republic of Armenia approved the sale of the most illiquid valuables stored in the vaults of the State Treasury of Precious Metals and Stones supervised by the Ministry of Finance of Armenia. The auctions will take...


Caledonia Mining acquires new gold mining project in Zimbabwe

Caledonia Mining has entered into an agreement to acquire the mining claims over the Maligreen project, a property situated in the Gweru mining district in Zimbabwe from Pan African Mining for $4 million.


SA diamond producers welcome ruling on Mining Charter

The South African Diamond Producers Organisation (SADPO) has supported a High Court ruling that the country’s Mining Charter is an instrument of policy, not binding legislation.


Indian diamond exporter under Income Tax radar

The Income Tax department carried out search operations on premises connected to a leading diamond manufacturer and exporter from Gujarat and seized a large volume of unaccounted data. The raids, which began on September 22 based on intelligence input...


New RJC standard for lab-grown materials

Responsible Jewellery Council, the world’s leading standard-setting organisation for the global jewellery and watch industry with 1,500 member companies in 71 countries, announced that it will develop a standard for laboratory-grown materials to establish...


India’s gold jewellery retail industry witnessing structural transformation

24 march 2014

Ashutosh Sharma, Managing Director, with more than 18 years of experience in this field, is the backbone of Shreem Jeweler, which has its flagship showroom in Delhi. In his current role, he is responsible for designing, product development and expansion and diversification of the company. Ashutosh, a certified Diamond Grader and Gem Stone Expert, started business in 1996. Since then, Shreem Jeweler has carved a niche for itself with exquisite designs and superior quality products. A trend-setter in jewellery design, Shreem Jeweler has an exquisite jewellery collection in wedding, lightweight, designer and work wear for women. Each collection offers conventional and contemporary designs that are conceptualized by an in-house team of designers and craftsman fr om across India.

Here, in his interview with Rough&Polished, Ashutosh Sharma describes the achievements of his company and gives an overview of the jewellery industry in India.

Please give us an overview of your company and an insight into the type of diamond jewellery you manufacture. From where do you source your loose diamonds?

Shreem Jeweler specializes in the latest variation of fashionable ornaments ranging from gold, diamond, rubies, emerald, platinum jewellery and coloured gold with specializing in diamond jewellery. With the distinction of being the trend-setters in jewellery design, Shreem Jeweler has an exquisite jewellery collection in wedding, lightweight, designer and work wear for women.

Shreem Jeweler seeks to meet customer satisfaction by customizing the range of offerings with regards to the shape, size, texture and others according to the customer specifications. Each collection offers modern, conventional and contemporary designs that are conceptualized by an in-house team of designers and craftsman from across India.

We do not manufacture diamond jewellery, but outsource the same to the best across India. Since we are wholesalers in diamonds as well, we help the customer in designing a new jewellery set, choose the right / desired type of authentic stones and get the same made by outsourcing to craftsmen in India. The unique selling proposition of the brand is the designing and a lot of emphasis has been given to this. Besides this, the quality of the diamonds used is aesthetic in nature. We source loose diamonds from within the country like Surat, as well as across the globe including countries like Belgium and Hong Kong. We only deal in pure, authenticated diamonds.

Has the gold import restrictions impacted your business? Wh ere do you source your gold requirement and how important is the gold content in your jewellery?

Since we do not manufacture jewellery, the gold import restrictions have not affected our business in any way. We source our gold from local markets and importers across India who we have been dealing with since the time Shreem went into wholesaling. We have been in the industry since the past 18 years which has helped us in building healthy relations in this industry and due to this we can assure our consumers on the authenticity of our jewellery.

In general, gold is required for the basic framework of any jewellery and in the case of our jewellery as well. Besides, value and allure of gold, in our jewellery all the gems, diamonds, precious/semi precious stones are embedded in gold to ensure that the stone remain intact. So, gold is a major requirement for our company and its content in our jewellery is imperative.

Like overseas markets, diamond studded silver jewellery seems to be catching on India too?

We do not deal in silver jewellery but a price crash has spurred gold demand and not in the case of silver. During 2011-12, silver jewellery exports grew to 44% compared with gold jewellery export growth of 30%. India, the biggest consumer of white metal jewellery, has found a new class of buyers in the West who will invest less than $100 (Rs 5,200) in jewellery.

In India, the demand for silver jewellery has dropped significantly and the investment demand for the metal has almost dried up despite the fall in price. The industrial demand of silver is also not bright in the domestic market as the growth of electronic industry, the major user of silver, has slowed down.

How has the fluctuating Indian Rupee affected your company’s overall business?

The fluctuating currency has not impacted our business but falling rupee has affected finances of exporting companies. Due to sharp fall in rupee in short period, credit limits of diamond companies have been impacted. Credit limits for getting dollars are decided in rupee terms by the banks. Hence companies that received dollar credits in April will get lower credits when they approach again to the bank. This is because despite the fact that their export proceeds are in dollars, the limits decided in Indian rupee terms will come down if rupee exchange rate falls.

Whatever difference that we get while purchasing gold from importers, we directly charge the same to our consumers. Hence, the fluctuating Indian Rupee will affect our consumers directly as Indians think they are buying gold in rupees but they are actually buying gold in dollars.

