Indian Gold Book:Indian Gold Book - Gold Bars Worldwide

TRADITIONAL JEWELLERY RETAILERS
There are approximately 300,000 “traditional” gold jewellery outlets. They are family-owned businesses.
Less than 15,000 family retailers may account for 30% or more of gold jewellery sales nationwide.
The exchange of old jewellery, coins and bars for new gold jewellery and buy backs for cash are standard transactions.
Dishoarding may have supplied more than 40% of gold used to fabricate new jewellery in 2001.
Large retailers report that their inventories have increased by 20 - 50% over the past 5 years. The inventory stock in
total is unlikely to exceed 400 tonnes of fine gold.
Many large retailers report that their profit margin on gold jewellery sales has fallen.
Large showrooms are expected to increase their share of the jewellery market. The distribution network is expected to
contract over time.
BACKGROUND
Family-owned jewellery retailers are generally categorised as “traditional jewellers”.
The term is misleading as many are at the forefront of innovation.
Although they may operate under the same names, especially in large cities, the outlets tend to be owned and run as
separate and loosely associated businesses by fathers, sons, brothers, nephews, cousins and other close relatives.
In their role as jewellery retailers, they act as dealers. They buy back and exchange jewellery at prices linked to the
prevailing gold price. They also retail and buy back coins (and bars, if requested).
Many are involved in other jewellery-related businesses and activities: fabrication, wholesaling, refining, coin fabrication and
bullion dealing.
Some large retailers in metropolitan and smaller cities also own showrooms outside India, mainly in the Gulf countries, but
some also in Europe, the USA and elsewhere.
Many large retailers also have non-precious metal related businesses. Many retailers sell jewellery as an ancillary product.
NUMBER
Since the repeal of the Gold (Control) Act in 1990, the number of jewellery outlets appears to have grown
from 16,000 to approximately 300,000.
Since the last Gold Control Statement in 1989, no statistics have been available. Trade estimates vary greatly from 250,000
to several hundred thousand.
Even within major metropolitan cities, trade estimates vary widely. In Mumbai, for example, estimates range from 4,000 to
more than 10,000.
The reason for the range in estimates is due mainly to the “uncountable” tens of thousands of very small outlets that have
been established in cities, towns and many villages throughout India since 1990. Outlets that only sell silver or imitation
jewellery also tend to be included.
Retail distribution increased rapidly due to 4 main factors.
• Many of the 380,000 goldsmiths, certified in 1989, became small retailers, especially in suburban and rural areas.
• Many thousands of pawnbrokers also started to retail gold jewellery.
• Many retailers, licensed in 1989, were well positioned to establish new outlets for other family members.
• Many families, without previous experience, were encouraged to become jewellery retailers as it appeared to be so
profitable.
Although new outlets continue to be opened, retailers in most States refer to the rate of overall expansion having eased
since 2000.
To provide some indication of the number of outlets in cities, towns and villages, the following are anecdotal trade estimates.
The extent to which large urban retailers include smaller outlets in their cities varies.
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AN INTRODUCTION TO THE INDIAN GOLD MARKET