Is it not a marvel that India, a developing nation, is the largest consumer of gold in the world? It is certainly true that Indians can never have enough gold. The gems and jewellery industry in India is sparkling with huge exports and local consumption.
Opportunities:
The precious jewellery business in India was largely a family run business in India like most of the other businesses. Recently the sector has become more organized and all major brands are expanding rapidly. There are many opportunities to enter the jewellery business through a franchise.
The opportunities range from famous brands with strong brand identities and also a lot of single store outlets are opening franchise stores in new locations. Looking closely at the market and the players you will realize that there are many market segments such as modern, light-weight jewellery to traditional designs with intricate artistry.
Retaining market:
With the advent of online stores for gold and diamond jewellery, customers are spoilt for choice. The jewellery industry in India is in a unique space where the customers want change but are loyal to their generations-old family jewellers. This is proving to be the major boost for the franchise business. The old businesses can retain their loyal clientele and continue to serve them satisfactorily
Universal market:
Another interesting fact in this industry is that the buyers of precious jewellery are spread out over all the cities of India. Tier II and tier III cities and small towns have as many buyers as the metro cities. In fact, big jewellery brands admit that the market in non-metros is more stable and thriving whereas buying trends in metro cities depend on gold prices and also fashion fads.
It is easier to open a franchise in a tier-II or tier-III city. Family run businesses that want to invest in a jewellery franchise become good franchisees because they have the experience, connections and most importantly, the trust of local customers. It is a good investment for the traditional jewellers because they are in familiar territory and are actually looking for the training support, technology, digital marketing support, and design input that the organized franchise business brings with it. There are other inherent benefits, for example; a traditional jeweller has a lot of dead stock which no customer is willing to buy but a jewellery franchise will replace all the dead stock within a few months.
Skill:
Jewellers have closely guarded the art and techniques of making unique traditional jewellery such as Thewa jewellery of Rajasthan. Even otherwise artists usually do not have any formal training and thus, they are not able to make a wide variety of jewellery. There use of technology for design development and production is minimal. This has led to a situation where customers are looking for reliable brands where they can buy from a wider variety of contemporary designs with an assurance of quality.
Market demand:
Gone are the days when you could predict an Indian woman’s ethnicity by her jewellery or dressing. Modern Indian women have a higher appreciation for authentic traditional designs as well as designer jewellery which reflects their changing attitudes and profiles. While temple jewellery trends ruled, solitaires were also desired. From black pearl studs to platinum rings, the variety in precious and semi-precious jewellery is increasing. Their buying preferences are changing greatly too. Instead of heavy ornaments, light and comfortable jewelles that give a cool look are preferred. As they say, they look for a statement of style. This has become a great advantage of the jewellery franchises.
Marketing:
The franchise businesses are able to associate famous jewellery designers with their line and launch eye-catching marketing campaigns to stand out from the rest. On the other hand, they invest heavily in digital marketing through social media, fashion blogs, and even e-commerce works to their advantage. This kind of marketing involves huge marketing costs. It would be impossible for standalone businesses to get the customer’s attention with this kind of competitors vying for it.
Investment:
While the initial franchise outlets were all a grand show, now there are more varieties of fixed formats of the jewellery business. The budget required for investing in a jewellery franchise ranges from INR 20 lacs to INR 2 crores. Those targeting young women to sell silver jewellery require a lower investment.
The preferred locations for retail outlets remain highstreet or malls. Many continue with a branding that inspires customers to relate the product to luxury and grandeur. Many are projecting a more down to earth but stylish and cool image. They even design customer experiences accordingly. The most successful franchises are shifting towards making customers more at ease and encourage customers to try out the precious jewelles.
The market for precious and semi-precious gems and jewellery is changing fast in India. Those who will be able to continuously evolve with changing tastes and attitudes will emerge as the market leaders. The franchise business model can be deemed to be a clear winner in this scenario.
If you are considering buying a franchise in this sector, make an in-depth study of the business model. Investment, sourcing, training, marketing matter a lot in the profitability, Return on Investment and the time taken to break even. Selling jewellery will need a good sales pitch based on actual knowledge of trends, design, and quality.
Though a good brand name will bring in the customers, it will be up to you to maintain the brand values relating to quality and service. Buying jewellery is never a spontaneous decision and hence the influencers of buying decisions will matter a lot. An entrepreneur who realizes this will strive to retain his valued customers and provide them excellent service.
Production of jewellery is now usually mechanized but customized jewellery will always be in demand. This option is also offered by the established franchise brands but a study of the complaints on consumer forums shows that this segment needs a lot of improvement in service standards and product development too. Often, these problems dissuade buyers from franchise businesses while buying jewellery. Even well-known franchises are facing these problems. Before making a decision, consider well the availability of skilled jewellers.
Franchise business in jewellery looks like an excellent proposition but keep in mind that each brand has a different model. The target markets and marketing approaches are also different in each business. Try to understand each model in detail. A business model that matches your investment capacity, targets a market segment that you can penetrate on your own and enables you to offer excellent customer services that should be sorted out from the rest. Thereafter, you can assess the competition to be faced in specific locations. With a careful analysis of the costs and benefits of each aspect of franchise business you can delve further into acquiring a franchise.
Since there are already many well-known brands that are willing to expand in all locations, take the help of a franchise consultant. It will save you a lot of time. He will be able to guide you regarding all the options available in a particular location. He will also help you to sort out your priorities and requirements before suggesting a particular brand that has a business model to match your needs. You will be guided in honing your profile as a prospective franchisee candidate.
Well, good luck with your treasure hunt!