Will Jewellery continue to remain relevant for today s youth

Transcription

1 1 Will Jewellery continue to remain relevant for today s youth

2 Youth are at the cusp of change; will Jewellery ride the change or be driven away?

3 3

4 4 Who are today s youth? - By age, anywhere from (National Youth Policy) which is 38% of the population - Students, first jobbers and young parents - Probably a nuclear family with the woman working - A blend of Indian tradition and Western fashion

5 Changing Mindset of the Consuming Base The Age Of Altered Mindsets The Age Of Consumption From belief in karmic destiny to transforming karma From functional needs to esteem/status needs Visible consumption, premium for products with stand out/ bling value Indulgence enjoyment and experience More instant gratification Through the year consumption Fear of being ordinary, but still extraordinary within social norms

6 Two-faced Indian Consumers 6

7 Expanding Consumption Basket Of Goods & Services Food and Grocery 2. Clothing 3. Footwear 4. Consumer durables 5. Home linen 6. Movies and theatre 7. Eating out Food and Grocery 2. Clothing 3. Footwear 4. Consumer durables 5. Expenditure on DVDs and VCD s 6. Home linen 7. Home accessories 8. Accessories 9. Gifts 10. Take-away/ Pre cooked / RTE meals 11. Movies and theatre 12. Eating out 13. Entertainment parks 14. Mobile phones and service 15. Household help 16. Travel packages 17. Club membership 18. Computer Peripheral & Internet Usage Note: The above categories account for 80% of consumer spending 1. Food and Grocery 2. Clothing 3. Footwear 4. Consumer durables 5. Expenditure on DVDs and VCD s 6. Home linen 7. Home accessories 8. Gifts 9. Take-away/ Pre cooked / RTE meals 10. Movies and theatre 11. Eating out 12. Entertainment parks 13. Mobile phones and service 14. Household help 15. Travel packages 16. Club membership 17. Computer Peripheral & Internet Usage 18. Beauty and Spa 19. Gaming 20.??

8 Spending Shifting From Basic To Discretionary The share of food and grocery in the consumer s wallet continue to drop releasing money for discretionary expenditure F&G share expected to decline from 36% in 2008 to 32% in 2013 ource: India Consumer Trends 08, Technopak analysis

9 9 So in summary, we have i. A customer whose attitudes and beliefs are changing and different ii. Willing to spend but the spend basket is increasing iii.planned vs. Impulse spending ratio is changing iv.looking for instant gratification and focusing more on self

10 10 Jewellery Market - Snapshot Large Market - Rs.80,000 Crores ($ 18bn) & 10% CAGR. Plain Gold jewellery is 85% and Diamond studded is 15%. Plain gold growing at 7-8% and Diamond at around 20% p.a. Estimated 300,000 jewellery retailers Organized Retail Share is 0.2% of outlets and 5% of sales i.e. Rs.4000 Crores ($ 900 mn) & growing rapidly Key Player in Organised Retail -Tanishq : 65 % Mkt Share Large Regional /Local Brands Rs.20,000 Crores ($ 4.5bn) Brands like TBZ, Anmol, Notandas, Popley, GRT. Mehrasons,Hazoorilal, Krishnaiah Chetty, Ganjam, PC Sen, Bhima, Joy Alukkas, Josco, Malabar Gold, Alappat etc Unbranded Mass Market- Rs 56,000 Crores ($12 bn)

11 11 Consumer changes - Jewellery Average age of India 25 years Migration Nuclear families Working women Self purchase Adornment vs. investment Brands vs. commodities Brand Communication clamour amidst clutter

12 12 Are we innovating enough? Similar sized markets are Mobile phones (technology) Automobiles (technology/styling) Consumer electronics (technology/design) Transportation (pricing, comfort, speed) Apparel & Textiles (fashion, pricing) And Jewellery (?)

13 Driven by consumer needs and expectations 13 Consumer demands fashion and not investment Consumer demands transparency quality, pricing, exchange, buy-back Consumer demands liquidity for their purchase Consumer demands accessorisation Consumer demands customisation Customer lives in rural and urban India

14 Driven by Stores, merchandise, brands, selling processes 14 Who is the customer? What do they want? Where do they live and where do they shop? Do they buy only from stores? Can we target them through other channels? E-commerce, direct marketing, shows etc Are they buying products or brands? Do they pay a design premium? Can we get out of value based pricing? How can we use technology to run our stores better, stock the right merchandise, help the customer to choose more easily and build a relationship with them? Can we create a luxury experience for a high value purchase?

15 15 Challenges we face - Jewellery as an aspirational category has dropped - Prices have increased when compared to other aspirational product categories - Purchase occasions are religious or wedding/birth, all of which are planned - Key Purchase Differentiator is Price

16 16 Normal Purchase occasions Gold as an investment Gold as adornment Semi-precious stones for astrological reasons On religious occasions

17 How do we create jewellery as a fashion rather than a functional need? 17

18 18 Brands and Advertising - Retail presence and accessibility - Design focus and Product innovation - Events, promotions and product stories

19 Jewellery has remained as the product of desire for women across centuries. This legacy is our responsibility 19

20 Thank You 20