INDIAN JEWELLERY

INDUSTRY

Prepared By Submitted To
Dalal Chintan (05) Prof. Jinal Nagad
Dalal Nirav (06)
Khushva Anand (18)
Pipaliya Manisha (45)
Shah Maulik (50)
 Agenda
 Introduction
 Generic Business Level Strategy
 Porter’s Five Force Model
 SWOT Analysis
 Value Chain
 Key Success Factor
 Introduction
India is a leading player in the global gems and jewellery market

The gems and jewellery industry occupies an important position in the Indian
economy. It is a leading foreign exchange earner, as well as one of the fastest
growing industries in the country
The two major segments of the sector in India are gold jewellery and
diamonds. Gold jewellery forms around 80 per cent of the Indian jewellery
market, with the balance comprising fabricated studded jewellery that includes
diamond studded as well as gemstone studded jewellery.
The Indian gems and jewellery industry is competitive in the world market due
to its low cost of production and the availability of skilled labor. In addition, the
industry has set up a worldwide distribution network, of more than 3,000
offices for the promotion and marketing of Indian diamonds.
 Indian retail jewellery overview

Yesterday Today

Unbranded Branded

Silver & Gold jewellery Gold & Diamond jewellery

Investment Investment + Fashion

Traditional design Fashionable & innovative design

Marriage & festival is peak season Wearability and gifts

Jewellery sold on commodity basis Jewellery being sold on a per piece

with labour charges basis
 Conti…
Major Players:
 Vaibhav Gems Ltd.

 Classic Diamond (India) Ltd.

 Shrenuj & Company Ltd.

 Goldiam international Ltd.

 Su-raj Diamonds & Jewellery Ltd.

 Rajesh Exports Pvt. Ltd

 Gitanjali Gems Ltd

 GITANJALI GEMS LTD.
Business Overview
Established presence
The company is one of India’s largest integrated diamond and
jewellery companies Established in 1986. Sight holder status with
DTC through a promoter group company
Sophisticated and scalable diamond and jewellery manufacturing
facilities
Approximately 1,246 retail outlets in India and 143 outlets in the U.S.
Leading brands
 Expansions
•Ramping up the retail chain
•Expanding stores in India
•Acquisitions including Samuels, Rogers
and Tri-Star
•Plans to make further inorganic growth
in the U.S. & Far-east
•Expanding manufacturing capabilities to
address increasing demand
• Further integration within the jewellery
value chain
• Higher margins in retail business
• Higher value addition
Diversification
•Gitanjali Lifestyles to focus on
Manufacture and distribution
Of luxury and lifestyle products
•Developing 200 acres gems & Jewellery
SEZ in Hyderabad
•Plans to develop more SEZs focused on
gems & jewellery across India
•To partner for developing real estate
infrastructure
•Leverage its key strengths
•Large opportunity for incremental
revenue
•Diversify business model
Generic Business Level Strategy
 Michael Porter’s Five Force Model for Jewellery
Industry
POTENTIAL
NEW ENTRY

INDUSTRY COMPETITORS

SUPPLIER BUYERS

RIVARY AMONG EXISTING

FIRMS

SUBSTITUTES
 Inter-Firm Rivalry High
• Two types of rivalry. (1) Inside India & (2) Outside
India.
• Large presence of unorganized sector. 0.2 Million
Gold jewelers and over 8,000 Diamond jewelers
• International rivals Such as, China

• Threat from producing nation like S.A. & Russia.

Bargaining Power of Suppliers Medium
• In jewellery industry the suppliers are S.A., UAE, Australia, US, Congo,
Botswana, Russia, DTC.
• Few Alternatives of cutting & polishing.
• Skilled labor
• Bargaining power of India is enhanced because India is largest consumer of
gold jewellery.

