The Aditya Birla Group on Tuesday said it was entering the branded jewellery retail business, taking on the Tata-owned Tanishq chain of stores, which is part of Titan. The group has set aside an investment of `5,000 crore for the new venture, called Novel Jewels, which marks the company’s third foray into new areas in two years. It had earlier announced its entry into paints and B2B e-commerce for building materials.
“This foray is a strategic portfolio choice that allows us to tap into new growth engines and expand our presence in the vibrant Indian consumer landscape,” chairman Kumar Mangalam Birla said.
The announcement comes at a time when the branded jewellery market is seeing a gradual shift from unorganised to organised, say experts, as consumers seek quality products from reliable and trusted players.
A recent Crisil report says that branded jewellery retailers would continue to maintain their growth trajectory in FY24, like they did in FY23, when revenue growth was in the region of 23-25% over the previous year. The growth would be driven by wedding and festival demand, as the Covid-19 years were marked by lockdowns and postponement of marriage plans.
The Aditya Birla Group said that it was seeking to transform customer experience by creating an aspirational national brand with unique designs and a strong regional flavour.
“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,” Birla said.
The jewellery venture will be operated by a newly recruited leadership team with deep retail and category expertise, he said.
India’s $78-billion gems and jewellery market contributes approximately 7% to GDP and 10-12% to merchandise exports. But it is dominated by unorganised players, who constitute around 70-75% of the market, according to industry experts. While the gems and jewellery market is projected to grow to $90 billion by 2025, the share of unorganised players will reduce slowly, say experts, as more organised groups step into the category.
Apart from Tanishq, which is part of Titan, some of the other players include Reliance Jewels, Kalyan Jewellers, PC Jewellers, Joyalukkas, Senco Diamonds and Malabar Gold and Diamonds.