Aditya Birla Group to take on Tata, Reliance now in the branded jewellery space

• Aditya Birla group said that it will build large-format jewellery stores across India.
  
• Aspirational consumers are leaning towards design-led, bespoke jewellery, said Kumar Mangalam Birla, chairman, Aditya Birla Group.
  
• This is the group’s third major foray into a new business in the last two years.
  

The Aditya Birla Group on Tuesday said it’s all set to foray into branded jewellery retail business, with an investment of ₹5,000 crore. Housed under a new venture called ‘Novel Jewels’, the metals-to-cement group has said it will build large-format exclusive jewellery stores across India, with in-house jewellery brands.

“With rising disposable income, discerning and aspirational consumers are leaning more towards design-led, bespoke, and high-quality jewellery. This venture will capitalise on Aditya Birla Group’s deep expertise in lifestyle retail and nuanced understanding of consumer preferences,” said Kumar Mangalam Birla, Chairman, Aditya Birla Group.

This is the group’s third major foray into a new business in the last two years after paints, and B2B e-commerce for building materials. The company said that it intends to create an aspirational national brand with unique designs, and a strong regional flavour.

Competition to heat up

The branded jewellery market is already heavily competitive — not the least due to the presence of India’s largest business groups — Tatas with Tanishq and RIL with Reliance Jewels. This is in addition to large players in the business like Kalyan Jewellers, Joyalukkas, Malabar Gold and Tribhovandas Bhimji Zaveri.

Traditionally, the jewellery business was majorly dominated by small and medium sized players. However, that’s been changing and pivoting towards organised players. According to a World Gold Council report, the share of small retailers was at 50% in 2015. It has fallen to 37% in 2021.

Regulatory changes like GST, demonetisation and hallmarking are also driving more footfalls towards organised jewellery retailers — which are growing at the expense of standalone players.

More importantly, consumer behaviour is changing too as they seek better designs and pricing structures and demand good after-sales policies — all which larger, branded jewellery chains can provide better.

Online sales of gold account for only 3-5% of the total jewellery sales value. This could also double to 7-10% in the next five years, according to the World Gold Council.

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