Indian Gold Book:Indian Gold Book - Gold Bars Worldwide
Indian Gold Book:Indian Gold Book - Gold Bars Worldwide
Indian Gold Book:Indian Gold Book - Gold Bars Worldwide
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TRADITIONAL JEWELLERY RETAILERS<br />
ANTICIPATED CHANGES IN THE DISTRIBUTION NETWORK<br />
Most traditional retailers expect the jewellery distribution network to evolve over the next 10 years, although<br />
most stress that the rate of change is likely to be gradual. They expect large showrooms to increase their<br />
share of the jewellery market.<br />
Large showrooms will become increasingly dominant in major cities.<br />
The rationale of large retailers is that their large inventories, wide range of innovative jewellery designs and commitment to<br />
promotion will attract more and more of the emerging middle class. Their high profile and prestige will increasingly<br />
reassure customers that are concerned about product quality. The new generation of well-educated (many universitytrained)<br />
family members will also ensure that showrooms adopt improved business and marketing practices. They will also<br />
be better equipped to respond to changing consumer needs and preferences.<br />
Large showrooms in smaller cities will become more sophisticated, and more large showrooms will be<br />
established in major towns and important villages.<br />
There will be a natural evolution. Growth in the size and number will be driven not only by resident retailers, but also by<br />
new entrants (some from outside the city, town or village) opening or franchising new showrooms. This development is<br />
likely to erode over time the sales growth of retailers in those cities that have many “outside” customers.<br />
Some traditional retailers will establish well-branded small regional or national chains of wholly owned or<br />
franchised showrooms.<br />
During the 1990s, many large retailers opened new family outlets within their cities.<br />
Several are now aware that there are opportunities to establish or franchise sophisticated new showrooms in smaller cities<br />
and large towns within their State and nationally.<br />
An important motivation is that competition within major cities is so intense. Another is their view that high growth in the<br />
jewellery market is more likely to occur outside the major cities.<br />
Some have already opened or franchised new showrooms in smaller cities and large towns. Several others report that they<br />
are planning to do so.<br />
However, there is likely to be a contraction over time in the number of traditional retailers nationwide.<br />
Although few outlets have closed down in recent years, the trade expects some contraction to take place across all outlet<br />
categories.<br />
The timing and extent of contraction will be much influenced by the extent to which the gold jewellery market will grow. Its<br />
overall growth has been limited since 1998.<br />
Large showrooms. Vulnerable showrooms are those that are not prepared or not able to adapt to an increasing level of<br />
competition, especially in large cities. The overheads of large showrooms are high.<br />
Medium-size retailers (150 - 300 g daily). Notably those in cities where there are many large showrooms. The trade observe<br />
generally that this is the category most at risk.<br />
Small outlets (less than 100 g). Contraction is likely to be variable. Many small outlets will continue to prosper, servicing<br />
the poorer communities in cities, towns and villages.<br />
They also expect some contraction to occur in the clusters of traditional outlets in some city locations where there is<br />
substantial traffic congestion. In large cities, suburban clusters will become increasingly important.<br />
Traditional jewellers are also aware that, as a category, they will lose market share to non-traditional branded jewellery retail<br />
chains being established nationwide in department stores and shopping centres, and as stand-alone outlets.<br />
Although the retail chains (covered in a separate section) are still at the experimental stage, and their combined volume is<br />
less than 1% of the jewellery market, they are expected to erode the sales of traditional retailers in many cities over time.<br />
AN INTRODUCTION TO THE INDIAN GOLD MARKET 111