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February 23, 2024
Kailash Babar & Sagar Malviya, Economic Times
Mumbai, 23 February 2024
Tata Group and Reliance Industries, two of India’s largest conglomerates, are vying for premium retail real estate in Mumbai as they extend their footprints, creating rivalry in a city starved of marquee properties. From Zara and Starbucks to Westside and Titan, the Tata Group occupies nearly 25 million square feet of retail space in India. That is still no match for Reliance Industries that control three times more at 73 million sq ft for more than 100 local and global brands.
But in Mumbai, they are evenly matched, having nearly 3 million sq ft of retail space each. That is a quarter of what is considered the most prime retail real estate in the country, and both the retail giants are looking for more.
“In a modern retail environment, most visible locations contain more successful or larger brands. It just so happens that many of those brands are owned by either Reliance or the Tatas,” said Devangshu Dutta, founder of Third Eyesight, a strategy consulting firm.
“Tatas have been in retail for longer but also slower to scale up compared to Reliance which had this stated ambition of being the most dominant and put the money behind it,” he said.
In a market where demand is much higher than supply, developers and landlords seek to separate the wheat from the chaff, experts said. Ultimately, success in Mumbai’s retail real estate scene hinges on a delicate equilibrium between accommodating industry leaders and fostering a vibrant, varied shopping environment, they said. “In the competitive landscape of retail real estate in Mumbai, commercial developers and mall owners often face the strategic challenge of accommodating prominent retail brands,” said Abhishek Sharma, director, retail, at commercial real estate consultants Knight Frank India.
“These big brands, with a significant market share of 40-45% in the Indian retail sector, can easily be termed as industry giants and possess the potential to command 45-50% of space in any mall,” he said. According to Sharma, there may be perceptions of preferential treatments, but the dynamics are complex, and developers must balance the demand from these major brands with the need for a diverse tenant mix.
Tata Group entered retail in the late 1980s, initially by opening Titan watch stores and a decade later by launching department store Westside. So far, it has about 4,600 stores, including brands such as Tanishq, Starbucks, Westside, Zudio, Zara and Croma.
While Reliance Retail started in 2006, it overcompensated for its late entry by aggressively opening stores across formats. Reliance has over 18,774 stores across supermarkets, electronics, jewellery, and apparel space. It has also either partnered or acquired over 80 global brands, from Gap and Superdry to Balenciaga and Jimmy Choo. A diverse portfolio of brands across various segments through strategic partnerships and collaborations helps an entity like Reliance to leverage synergies and enhance retail presence, especially in malls, experts said.
“The array of brands with Reliance bouquet allows it to enter early into the project and set the tone and positioning of the mall,” said a retail leasing expert who requested not to be identified.
“This positively helps the mall to set its own positioning and future tenant mix. It also helps Reliance place their brands in most relevant zones within the mall. This will emerge as a clear differentiator in a city like Mumbai where brands are already jostling for space, which is the costliest in the country,” the person added.
(Published in Economic Times)
admin
August 24, 2023
admin
August 23, 2023
New Delhi, 23 August 2023
Bindu D. Menon, Financial Express
Tata Group’s Titan Company is not the only one to be bullish on the fine jewellery segment by recently raising its stake in CaratLane from 71.09% to 98.28% for a consideration of Rs 4,621 crore. Other corporate groups as well as private equity firms who have entered this segment are making investments and scaling up.
For instance, recently, Aditya Birla Group entered the gold jewellery market with the launch of Novel Jewels with an estimated investment of Rs 5,000 crore. It also plans to launch large-format jewellery formats and in-house brands.
“The younger generation’s changing style preferences and shopping habits have favoured the growth of jewellery chains and a shift in jewellery designs to lighter, more contemporary styles. This has also facilitated the delinking of the cost and the product price to some extent,” said Devangshu Dutta, Founder, Third Eyesight.
Analysts following the sector said that lighter weight jewellery have been a game changer for the industry. Moving away from the traditional 22 carats jewellery line, younger consumers are opting for 12, 14 and 18 carat jewellery in minimalist designs; a trend largely mimicked from the western markets.
From the companies’ perspective gross margins are invariably higher in design enhanced jewellery as compared to traditional designs.
Leading silver jewellery brand Giva jewellery too had recently bagged a Rs 200 crore funding led by Premji Invest to expand its product line. The round also saw participation from existing investors such as Aditya Birla Ventures, Alteria Capital and A91 Partners. Giva reportedly launches 250 new designs every month, as per the company’s disclosure.
“We look forward to leveraging Premji Invest’s playbook on omnichannel across several consumer brands and retail businesses to strengthen our leadership position and establish our pan India presence,” said Ishendra Agarwal, founder and CEO, Giva.
Giva plans to use the capital for inventory management and expanding its offline presence in India. The company has secured Rs 130 crore funding till date, excluding the current funding.
Fine jewellery in India are priced between Rs 5,000 to Rs 50,000. Major players in the segment include Caratlane, Tanishq, Bluestone among others.
(Published in Financial Express)
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June 30, 2023
Pooja Yadav, Afaqs
June 30, 2023
Over the last two-three years, we have seen technology innovations making its way into the Indian jewellery sector. Brands have been trying to transform the online jewellery segment by using various technologies like augmented reality (AR), artificial intelligence (AI), live video assistance, computer-aided design (CAD), computer-aided manufacturing (CAM), and more.
Despite the numerous innovations, the offline jewellery segment is still ahead of the online space, when it comes to sales. What makes the offline jewellery segment outpace the online segment?
The Indian e-commerce market is expected to grow to $111.40 billion by 2025 from $46.2 billion in 2020, as per an International Institute of Gemology report. While the segment remains to grow, what drives it back is the customer preference for physical jewellery stores.
