Future of Jewellery Retail

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Future of Jewellery Retail

• The roar of the tiger

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• The present as we understand it is not a point,
  but a package or quantum of time which is
  composed of past, present and future.

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• Just like you can't see the exact center of a
  circle you can't see the present. You only see a
  quantum of time where the past has taken
  formation.

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• The truth is we never see the present, but
  always see the past. The past is the only thing
  that can be registered by our consciousness.

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In the good old days

• The East India company like the Moguls came to
  our shores only in search of wealth.
• Many countries built their whole edifice on the
  basis of trading and barter.
• We built our business in jewellery on our skills
  of manufacturing and crafmanship and that was our
  USP.
• Every jeweller had his own unique line of
  products.

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Past

• The business was consumer driven in many parts of
  India.
• There was a lack of competition.
• Jewellers dealt with an upper hand with the
  customers as there was less competition and
  monopolised.
• Jewellers became laid back as many did not care
  to service their customers rightly.
• Quality in respect to product service was
  compromised.

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Present

• Business of money is rather funny. They say money
  sniffs money and adds to itself. Today money will
  sniff knowledge.
• We see the entry of big Retailers in the
  industry.
• The philosophy of big retail giants is built on
  making a business sense of managing the trade in
  a professional way.
• They come in with large investments acquired at
  very low capital costs.
• Land, Logistics and People are their assets which
  will be effectively deployed to drive results.
• This industry is not difficult to learn.

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• Your loyal suppliers will suddenly give them
  latest insights on design and business patterns.
• Industry will see more options of your own
  creations soon floating around duplication.
• Price wars will start Market share
• Trade will feel suffocated with way in which the
  pricing for jewellery and gold will be made on a
  daily basis by some corporates.
• Like Walmart has Daily lowest prices you will
  see gold being sold at rates not imagined.
• The biggest wonder for a jeweller will be to
  imagine how one can afford to sell below ones
  cost.

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• Massive promotions marketing programs will
  drive sales.
• Assessment of profits will be made on new
  parameters of information generated from advanced
  MIS.
• Futures and hedging will decide cost of material
  for each day, and set prices accordingly.
• Systems and management will generate profits.
• The once old, wise, intelligent, calculative
  family jeweller will now have to relearn and
  sharpen his own business skills.
• A jewellers own creations of jewellery his own
  USP will be mastered and unfolded many times.

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• The strength of many jewellers may become their
  weakness.
• Confusion and depression may set in.
• Jewellers will for the first time realize the
  importance of management and the difference
  between management and ownership.
• We will witness what stand alone shops saw after
  the rise of Walmart in the US.
• Many may wisely adopt to the change soon.
• We will have to think from market to mines not
  mines to market.
• But for those who will wait, for things to
  improve for them, will keep running on a
  treadmill.
• Just like we can't see the exact center of a
  circle we may not be able to diagnose the cause.

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Start thinking

• Tom Friedman says that 'The world is flat.'
  Paraphrased briefly it means that more and more
  people today have more and more tools to connect,
  to collaborate and to compete.
• The new dimension to jewellery retailing is not
  far away.
• When gold is volatile we complain about MCX and
  futures.
• We are worried with banks and corporates selling
  at higher margins.
• What is to be worried about the present, when
  under cutting starts, and creates panic.
• While we shall be waiting for their ships to
  sink, we shall be badly affected.
• If we do not overcome we will succumb to their
  plans.

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POA

• Let us unite on certain fronts first without
  delay.
• We need to start to develop our own identity.
• The identity will develop more credibility.
• When you have identity and credibility size des
  not matter.
• As family jewellers we need to position and
  reposition ourselves.
• Independently we have our limitations.
• GJFs jewellery store certification program
  TrustMark will work for jewellers as an MBA
  degree works for an undergrad.
• Today third party evaluation has more credibility
  than our own.
• A Crisil, Six Sigma, ISO, ISI, Agmark, Hallmark
  have more regard.

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• The worlds largest MNCs have adopted them
  successfully.
• These are the feathers that also show you the
  right direction.
• You may hallmark your products but you cannot
  hallmark your store and image.
• Your competition will have a greater credibility
  and will have excellent rating on day one.
• Study shows that aggregate consumer spending
  could more than quadruple in coming years,
  reaching 70 trillion rupees by 2025.
• Higher private incomes and, to a lesser extent,
  population growth will encourage this rise in
  consumption. Changes in savings behavior will
  play only a minor role.

