Mumbai: India’s jewellery retail sector has surged from $50 billion in 2018 to $80 billion (Rs 666,480 crore) in 2024, according to a report by Motilal Oswal Financial Services Ltd (MOFSL).
There are multiple drivers in the industry leading to such rapid growth, driven by rising disposable income (higher per capita growth in double digits), an improving mix for regular wear (beyond weddings and investment-led), enhanced product offerings (design, diamonds, etc.), trust-building through hallmarking, and a better buying experience at organized retail outlets.
Within this landscape, organized retail accounted for about 36-38 per cent and comprised both pan-India and regional players.
The remainder of the jewellery retail sector continued to be dominated by the unorganized/local players, comprising over 500,000 local goldsmiths and jewellers.
The total gold consumption in India was attributed to 66 per cent for jewellery and remaining 34 per cent for bars and coins.
“The gold market experienced notable fluctuations in imports from FY18 to FY20, reaching 980 tonnes in FY19 before declining to 720 tonnes in FY20. This volatility was led by various factors, including declines in global gold prices, buoyant economic conditions leading to heightened disposable incomes, and substantial demand for gold due to traditional celebrations and weddings. However, in FY20, a significant drop occurred due to escalating import duties and the initial stages of an economic slowdown,” a press statement by MOFSL said in Mumbai.
The top 10 states contribute 78 per cent of the organized retail network of over 2,000 stores. These states contribute 60 per cent of the total population and 68 per cent of the GDP.
Tamil Nadu, Maharashtra, Karnataka, West Bengal, and Uttar Pradesh are the top 5 states with a store mix of 15, 14, 10, 8 and 7 per cent respectively.
“Weddings and festivals are the primary reasons for the purchase of jewellery in India. Bridal jewellery still accounts for a significant portion of demand, contributing 55 per cent to the total jewellery demand. Daily wear jewellery accounts for 30-35 per cent of the Indian jewellery market. Players are strategically focusing on manufacturing lightweight pieces to cater to the preferences of younger consumers, especially those who desire daily wear gold jewellery that complements western-style attire. Fashion jewellery , on the other hand, contributes nearly 10 per cent to the Indian jewellery market,” the statement added.