Tuesday, July 12, 2011

Overview of Jewellery Industry in India

There are some conflicting figures related to World and Indian Market size. It is due to the fact that the exact size of Indian market is not been estimated correctly. 

Global Gems and Jewellery Market

According to CARE Research, the US is the world‟s largest market for jewellery accounting for an estimated 29% of the world jewellery sales in 2008.The US is followed by China (11%) , India (10%), the Middle East (9%) and Japan (8%) as the biggest consumers. In Europe, the UK(4%) and Italy (5%) are the largest consumers, and Italy is also one of the world‟s largest jewellery fabrication centres. These seven key markets account for about 80% of the total worldwide sales.

According to the CARE Report, global retail sales value of jewellery, including diamonds and gemstones, is expected to reach US$185 billion in 2010 and US$230 billion by the year 2015 growing at CAGR of 4.6% between 2010 and 2015. In 2005, sales totalled US$146 billion and grew at a CAGR of 4.8% between 2005 and 2010 period. During 2009, the world GDP decreased by 0.8% to US$57,228.37 billion while for 2010 and 2011, world GDP is estimated to grow by 3.9% and 4.3%, respectively, according to International Monetary Fund (IMF). Historically, it has been observed that the correlation between the global jewellery sales and world GDP was very high at 0.99.

Of total global sales of US$146 billion in 2005, diamond-studded jewellery was the largest segment, representing 47% of total jewellery consumption. By type of jewellery, diamond-studded jewellery accounted for the largest share of the global jewellery market, followed by plain gold jewellery (42%).

Indian Gems and Jewellery Sector

According to CRISIL Research, the Indian jewellery retailing market is estimated at Rs. 973 billion as of 2009-10, contributing around 6% of the overall retailing industry in India. This makes jewellery the largest contributor of India‟s overall retail industry.Within the jewellery retailing market in India, the share of gold jewellery is estimated to be around 80%, according to CRISIL Research.The two major sub segments within jewellery are gold (22 carat and above) and diamonds, with the former constituting of 80% of the value of jewellery consumption and the balance 20% comprising of diamonds(15%) and gemstone jewellery. The overall size of domestic Gems and Jewellery sector is pegged at Rs. 870 billion as of 2008-09 according to a FICCI-Technopak study and is expected to grow up to Rs. 1,832 billion by 2014-15.

In India, organised retailers account for a mere 4% of the total jewellery retail market.There are about 15,000 vendors across the country in the gold processing industry, with over 450,000 gold smiths spread across the country. There are also more than 6,000 vendors in the diamond-processing industry.

Gold is consumed most in south(37%),west(32%) , north(18%) and east(13%) in that order. In 2009, total Indian gold consumption reached US$19bn or Rs. 974 bn equivalent at the end of 2009. Over the past decade, this has increased at an average rate of 13% per year, outpacing the country‟s real GDP, inflation and population growth by 6%, 8% and 12% respectively.

Gold jewellery demand in India, the world‟s largest gold jewellery market, rose 67% year-on-year to 272 tonnes in the first half of 2010. Over the same period, the average domestic gold price surged to almost Rs.52,800/oz, before hitting a new high of 60,460/oz on October 15, 2010. Gold jewellery accounted for around 75% of total Indian gold demand in 2009, the remainder being investment (23%) and decorative and industrial (2%).

Dimonds are consumed most in West(35%), North(32%), South(25%) and East(8%) - in that order. 

Trends for Gems and Jewellery in India

The growth outlook for the gems and jewellery sector in India is stable and CARE Research expects the domestic industry to grow at a CAGR of 10-12% up to 2015. There is a shift in consumer preference to low priced diamond jewellery which is about 50% cheaper than normal diamonds and also cheaper than pure gold jewellery. Consumers are gradually preferring diamonds because of the guaranteed buy-back schemes, transparent written pricing and, most importantly, third-party certification. Branding and organized retail share will grow in urban markets and the focus on rural markets will increase. According to CARE Research, family owned businesses will need to move towards greater degree of professionalism and trust on the neighbourhood jeweller will be replaced by the hallmarking and certification of jewellery. Apart from that particularly in Jewellery, the following trend shift is observed:

1. Gold Jewellery which traditionally generates its demand from investment viewpoint and traditions, now is regarded as a fashion accessory by the young population. 

2. The demand that used to peak during wedding and festive seasons, now increasingly getting evened out throughout the year for regular wearing and gifting purpose. 

3. Trend is shifting from pure gold-22 caret in traditional designs. More and more now low carat and lightweight jewellery is preferred. Moreover, modern and contemporary designs are finding their way. 

4. Traditionally purchase from neighbourhood jewellers used to dominate purchases, which lacked transparency. Now there is growing preference for brands, retail store and e-retailing. There is an introduction of hallmarking and certification. 