Vipin Nair, marketing head & CRM at Malabar Gold & Diamonds, points out, “As of now, there seems to be no real alternative to trying on jewellery pieces in a retail store. Brands have been able to crack the logistics part, but not the ‘feel’ part. AR/VR has been around for a long time, but it doesn’t give you a feel of the jewellery pieces. It is a poor technology. The big purchases will continue to happen only in offline stores.”
Nair adds that despite the many challenges in the online space, it is now growing faster than before. “Earlier, there was a disconnect in the online segment. A customer had to wait for two-three weeks to receive a product. The online platforms seem to have cracked this business model, as whatever you like today, you can order and get it in a day’s time.”
Online jewellery segment started gaining popularity in 2020. In 2018, Tanishq started its e-comm website, and many other brands accompanied it in the online journey. What started with Tanishq has become a new journey for many start-ups and brands in the online space.
During Covid, the jewellery industry has been one of the worst-hit. Advent of online shopping and consumers relying on digital platforms during pandemic, helped brands strategise and invest more on online platforms.
According to Devangshu Dutta, founder and chief executive of Third Eyesight, trust is important when one is buying jewellery.
“It’s not a question of innovations. You can have virtual trials, whether it is online or in a store. But at the end, the customers have to see the piece and then buy it. Even if you are an online brand, you have to be able to offer an omnichannel experience. You have to enable in-home experience.”
As per Dutta, what’s required in this segment, is a change of mindset. “The share of online and modern retail will grow with time.”
Brands like Tanishq, Bluestone, Malabar, Kalyan Jewellers, Tata CLiQ, etc., are working on newer technologies. Then there are new players like the Aditya Birla Group that is set to foray into the branded jewellery retail business, with an investment of Rs 5,000 crore. The group’s new venture ‘Novel Jewels’ will have in-house brands in large-format exclusive retail stores across India.
Rashi Goel, founder and CEO, Performonks, says that the new brands entering the category, are trying to change the rules of the game. “These brands cater to working women, who want lighter, modern and fashionable pieces that they can match and wear with their outfits every day. So, the battle will be of brand building.”
“Tanishq offers light pieces, but tends to advertise heavy wedding jewellery, because that is in line with the category codes. The Aditya Birla Group will have to differentiate itself through the product experience. It will have to tell a brand story that takes the category narrative forward. If it is targeting young women looking for modern styles, it may benefit by having a direct-to-consumer (D2C) element (alongside retail stores in big cities). It could incorporate technology, where women can ‘try on’ jewellery virtually on the app.”
Recent trends
Citing the World Gold Council, Asian Lite International reports that there is a growing demand for lightweight and studded jewellery. Bridal jewellery alone accounts for at least half of the market share.
“Women prefer lightweight jewellery because it is practical and blends well with a modern lifestyle,” shares Nair of Malabar Gold & Diamonds.
Technology innovations may bring in some challenges, but they are also helping many people, in terms of convenience and choice. The online segment, which is still a fraction of the offline segment, is lately generating interest among digital savvy millennials.
Puneet Mansukhani, partner, KPMG in India, states that the online jewellery space has been garnering significant attention, especially amongst the millennials.
“Customer expectations are changing. Personalisation is playing a critical role. Technology involvement is increasing by the day, with AR taking the lead. However, the industry still has to tackle challenges around pilferage.”
On the upcoming trends, Mansukhani says, “Jewellery which is made to order with a modern look of hyper-personalisation (customised), is gaining importance, considering that value and convenience continue to be the top drivers of consumption.”
Manufacturers are increasingly focussing on producing lightweight pieces to satisfy the demands of young consumers, especially those who want to wear gold jewellery that matches with their western outfit every day, as per a World Gold Council report.
According to Third Eyesight’s Dutta, since fashion (lightweight) jewellery usually doesn’t cost much, “a consumer is not that invested in it. You can buy it online, like any other fashion product.”
The World Gold Council report adds that studded jewellery – known as ‘Polki’, ‘Kundan’ or ‘Jadau’ – has an estimated market share of 15-20%. The share of studded jewellery in North India is considerably higher. In South India, consumers are more inclined towards gold products, 60-70% of which are studded with diamonds and the remaining 30-40% are set with precious or semi-precious stones.
Jewellery landscape
In India, jewellery was traditionally purchased for investment purposes. People used to believe in buying heavy jewellery. But now, there’s a shift towards versatility and contemporary jewellery.
Nair states, “Contemporary designs are getting a lot of traction lately. It was not the case 10-15 years back. Lightweight jewellery is now in vogue and heavy jewellery is restricted to occasions like weddings. People now are looking for something practical. They are more into the design, quality, etc.”
Will the changing consumer preferences impact the bridal jewellery market?
Bridal jewellery dominates the gold jewellery landscape, with 50-55% of market share. Indians usually purchase gold for two occasions – weddings and festivals.
Around 11-13 million weddings take place in India every year. With women marrying at an average age of 22 and more than half of the country’s population below the age of 25, the demand for bridal jewellery will remain strong over the long-term, as per the World Gold Council data.
Going forward
The jewellery manufacturing landscape in India is largely unorganised and skill-intensive. Most jewellery pieces are still hand-crafted by artisans.
“Hence, the scale continues to be limited. Although we are gradually seeing jewellery retailers invest in large set-ups. We are also witnessing the overall jewellery market heading towards formalisation on the back of GST, government policies around hallmarking and exports,” shares Mansukhani of KPMG.
“For large players looking to enter this space, automation and focussing on in-house manufacturing, could help jewellers counter the high manufacturing charges.”