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• With such growth on the horizon, it is unclear
  which companies will win in most product
  categories.
• Opportunities will blossom as millions of
  first-time buyers step up to cash registers and
  as the bulk of consumer spending moves from
  scattered, hard-to-reach rural areas to more
  concentrated, accessible urban markets.
• Indian consumer spending will shift substantially
  from the informal economy, with its individual
  traders, to the more efficient formal economy of
  organized businesses. That transition will lower
  prices and further boost demand.

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Some stats

• Contrary to popular perceptions, rural India has
  benefited from this growth extreme rural poverty
  has declined from 94 percent in 1985 to 61
  percent in 2005, and we project that it will drop
  to 26 percent by 2025.
• The shift in spending power from the countryside
  to the cities will place the bulk of Indias
  private consumption within easier reach of major
  companies. Today 57 percent of private spending
  is spread across rural areas, but by 2025 cities
  will command 62 percent of the countrys spending
  power.
• In 20 years the shape of the income pyramid will
  have become almost unrecognizable

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• Three-quarters of Indias consumer market in 2025
  doesnt exist todayabout 52.6 trillion rupees a
  year in future purchases will be up for grabs.
• Also, Indias rapid upward mobility means that
  many of Indias households will be new consumers,
  enjoying significant discretionary consumption in
  the organized economy for the first time in their
  lives.
• Incumbents and challengers alike face a sea
  change. Indias incumbents, mostly domestic
  companies, will start with many advantages
  existing relationships with customers, an
  understanding of their needs, and recognized
  brands.
• The incumbents also have established distribution
  channelsvery important in a country of vast
  geography and limited infrastructure.

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• Multinationals must innovate to deliver an
  aspirational middle-class lifestyle to families
  on an Indian budget. Companies that can develop
  new business models, design products with
  carefully targeted features, and create brands
  that appeal to Indias upwardly mobile people
  will attract huge numbers of eager consumers.

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• It said that though China was way ahead of India
  in exports, infrastructure development, foreign
  investment and energy consumption.
• India might surpass it in the long run because of
  its "smart, ambitious, and forward-looking"
  business leaders.
• It is said, India, which was an "economic
  washout" just two decades ago, now has more
  billionaires than Japan.
• The trouble with India is that it is churning out
  billionaires faster than anywhere else in the
  world.
• At least a dozen new names have burst through
  the billion-dollar barrier in the past six
  months.
• This is spoiling the minds of such big giants and
  attracting them to this industry.

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• Mr Ratan Tata doesn't expect Tata to become a
  global brand like Sony or Coca-Cola." But by
  producing the 1 lakh Nano, he has set new
  standards in creativity, which "other companies
  are rushing to imitate, not just in India but
  around the world".
• Referring to the Tatas' legendary honesty and
  strict business values, the newspaper quoted
  Ratan Tata as fearing that the group might
  abandon them once he was not on the scene.
• "I think the day we do that we have lost
  everything," he was quoted as saying.

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• Incidentally, the Ambani brothers, Mukesh and
  Anil, together have been rated by Sunday Times of
  London as the richest in the world at a combined
  worth of 43 billion pounds (85 billion)
• Lakshmi Mittal has become the richest man in
  Europe and sixth richest in the world
• Four Indian billionaires are on the Top 10 list
  of the world's richest people, more than any
  other country can claim.
• India has caught the cold of wealth.

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• The culture, the traditions and heritage of
  countries in Asia like China, India are
  undeniably vastly different to those of the West.
  
• Throughout history, people have traded with each
  other - bartered a surplus of one product for the
  supply of another. And that old saying that "A
  fair exchange is no robbery" still stands.
• In the globalised world of today, business is
  business and culture is something else.

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• "What we're witnessing is the most successful
  secessionist struggle ever waged in independent
  India the secession of the middle and upper
  classes from the rest of the country. It's a
  vertical secession, not a lateral one. They're
  fighting for the right to merge with the world's
  elite somewhere up there in the stratosphere."-
  Arundhati Roy

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• When the principles of the future are
  comprehended, the data from the past will start
  falling in place.

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• Start by doing what is necessary then do what
  is possible and suddenly you are doing the
  impossible.

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What should we do?

• Soch ko badlo to sitare badal jayenge,
• Nazar ko badlo to nazare badal jayenge,
• Kyo badalte ho kashtiyan har roz,
• Dishaon ko badlo to kinare badal jayenge."