5. Gold jewellery used to dominate. Now there is an increased preference of white gold, platinum and diamond studded jewellery. Even imitation jewellery is gaining acceptance. 

6. Traditionally gold jewellery is sold on prevailing gold price plus labour charge. Now branded players sell on fixed price basis. 

Industry Concerns

Some of the key concerns faced by the jewellery retailing industry, even as it is getting increasingly organized and a branded play, are as mentioned below.

Volatility in raw material prices

According to CARE Research, Indian consumers have a tendency to postpone their purchases until the prices seem reasonable and restrain from panic buying. It has been observed that consumers lay emphasis on stability of gold prices rather than absolute prices of gold to make their purchases. Retailers who quote making charges as a percentage of the raw material cost may be negatively impacted by a significant decline in gold or diamond prices.

Long gestation period

Retailers across verticals typically face long gestation periods for their projects. This is mainly because retailing (including jewellery retailing) is a low margin business. According to CRISIL Research, in case of jewellery retailing, profits earned by large organized players are exclusively on making charges. Apart from this, brand establishment is a long process and according to CRISIL Research it can take three to four years for a retailer to establish a presence in a market, due to the highly fragmented jewellery retailing market.

References


Monday, July 4, 2011

Overview of Women Indian Ethnic Wear Market


The current market share of sarees and ethnic wear stands at Rs. 31,000 crore and is projected to grow at 10 per cent to reach Rs.45,000 crore in 2014.

Growth Drivers
Traditional ethnic wear in India comprises primarily of sarees and salwar kameez and dupatta (SKD) and other regional attire. There are a number of factors that act as a catalyst for the growth of ethnic wear:

Increasing female workforce

In the era of 21st century, education has spread throughout the world and so in India. This has resulted in an increase in the number of educated women which in turn has increased the female workforce. The majority 
of India’s female workforce still prefers to wear the traditional Indian SKD to work. This boom in the service industry has resulted in an increase in the size of the female workforce from 5 million in 2001 to 7–10 million 
in 2010. Therefore, the size of the market for women’s Indian wear has increased and is likely to do so in the future as well.

Personalised designs and styles
In comparison to the western wear, the Indian wear still gives a lot of flexibility in terms of getting personalized designs, cuts and styles made. Majorly the western wear falls in the ready to wear category and the designs and styles are restricted to the available stock with the shopkeepers whereas the Indian ethnic wear is generally tuned to one’s preference specifically design sensibility and fitting.

Traditional occasions and festivals

Traditional occasions like marriages, family functions and festivals are the part of life of an Indian family. On such occasions, Indian wear is still the most preferred choice for most of the women. Majority of women still 
has a large collection of ethnic wear in their wardrobe for various occasions. The purchasing power and the willingness to spend have played a big role in increasing the varied collection in the wardrobe of Indian 
women giving her a flavour of different traditional and contemporary designs.

Current Market Scenario
The current Indian ethnic wear market is highly unorganized with a few branded players operating primarily in metropolitan cities. The organised sector has players like W, Biba, Fabindia, Tacfab, Hakoba, Prafful, Vipul, etc. catering to the low to mid segment. Satya Paul, Anokhi, Meena Bazaar, CTC cater to the premium and super The Indian sarees have never lost its grace, beauty and elegance. This beautiful fashion attire has spanned ages in India, and still exists as the quintessential element in every Indian woman’s wardrobe. The saree in India has constantly changed in looks, designs, styles and fabrics from generation to generation. These sarees are adorned with various embellishments like mirror work, zari, embroidery, zardosi, kundan, pearl work, etc. Inspite of the above modern works, the traditional regional sarees like bandhej, banarasi, patola, kanjeevaram, kantha, phulkari, chikan, etc. are still popular. 

Very popular and widespread Indian attire is the salwar kameez. The changing face of SKD is perhaps the biggest success of this category through the fusion of fabrics, prints, styling and fits. More and more women prefer to wear the Salwar kameez because it is more convenient. This has given boost to the Indian salwar kameez industry too.

Challenges for Ethnic Wear
In spite of the growth factors in the sector, there are a few challenges that market players need to be aware of before entering the market.

A good fit is essential
The good fit is one of the major characteristics for any dress. Indian women body sizes vary a lot across different age groups and regions. For example, North-eastern women are comparatively slimmer than women in north Indian states like Punjab or Haryana. A proper fit of ethnic wear is very important to suit customer requirements across segments. Feasible research on the target segment, well-trained designers and other local 
requirements need to be addressed. Across diverse regions no unified fashion India has rich and varied textile heritage. Each region of India has its own unique native costume and traditional attire and accessories. One 
has to be very careful of the trends prevalent in different regions. A country of India’s size and diversity poses a challenge. Designers and market players must understand all these varied trends and come out with a line of desired products.

