No slowdown will slow down jewellery industry: Anil Talwar

Anil Talwar, Managing Partner, Talwar Sons Jewellers, Chandigarh speaks his mind on the current situation in the gems and jewellery industry. He feels that the slowdown fears are exaggerated.

–Manoj Chakraborty

Of late, the economy has been on a downturn, and there is a slowdown in almost all industries. But that does not necessarily mean that the jewellery industry is also in the doldrums. People keep expressing fears that businesses will close down and markets will crash. But I feel these fears are exaggerated.

Yes, it is a fact that many jewellers are in distress, but the overall market is not doing too badly. The organized players, especially, are faring very well. They are not facing the brunt of the poor market conditions. The very fact that they are expanding their operations in Tier 1 and Tier 2 cities bears testimony to that. Had the slowdown been as severe as it is made out to be, big jewellers would not have been opening new outlets.

The current market conditions have actually helped to weed out unorganized industry players who failed to keep up with the times and did not evolve to keep pace with changing trends. The loss of
unorganized entities has become the gain of organized players, who offer more choice and better quality. The days of parents dragging their kids to old-fashioned jewellery shops are over; now, the new generation dictates purchases and prefers to shop in outlets of its choice, namely, the organized and new-age retail ventures.

Yes, some jewellers have had to shut their shops, and I think that is a blessing in disguise. Unorganized, inefficient players have been edged out and better-organized companies have grabbed their market share. You can draw some similarities with the garments industry. Many readymade garment retailers closed their operations, not because the demand for readymade clothes fell, but because consumers migrated to better brands that offer quality products.

A similar transformation is taking place in the jewellery industry. There is no slowdown in jewellery purchases. It is just that bigger and more organized companies have taken the place of smaller,
uneconomic and unviable enterprises. The industry has to be prepared for future challenges. The market will keep on changing, and the industry will have to adapt to the changes.

The Indian jewellery industry has a problem of living in the past. Many players think that they can continue to function as per the old paradigm and profits will roll in. But that is not the case anymore. The industry has to adapt to the new normal. The demand for jewellery is not going to go down as people will keep buying it, no matter what. In fact, owing to the growing population, the demand can only go up. And those brands that understand the needs of the new generation will be able to survive a slowdown.

But for this to happen, the industry has to take some steps. For starters, the sales structure needs to be reformed. Industry players have to give serious thought to their business model. They have to plan for the future. They have to ask themselves whether what they are doing now will be relevant, say, five years hence. If not, then the time to change is now, not later, when the business starts to fail. You have to have a sense of what will work for your business in the years to come. In the end, the industry has to remember this – the past is over, the present is different, and the future will be even more so. Get future-ready now.