Technavio estimates that between the years 2022 and 2027, the jewelry market in India will expand by $21.54 billion. This estimation is based on an impressive forecasted compound annual growth rate (CAGR) of 5.54%.
Technavio is a tech research and advisory company that focuses on emerging market trends to help businesses locate and optimize up-and-coming markets. Right now, Technavio has over 17,000 research reports on over 800 tech topics across 50 countries.
Technavio’s forecast on India comes from in-depth research and market trends. The report focuses on industry influences, drivers, trends, and the overall market.
The primary factors driving India’s jewelry market growth according to the report include increasing income levels, the cultural significance that jewelry carries, and technological advancements. Technavio specifically mentions the growth of gold demand in India contributing to the trend.
“The market growth in the gold segment will be significant during the forecast period. The rising income levels of consumers have increased the demand for gold jewelry in India. Despite the development of alternative materials and designs, gold jewelry is still worn on special occasions and is a preferred investment option in India. As a result of these factors, the segment will witness maximum growth over the forecast period,” the report states.
While the jewelry market may be on the rise in India, Technavio notes in the report that the market is highly fragmented. Both international and regional vendors are competing against one another to provide the best quality, pricing, and reach, though, of course, the smaller, local dealers cannot match the major corporations. The international companies continue expanding their reach in the market, pushing all players to improve their innovations.
A few of the top jewelry vendors analyzed in the report include ALANKEET CREATIONS LLP, Bhima And Bullion Pvt. Ltd., Derewala Industries Ltd., and Hari Krishna Exports Pvt. Ltd. Each of these companies offers a range of products, including gold, diamonds, necklaces, earrings, etc.
In the report, Technavio outlines key market drivers, trends, and challenges in India’s market right now and moving forward. Understanding such can help investors learn how the market may change in the next few years.
Starting with the key drivers, India’s retail market is primarily influenced by the strong cultural significance that jewelry holds. Gold jewelry carries a significant symbol of wealth and prosperity. Because of this, during various celebrations, like weddings, festivals, and other auspicious events, the Indian market buys gold at increased rates as individuals gift their loved ones with the significant symbol of long-term wealth.
The wedding industry in India alone is valued at $50 billion with jewelry accounting for a major portion of this total. India is the second-highest gold importer in the world because of these factors.
With festivals like Akshaya Tritiya, Dussehra, and Diwali all celebrating gold purchases, demand rates for jewelry surge throughout the year. India’s demand for jewelry continues growing each year because it’s ingrained in its culture.
Moving on to Technavio’s forecasted upcoming trends, the report outlines the potential for online retailers to boost jewelry sales even more. “Factors such as convenience and the ability to choose from a wide selection of merchandise have increased consumer inclination toward online shopping,” the report states.
Online shopping also allows customers to compare prices more easily. Vendors like Tanishq increased sales by 106% in 2020 by selling products online. “This trend is expected to positively influence the market growth over the forecast period,” the report continues.
When discussing key challenges, Technavio outlines the rising price of gold.
“Gold is an important component of Indian Jewelry. However, the sales of gold jewelry are declining as a result of the difficulty faced by jewelers in maintaining competitive pricing caused by continuous fluctuations in prices,” the report explains.
Technavio discusses how buyer habits are shifting to prefer more affordable, lightweight jewelry, which is impacting traditional gold retail sales. If this trend continues, the forecasted growth outlined above may not be achieved.
How the next few years play out is still uncertain, though what we do know is that gold plays a key role in India’s culture. Each year, the nation buys exceptional levels of gold, local demand rates rise, and the precious metal typically performs well.
In the future, we could see gold gaining more attention in the Indian market as it becomes more easily available and online sales increase. However, the prices could deter some buyers.
Investors can use the full report provided by Technavio to inform their portfolio strategies but should always consult their advisors for financial advice.