Given its flexibility, comfort and traditional appeal, Indian ethnic attire is very much in demand and the market for it poised to grow. Organised players and designers can tap into a lot of opportunities by coming out with a fusion of basic, traditional yet modern styles. Brands can revive age-old prints and traditional/regional apparel further to meet the growing demand from both national and international clients.

Understand the market
The global scene across India shows that the fashion adaption is as diverse as the culture across the country. Indians like to experiment and fuse western wear with Indian designer clothing, adapt western wear with Indian designer clothing, adapt western trends and indianize them as per local trends, they look at film celebrities and designers for inspiration. This factor makes the Indian market all the more complex to understand and dwell in.

Competition from unorganised market
Since the organised market for Indian ethnic wear is still not very big, there is direct competition from the large unorganised sector. Most offerings come from regional stores in different localities, as they are better able to sell products to meet customers’ requirements. 

Read More Here 

Saturday, July 2, 2011

Fashion Design Vs. Fashion Management

Fashion Design Vs. Fashion Management

Here is a mail that I have received. I have changed the mail to suit the need of this subject.

“…I am doing internship at … after second sem of MFM of NIFT…
I am quite confused right now what I should do after this course. I am more confused because I find this course  rather vague.

I am getting more discouraged when I compare the placement potential with my design peers. To give you an example, I have my friend like this girl who did her Bachelor in Design from NIFT.  She is working in an export house. She has a very good designing sense and she is very hard working. From very first month buyers of that export house have started liking her design. I am very sure as company owner is very happy with her so she might get 100% appraisal in just two months.

She told me that in export houses like she is working with, People who come after doing fashion management gets Merchandising post and they don't get appraisals like she is expected to get. The full company runs on Designer's shoulder.

 I do not want to work as a merchandiser in an export house because there designers always remain in limelight and merchandisers rarely are given proper importance.
What should I do?” 

Here is a classic case of basic conflict that is seen in apparel organizations. This conflict is not only observed in export houses but also in retail organizations. Many companies like Shopper’s Stop are merchandise centered. It means there designers have the upper say in anything. However companies like Pentaloon are market led, where Fashion Managers run the show and have a stronger say. The basic reason of this conflict is hidden in the way an organization is evolved and its core competence.

My advice to you, look for a market led organization. There are many in Apparel retail and export house. But, if need be work with such designer-led organization to get a hang of the thinking that is prevalent in such organizations and use them to uplift your career. And then if you grow big, among equals, you can give preference to Fashion Managers than Fashion Designers in recruiting and promoting. 

Some Terms Related to Fashion Industry

Style

It is the characteristic appearance of the garment or accessory. Skirts, for example are a style. But now there is a variation in skirts also which are also referred as style eg. skirts are straight, flared or pleated. Styles do not change, although their acceptance by customers do change periodically.

Taste

A personal feeling about a particular style. When people speak of good taste, they are referring to the appropriateness of a style for a particular use or occasion.

Fashion

It is a style accepted by a majority of a group. Styles likes Flared pants and turtleneck sweaters become fashion only when a majority of the consuming public accepts and purchases them.

Haute Couture

 High Fashion

Pret-a-Porter

Ready to wear premium range collection.

Silhouette

It is a garment shape or outline. There are four basic shapes in women's apparel. They are Tubular ( Fall Straight ),  A-line ( Falls from shoulder extending to hem), Wedge ( Which has greater width in the upper body than the lower body)  and hourglass (It has equal shoulder and hip width and exaggerated waist indentations).

Knock-Off

A garment that has been copied from the design of some expensive item of clothing.

Sources ( Adapted from)
The World of Fashion: Jay Diamond and Ellen Diamond

Some GD Topics for MFM

Here are some of the topics:

1. Comment on the statement "...the fashion world pays lip service to the notion of change, because in truth, it hates change. It likes what it sold yesterday, and to make fashion saleable for tomorrow, it will add a few bells and whistles and surround the whole thing with hubba-hubba seduction...". How retailers and designers will respond to this challenge.

2. "As Consumers are getting older, the fashion searches for the fountain of youth. Not so long ago, young people aspired to look older....But these days, rather than dressing up...women are dressing young...". How retailers and designers will respond to this challenge ?

3. "Powered by technological innovations, internet and globalisation of fashion, the life span of a fashion trend is reducing drastically." How retailers will respond to this trend.

4. "The New Mantra for todays' stores: Time, Space, Quality".

5. "Fashion Designers are venturing into Home Fashions"...."But do the skills that make someone look good at shaping a jacket, for instance, necessarily translate into making tables and chairs..."