What comments on the Indian domestic jewellery sector and its growth during the past few years?

India has a thriving manufacturing base for gems and jewellery and is a well-known global diamonds and jewellery manufacturing hub. Jewellery consumption in India has been traditionally driven by the strong cultural affinity for gold, with it being the preferred form of jewellery worn. Gold jewellery is an integral part of weddings in India, and is considered as a necessity with wedding related demand accounting for substantial portion of overall jewellery demand, especially in the South. Jewellery demand has also been supported by the increasing appetite for gold jewellery from rural and non-urban markets which constitute a major chunk (about 70%) of the total consumption.

The domestic gold jewellery retail industry has been witnessing a structural transformation with organized retailing gaining prominence in the country. Contribution of organized retail to total jewellery consumed in India has grown to 18% from less than 5% in the past decade. The trigger of this movement is the widening retail network of organized players and shifting consumer preferences towards organized / branded jewellery. Jewellery consumption over the past decade has recorded a strong growth upwards of 15% driven increasingly by organized retail. Organized players have steadily chipped away market share from smaller / unorganized retailers by addressing the need for enhanced experience of a demanding customer base, which is marked by shifting demographic and socio-economic profiles. Operating income for organized jewellers has grown at a considerable pace over the past few years, driven by the increasing demand for the branded jewellery, aided by the aggressive expansion undertaken coupled with the continued increase in gold prices.

The gems and jewellery industry expected to double in size in the next five years to between Rs 500,000 crore and Rs 530,000 crore by 2018; this sector is considered one of the most important sectors of the Indian economy and also one of the fastest growing sectors in the past few years. In 2012-13, the industry drove jewellery exporters to the tune of Rs 227,000 crore, outperforming textiles and apparels by a huge margin of 25%. Even today, our country has a large domestic jewellery market and is the largest consumer of gold jewellery in the world with 29 per cent share of total global demand for gold as jewellery, besides also having a robust jewellery manufacturing industry.

What changes have you seen in Indian consumers’ jewellery preference in the local market and what is the trend now in terms of diamond content, gold content, design, etc.?

India as a market is now well read and up to date with all the latest trends across the globe. Indian consumers are now adopting trends of the West and are more eager to experiment but within a certain budget. This price sensitive market has seen a buying drift from diamond to gold jewellery in 2013. Since diamond’s resale value is less, the economic conditions have resulted in consumers purchasing more gold metal. India is currently the richest country in the world in terms of gold consumption. Two-different-metal jewellery, three-piece jewellery, stone changeable jewellery, rose gold jewellery are just a few of the latest innovations introduced at Shreem in the last year. Many retailers across India have now become very active in experimenting with metal, precious / semiprecious stones and designs. Along with the growth has come a wave of new jewellery brands paraded before international and domestic buyers. India’s middle class, perhaps the largest in the world at an estimated 300 million, is becoming a big consumer of India’s new jewellery designs and brands. The demand for semi precious stones is also one that has been seen across the country. Something that makes a statement, keeping you looking trendy, within the budget is exactly why consumers prefer semi precious / precious stones over diamonds. This trend has recently picked up, but will grow faster over the years.

Earlier jewellery was all about gold, however these days people love to experiment. At Shreem, we keep up with the trend and are introducing latest collections time and again. We have received wonderful response on our collections and also offer the facility to customize jewellery as well.

Is couture jewellery being made now with lower carat gold, given the shortage of gold?

Yes, the shortage of gold import has resulted in the same. Earlier we had jewellery made from 18 carat gold but now we also have jewellery from 14 carat gold.

What’s your opinion on the Government/RBI’s step to curb imports of gold? What do you think will be its effect in due course?

India is the world's biggest gold importer, soaking up a third of the world's supply every year. Gold is the country's biggest foreign purchase after oil. The curb on imports of gold to ease the stress of the country’s balance in finances could be a hard blow to the domestic jewellers as they will then not be able to meet the demand of Indian consumers due to the sudden drop in supply. As said earlier, we Indians think that we buy gold in rupees, but we actually buy gold in dollars. Hence, with every purchase made by a consumer, the money will go to the country we import gold from. India exported 7% (61 tonnes) of the total imported gold (867 tonnes) in fiscal year 2013. The ratio of exports to imports has remained at that level in the last few years, according to estimates of the All India Gems and Jewellery Federation. This step taken up by the Government is only to discourage people from investing in physical gold and give them the benefit of investing in gold from alternative financial instruments. This is only being done to balance the inflow and outflow of currency. This will affect domestic retailers in the long run and labourers will find it difficult to survive in the current scenario. 

Indian consumers’ jewellery preferences in the last few years seem to have taken a radical change. Has diamond jewellery found its footing in the gold-loving Indian market?

There has been a drift in the buying trend that has been seen in 2013. Many customers, at our stores, have purchased more gold jewellery sets than diamond sets as compared to last year. Many of our regular customers who would otherwise purchase diamond sets are now purchasing gold jewellery sets. Gold is synonymous with savings and security for many Indians. Even after the shortage of gold and hike in price of gold, consumers have still opted for gold over diamond. 

Aruna Gaitonde, Rough&Polished, India