The word jewelry is derived from ‘Jewel’, which means a plaything. A Jeweller is a person who makes, sells and repairs jewellery. In India, the person who makes jewelry pieces in gold metal is known as the goldsmith. The basic form of jewelry usually differs from one culture to another culture and even from one country to another country.
Jewelry can be made out of many things ranging from gold, silver, platinum, diamond, emerald, pearls, gemstones, ruby, sapphire, coins, glass, wood, shells, natural clay, beads and so on. It can be handmade or machine made. The handmade jewelry pieces cost more as compared to the machine made jewelry. Jewelry is used as a tool to showcase status in the society.
Jewelry consists of small decorative items worn for individual adornment in the form of rings, necklaces, bracelets, chains, bangles, pendants, brooches, cuff links, toe rings, mangal sutra and so on. It may either be worn by the individual or can be attached to the clothes. In India jewelry is made of amber, gold, jade, silver, platinum, amethyst, precious stones, Jasper, emeralds, ruby, diamonds, quartz, turquoise and the list goes on.
In today’s era, jewellers are not only designing patterns for women, they have an exclusive range of jewelry collections for even men and children to suit their requirements.
The demand for gold jewelry in India is high and the country occupies the second position in the world in terms of consumption of the yellow metal.
To create a piece of jewelry, it has to go through a sequence of the process which includes melting, cutting and shaping. This will lead to some amount of the wastage of the ornamental metal, as the perfect pieces are joined together to get a single piece of well-designed pattern of jewelry, this is called as wastage of metal on which the jewellers will levy a charge and the buyer has to pay for it at the time of buying the jewelry piece and this is called as wastage charges. The wastage charges usually differ from one jewelry piece to another and even from one jeweler to another.
The making charges on a jewelry piece include the cost which is incurred in the process of producing and designing. For example, Gold is found in a metal form, which has to undergo several processes before it is converted into a piece of jewelry and this brings in about such a charge. Making Charges are also referred to as labor charges.
India has a great love towards gold jewelry. The desire to buy gold among Indians has made the country the third largest jewellery market in the world followed by China and the United States of America. India consumes around $50 billion worth of gold on an annual basis.
The country witnesses around 8-10 million weddings on an annual basis which contributes to more than 60% of the jewelry demand in the country. Chains and Bangles are the most popular items sold across the country.
In India, people spend mostly on bridal jewelry and it constitutes 60% of their spends, followed by daily wear which contributes to 30% of spending and 10% of spending is on the fashion or trendy jewelry pieces.
Gold is considered as a status symbol in India. People believe that it is auspicious to own gold. Apart from this, it is also considered as an asset. Most of the Indians spend a significant proportion of the wedding budget exclusively on the purchase of jewelry. Females in India consider it as an important mode of saving the money through the purchase of gold. If a girl baby is born into a family in India, people start buying gold for her wedding and the process begins starting from her first birthday.
By 2020, India’s demand for gold is likely to cross $95 billion. By 2020, India’s demand for gold is likely to cross $95 billion. Currently, the regional and national chain of jewellers in India is growing in a phenomenal way and constitute up to 30% of the market.
The following are the factors that have made gold more affordable for Indians:
1. The current GDP growth of the country is more than 7% which has, in turn, increased the purchasing power of the individuals in India which has made gold more affordable for most of the people.
2. Around 65 percent of the population in the country is below 35 years of age and demand for purchase of gold is more amongst the youngsters as compared to the old age people.
3. Raise in the disposable income, technology, introduction of various brands is making a customer to prefer branded ones over the local jeweler.
4. Availability of financing options.
BIS Hallmark is a system used for certifying the purity of metal mainly used for gold and silver jewellery in India. It certifies that the piece of jewelry is as per the set standards indicated by the Bureau of Indian Standards.
BIS Hallmark consists of the following components:
• BIS logo (a triangular shape logo)
• The purity of gold – 22K916 for 22 karats, 18K750 for 18 karats, 14K585 for 14 karats
• Logo of the assaying center
• Code or logo of the Jeweller
Gold Schemes is a savings scheme offered by the jewel to help the aspiring customers to buy the jewelry of their choice by saving a set amount of money on a monthly basis for a particular period of time and postmaturity they can buy the ornamental piece of their choice which is equivalent to the total deposited money which also includes the bonus money, if any. Due to the high prices, people may find it difficult to buy jewelry at one go, to reduce the burden faced by the customers, most of the jewellers in India has come up with gold schemes to help them make a smart buying.
Some of the popular gold savings schemes are GRT Golden Eleven Flexi Plan, Golden Gain Plan from Malabar Gold & Diamonds, Kalyan Jeweller’s Dhanvarsha, Golden Harvest Scheme by Tanishq and so on.
We all are aware that prominent companies in India have listed themselves in the stock exchanges and has thus become public listed companies. Some of the jewelry houses in India have also followed the trend by getting themselves listed in the stock exchanges, a few among them include PC Jewellers, Tribhovandas Bhimji Zaveri, Rajesh Exports, Vaibhav Global, Tara Jewels, Uday Jewellery, Thangamayil Jewellery Limited, Swarnsarita Gems, Radhika Jeweltech.
The most prominent stocks which are currently in trend includes Tara Jewels, Tribhovandas Bhimji Zaveri and PC Jewellers.
In India, the prices of gold tend to change depending on the global prices. Any change is it positive or negative in the prices of the ornamental metal in the international market will directly affect the prices of the yellow metal in the domestic market. The prices of gold in the international market is mainly attributed to the value of the dollar, interest rates, inflation rates, currency fluctuations, demand and supply level, economic situation and so on.
For example, The value of gold and the U.S. dollar share an inverse relationship. Any decline in the value of the dollar will result in the hike in the prices of gold and vice-versa.
The physical demand for gold also plays a key role in determining the prices of gold in the country. The central banks usually purchase gold and rarely sell them to avoid disruption in the prices of the yellow metal. The United States has the highest gold reserves in the country across the globe.