India’s largest retail jewellery chains are set to increase their market share in gold jewellery from 37% to an estimated 45% in the coming years, supported by the addition of approximately 500 new stores by the top five chains over the next two to three years.
Major Investments and Store Openings
Key industry players such as Tanishq from the Tata group, and other prominent names like Reliance Jewels, Kalyan Jewellers, Malabar Gold & Jewels, and Joyalukkas are planning significant expansions. The Aditya Birla Group is also entering this competitive market with a Rs 5,000-crore investment in its new brand, Novel Jewels.
Digital and Physical Expansion Plans
Kalyan Jewellers is planning to open at least 130 new outlets in fiscal year 2025, with 80 physical stores and 50 under its digital-first platform, Candere. This follows their expansion in fiscal 2024 where they added 71 stores. Similarly, Titan’s Tanishq brand increased its store count by 27 in the last quarter, and CaratLane added 10 new stores.
Smaller Chains Seeking Growth
Smaller and mid-sized jewellery chains are also expanding, particularly in Tier 2 and 3 cities. Many are considering public offerings to fund their expansion, as highlighted by Surendra Mehta, national secretary of the Indian Bullion Jewellers Association.
Economic Factors Driving Demand
The backdrop to this expansion is a robust economic environment where the number of ultra-high-net-worth individuals in India is expected to increase by 39% by 2026, and those with assets of at least $1 million are projected to grow by 77% within the same period, according to a report by Knight Frank. This increase in wealth is set to sustain and possibly boost the demand for gold and jewellery.
Capital and Inventory Challenges
The leading chains are preparing for their expansions by stocking up on gold, with requirements estimated between 30-50 tonnes. However, financing these expansions remains a challenge due to past issues of fraud within the industry, prompting many to seek capital through public markets or the SME segment of stock exchanges.
Industry Implications
The ongoing expansions and strategic shifts are likely to influence competitive dynamics in the Indian jewellery market, promoting more organised business practices and potentially higher operational standards across the industry. As market conditions evolve, all industry participants will need to adapt to these changes.
