Put it on a bling! branded jewelry shops are expected to proliferate

The major retail jewelry chains in India are growing at an incredibly rapid pace; 500 outlets are expected to rise from the top five chains in only two to three years. Smaller and midsized chains are also entering the competition.

At Metal Focus, a bullion research fund with headquarters in London, Chirag Sheth, chief consultant, said that “our survey revealed that the top five retailers are looking to add 400-500 stores over the next 2-3 years.”

Large chains now have a 37% market share in gold jewelry; however, it is anticipated that this percentage will increase to 45%. While Tata Group businesses like Tanishq are expanding their presence in malls, other brands, including Reliance Jewels, Kalyan Jewellers, Malabar Gold & Jewels, and Joyalukkas, are also adding new locations. To get into this expanding market, the Aditya Birla Group has recently announced a Rs 5,000-crore investment under the Novel Jewels brand.

According to Chirag, a few other companies are also investigating the jewelry market, either by opening their own shops or by obtaining franchises.

In FY25, Kalyan Jewellers wants to open at least 130 showrooms in India (80 Kalyan and 50 Candere, a digital-first jewelry platform), as well as six stores in West Asia and the US. In FY24, it opened 71 new shops, bringing the total to 253. In India, Titan has reported the opening of 27 Tanishq shops during the March quarter, while CaratLane, its internet jewelry platform, added 10 more stores during the same period.

Small and medium-sized jewelry companies have needed to become organized and grow their businesses. According to Indian Bullion Jewellers Association national secretary Surendra Mehta, “small and mid-size players have realised that they have to organise and expand.” Many are thinking about going to the capital market and organizing initial public offerings (IPOs) in order to raise money for new ventures and shop growth. Mehta said, “The expansion is mostly taking place in tier 2 and tier 3 cities.”

India is now the second-largest global market for gold used in jewelry, and this trend is anticipated to continue as shown by a Knight Frank analysis that shows the proportion of ultra-high net worth individuals with assets of at least $30 million increased by 11% in 2021 compared to the previous year. According to the report, that number would increase by almost 39% in 2026, while the number of people with at least $1 million in wealth is predicted to rise by roughly 77% during the same five years.

According to a Metal Focus study of chains of retail jewelry, the growth strategy will require a significant amount of cash, including funds for jewelry inventory. In order to grow stock, the top five players’ expansion will need operating cash. This will assist the jewelry producers by resulting in at least 30–50 tons of new inventory.

Banks are often hesitant to lend to the gem and jewelry business because of the past of fraud in this field. According to the poll, several small chains with 15–20 locations are considering going the capital market route in light of this. Some participants want to raise money on the main stock exchange’s small and medium business (SME) section in addition to initial public offerings.