Aditya Birla Group Ventures Into Branded Jewellery Retail; An Opportune Time And A Promising Move in India’s Growing Branded Jewellery Market

Aditya Birla Group, a prominent conglomerate in India, has recently announced its entry into the branded jewellery retail business with a substantial investment of Rs 5,000 crore. The conglomerate aims to establish a new venture called “Novel Jewels Ltd” that will focus on building large-format exclusive jewellery retail stores throughout India featuring in-house jewellery brands.

This strategic move marks Aditya Birla Group’s third major foray into a new business sector within the past two years, following its expansion into the paints and B2B e-commerce for building materials domains.

The conglomerate recognizes the potential for growth and sees the jewellery industry as a lucrative opportunity to tap into India’s vibrant consumer landscape. Kumar Mangalam Birla, Chairman of Aditya Birla Group, stated that with the rising disposable income and the aspirations of discerning consumers, there is an increasing inclination towards design-led, bespoke, and high-quality jewellery.

New Ventures, Aditya Birla

The decision to venture into the branded jewellery retail business comes as a direct competition to the Tata Group’s Tanishq, and it highlights Aditya Birla Group’s commitment to exploring new growth engines and expanding its presence in diverse sectors.

In June, Aditya Birla Ventures, the venture capital arm of the Group, participated in a funding round for GIVA, a startup focused on silver jewellery. The Group believes in the substantial growth potential of silver jewellery, both in online and offline channels, and this investment further strengthens its commitment to the jewellery sector.

The branded jewellery market in India has witnessed a notable performance in recent times. With revenue amounting to ₹8,136 crores as of March 31, 2022, Aditya Birla Fashion and Retail Limited’s (ABFRL) fashion brands and retail formats currently operate through a network of 3,487 stores and over 30,000 multi-brand outlets.

During the company’s Annual General Meeting, Birla expressed confidence that the projected revenue of ₹21,000 crore by 2026 would not only surpass the target but also establish higher milestones for the business.

The Market Opportunity, Branded Jewellery

The branded jewellery segment in India has been experiencing significant growth and transformation in recent years. The market has witnessed a shift in consumer preferences, with an increasing demand for branded jewellery due to its assurance of quality, design aesthetics, and trustworthiness. This shift has been primarily driven by rising disposable incomes, changing lifestyles, and the desire for unique and personalized jewellery pieces.

One of the key factors contributing to the growth of the branded jewellery segment is the changing mindset of consumers. Traditionally, Indian consumers preferred gold and diamond jewellery from local jewellers or unorganized retailers. However, with the emergence of branded jewellery players, there has been a notable shift towards organized retail. Branded jewellery stores offer a wide range of designs, transparent pricing, and assurance of quality, which has resonated well with the discerning Indian consumers.

Similarly, branded jewellery players have effectively utilized marketing strategies and celebrity endorsements to create awareness and build trust among consumers. These initiatives have helped elevate the perception of branded jewellery, positioning it as a desirable and aspirational choice.

In terms of market performance, the branded jewellery segment has been witnessing steady growth. Several established players, such as Tanishq, Malabar Gold & Diamonds, and Kalyan Jewellers, have gained a significant market share and expanded their presence across the country. These brands have invested in large-format retail stores, e-commerce platforms, and robust supply chain networks to cater to the growing demand.

Moreover, the COVID-19 pandemic has accelerated the adoption of online channels for jewellery purchases. Branded jewellery retailers have swiftly adapted to this shift by enhancing their online presence and introducing innovative digital platforms that offer virtual try-ons and personalized shopping experiences. The convenience and safety offered by online shopping have further boosted the growth of the branded jewellery segment.

The Forecast
Looking ahead, the forecast for the branded jewellery segment in India remains positive. The segment is expected to witness sustained growth due to several factors.

Firstly, the Indian economy is projected to recover from the pandemic-induced slowdown, leading to increased consumer spending power. As disposable incomes rise, consumers are likely to allocate a portion of their budgets to premium and branded jewellery.

Secondly, the shift in consumer preferences towards branded jewellery is expected to continue as the awareness and trust in these brands further strengthen. Consumers are likely to prioritize design, craftsmanship, and brand reputation while making jewellery purchases.

Additionally, the growing trend of customization and personalization is expected to drive the demand for branded jewellery. Consumers seek unique and bespoke pieces that reflect their individuality, and branded jewellery players are well-positioned to cater to this demand by offering personalized services and collections.

Lastly, the expansion of organized retail infrastructure, both offline and online, will contribute to the growth of the branded jewellery segment.As more branded jewellery stores and online platforms become accessible across tier 2 and tier 3 cities, the market reach will expand, attracting a larger customer base.

Therefore, the branded jewellery segment in India has experienced significant growth in recent years, driven by changing consumer preferences and increased brand awareness.

The segment is expected to continue its upward trajectory, supported by factors such as rising disposable incomes, evolving consumer tastes, and the expansion of organized retail infrastructure. Branded jewellery players have a tremendous opportunity to capitalize on this market potential by offering innovative designs, personalized experiences, and a strong brand value proposition.

The Last Bit, Aditya Birla Group’s entry into the branded jewellery retail business with a significant investment underscores its commitment to exploring new growth avenues. The conglomerate’s strategic move aligns with the evolving consumer preferences and the potential for substantial growth in the Indian jewellery market. With its established presence in various sectors and a strong focus on design-led and high-quality offerings, Aditya Birla Group aims to carve a niche for itself in the competitive branded jewellery segment in India.