Bargaining Power of Buyers Low

• Divided in two types 1. Domestic buyers &

2. Foreign buyers
• As investment (Demand increase)
• Bargaining power of Indian exporter is high because Majority of the world's
rough diamond production is cut and polished in India.
Threat of Substitutes: Low
• Substitutes are Real assets, Stock market, & Bank deposits &
mutual fund investment and Other types of jewellery like imitation
jewellery, bagasra jewellery, stone jewellery etc.
• Second preferred investment behind bank deposits
• Status and standard of living increase so demand is increasing at
high rate.
Barriers to entry Low to Medium
• Low capital requirement
• Government subsidy
• EXIM policy & government’s rules-regulations are high
• Skilled manpower is essential
• Advanced technology required
SWOT ANALYSIS OF GITANJALI JEWELLERY LTD
Strengths
• Large integrated diamond & jewellery player and having an
international presence.
• Pioneers of branded jewellery in India.
• Strong marketing & distribution network. Strong retail presence in
India and in U.S. 112 distributors and 1246 outlets in India and 143
outlets in U.S.
• Strong brand equity and broad product range Such as, Gili, Asmi,
Nakshatra, Sangini, D’damas, Vivaaha, Maya, Giantti, Desire, Samuels
etc.
• Visionary leadership (Acquiring Nakshatra, Samuels, Rogers etc.)
• Expanding manufacturing capabilities in Mumbai and at special
economic zone in Surat to address increasing demand.
• Net Worth is 3,460.37 million Rs. So we can say that it is financially
very strong company.
• Sight holder status with DTC through a promoter group company.
• Highly skilled, qualified and motivated employee.
Weaknesses
• There may be conflicts of interest between them and certain of their
Promoter group companies.
• As the major raw material requirements need to be imported, companies
normally stock huge quantities of inventory resulting high inventory
carrying costs.
• Technology is less improved compared to China and Thailand’s company.
Opportunities
• New markets in Europe & Latin America.
• Growing demand in South Asian & Far East countries.
• Industry moving from a phase of consolidation.
• Expansion possibilities in lifestyle and luxury products in India like
watches, leather goods, Platinum jewellery because increasing disposable
income of people.
Threats
• International Competition:-China, Sri Lanka and Thailand's entry in
small diamond jewellery.
• Increase in the price of Gold & Diamonds.
• Other local competitors. According to the data 97% jewellery sales are by
family jewelers.
• Threat from producing nation like S.A. & Russia.
 VALUE CHAIN

Diamond polishing Diamond Distribution Shopping Experience

Rough Distribution Jewellery Jewellery Retailing

Manufacturing

Jewellery Branding
Direct From Mines Jewellery whole selling
Finance
• The company’s operations running across the whole value chain so finance is
the very much important factor. Working capital requirement is much more.
The company is having finance from various sources like shares, bank loan,
and credit line.
Infrastructure
• The company is having latest technological manufacturing plants. Its branded
showrooms & other outlets are having good infrastructure. It is also having
plants in special economic zone at various places
Procurement
• The company procures its raw materials, machinery & other ancillary things
from recognized sources. The company is having good creditability with
supplier. It has to maintain its relations with different sight holder for
procurement of diamond for jewellery making.
Technology
• The company is using latest technology in processing means
jewellery manufacturing & also in designing. The company is
having business in so many countries so that it has to pay
attention over the designing, manufacturing etc. with the high
technology to satisfy buyer’s needs
.
Human resources
• As of September 30, 2005, the Company had 410 full-time
employees, of which approximately 117 employees were
employed at its corporate offices in Mumbai. In addition, as of
September 30, 2005, its subsidiaries, joint ventures and associate
companies employed in the aggregate more than 740 employees,
including 250 employees in its retail operations.
 KEY SUCCESS FACTOR (KSF)
Marketing & Distribution related factor:
Strong retail presence in India and the U.S.: The company is occupying good
position in retail jewellery provider in both India as well as U.S. Gitanjali has a
strong network of distribution. Here Strong retail presence in India and in US. It has
112 distributors and 1246 outlets in India and 143 outlets in US.
Strong brand equity and broad product range: It is the pioneer of branded jewellery
in India. It brand equity is too high.
Significant focus on retail and distribution network to drive growth: It also keeps in
mind distribution network which provide the product to end users. The company is
having its retail outlets also.
Manufacturing related factor:
Sophisticated manufacturing facilities including upcoming Hyderabad SEZ: The
company is having good infrastructure facility in various special economic zones.
Gitanjali has been achieved economies of scale and learning curve effects which is
benefited in low cost production because in India skilled labor is available at
cheaper rate.
Technology Related factor:
• Gitanjali has expertise in cutting, polishing the diamonds and in
designing the jewellery (specifically in small design).
• Presence across the whole value chain : The first & foremost
success factor for the company is of its presence across the entire
value chain
Human Resource and Top Management related factor:
• Visionary leadership and a deep management team
• Strategic Acquisition of Tri-Star : Manufacturer and global
distributor of Canadia® brand diamonds and diamond jewellery
in various countries, such as Australia, Canada, England, Ireland,
Northern Ireland, New Zealand, Scotland, and the United States
Thank you…..