Role of E-commerce in the growth of imitation jewelry
Indian Jewelry Market – Current Scenario:
The Gems and Jewelry industry plays a significant role in the Indian economy, contributing around 7% to the country’s GDP and 15.71% to the total merchandise export. It is one of the fastest growing sectors, employing about 4.64 million workers. India is known to be the hub of the global jewelry market due to its low costs and availability of high-skilled labor.
High potential for growth and value addition has empowered the Government of India to declare the labor intensive Gems and Jewelry sector, a focus area for export promotion. India exports 75% of the world’s polished diamonds, as per statistics from the Gems and Jewelry Export promotion Council (GJEPC) and contributes largely to the country's foreign exchange earnings (FEEs). The Government of India has viewed the sector as a thrust area for export promotion and currently allows 100% Foreign Direct Investment (FDI) in this sector. UAE, US, Russia, Singapore, Hong Kong, Latin America and China are the biggest importers of Indian jewelry. This industry comprises of more than 300,000 players, with the majority being small players, coming from the unorganized sector. Contributing about 29% to the global jewelry consumption, the Indian market is worth $ 60 bn as of 2017 and is expected to reach $ 100-110 bn by 2021-2022.
E-Retailing plays an important role:
Jewelry is always woman’s favorite; it never ceases to attract eyeballs with their dazzling looks and stupendous designs. These days e-retailing is one of the emerging ways to sell expensive as well as user-friendly and affordable jewelry. E-commerce is vital to the success for the increase in imitation jewelry business, as online purchase of fashion jewelry has revolutionized the purchasing habit of the customers, with various types of jewelry been brought in the limelight through these portals. Gold jewelry trade is under a major threat due to the emergence of a diverse range of costume jewelry, whose wide variety at a low price, entices the customers to go for it. So, both online and offline jewelry market is at a boon and retailers expect good demand even from the upper class affluent women, in the upcoming festive and wedding season.
Fashion jewelry brands with an online presence, offer better pricing, greater variety, international patterns or designs, and third-party lab certification for all their products and easy payment schemes, to gain a larger customer base. Increasing demand from tier 1 & 2 cities and the rural market has showcased costume jewelry for sale via electronic media. E-commerce allows customers to view the varied range of jewelry in the comfort of their home, work place or while in transit. Attractive discounts and offers allure customers into purchasing the signature jewelry at reasonable rates. It trades in designer jewelry which has gained wide customer acceptance for their unique and innovative designs. Apart from selling through their own website, several ecommerce sites like Amazon, Jabong have been contributing to their product sales.
The online brands have an efficient exchange and return policy, which saves an individual’s time and enables an easy exchange or return. Salient features like 7-day return policy and home try on service by fashion jewelry brands, have attracted more customers to their pool. Imitation jewelry is a high growth margin business and e-tailers typically earn upto 40-60% on every transaction as compared to real jewelry segment, which offers around 15-20% margin.
There is a huge export market for Indian costume jewelry. Demand from the US and European markets have been increasing as India is able to manufacture a wide variety of elegant jewelry, using affordable labor and low cost raw material. Indian designs are more in demand throughout the year, by both the NRIs and the foreigners.Burgeoning ecommerce sites provide a platform for people settled abroad to view the product catalogue online and initiate purchase.China and India are the largest imitation jewelry manufacturers, while U.S., Europe, Australia, and many Asian countries are some of the largest importers of imitation jewelry globally.
The Road Ahead - Future prospects of the imitation jewelry market
Research by AT-Kearney states that the Indian jewelry business is expected to touch Rs 5,30,000 Cr by 2018.Imitation jewelry market is growing rapidly with the increase in demand for fashion jewelry due to its affordability and innovative designs. It has a huge demand in foreign markets because of the entry of organized players and increasing exports. The fashion jewelry market is estimated to grow at 85% during the festival season as compared to a 20% y-o-y growth, round the year.
Imitation jewelry is available at a wide price limit, ranging from Rs100 and below to more than Rs 50,000, depending on its quality and design. India stands second in terms of manufacturing imitation jewelry, after China and has a huge demand in Asian countries, Australia and Europe. Hence, future prospects of the Indian imitation jewelry market are quite conducive to the growth of the overall jewelry industry.