Posted by: commoditywise | December 19, 2007

IIJMA eclipse India’s bullion jewelry market

I

t was an unexpectedly joyous visit to the10-floor jewelry shopping complex in Mumbai for Monisha Lambah, the 30-year plus executive of a BPO. Ms Lambah wanted to buy some jewelry for her own to wear during the marriage of her friend in Chennai. 

No, Ms Lambah did not prefer to buy the heavy and staid pure gold jewelry that was also costly compared to the one that she went to buy. And within few hours of browsing at this new 10-storied jewelry shopping complex, Ms Lambah bought for the occasion `jewelry’ worth Rs 6,000!! If she were to buy pure gold / and or silver jewelry, she would have had to pay more than Rs 200,000!!!  

Currently, a large section of Indians are in the midst of the bi-annual gorgeous and boisterous marriage season. The current marriage season that began in November will continue till February next year. But the gainers of this season are not the traditional gold and silver jewelry makers, India’s famed multi-billion bullion jewelry market is losing attraction from the buyers and therefore, is forced to be on the look out for a stronger hook. 

Increasing number of retail buyers – mainly from the marriage families – are turning away from the gold and silver jewelry to more attractive but also cheaper varieties of imitation and fashion jewelry. And aiding and whetting their appetite for cheap, trendy and attractive fashion jewelry are the dozens of soaps on the idiot box!! Also, the ever rising prices of both gold and silver used for traditional jewelry that the bride’s parents usually give to their daughters as part of the custom aimed at giving the bride some gold that she can use in times of distress sometime in the future – as an economically safety product.

These days, depending on the quality 10-gram gold costs around Rs 10,000-11,000 and one kg of silver costs over Rs 19,00-20,000 – but the quality is usually questionable in both the cases. 

And it is not that the lure of gold jewelry has dipped only in the domestic markets. Even the export of the gold jewelry usually made from of 16-18 carat gold has slipped. Hit by the stronger rupee, the gold jewelry exports during April – November 2007 have slipped by four per cent from the same period last year, latest figures from the Gem and Jewelry Export Promotion Council (GJEPC) show.  

Little wonder therefore, the 1,000-plus members of the India Imitation Jewelry Manufacturers’ Association – IIJMA – are a happier lot. And their clan is expanding fast spreading their reach across large section of India’s bustling metros and mini-metros. The high profit margin from the manufacture, sale and exports of imitation and fashion jewelry have enriched and emboldened them so much that they have collectively contributed to erect a huge10-floor imitation jewelry – IIJMA House – in one of the bustling western suburb of Mumbai, India. 

This lure of imitation jewelry has been there for decades. The imitation jewelry usually came from parts of Gujarat like Rajkot, Surat and Ahmedabad. Such fashion or imitation jewelry was no-no socially when gold was relatively cheaper. But since the price of both gold and silver have begun to rise and has already crossed the reach of common man and his wife and supported by the almost captivating soaps on the idiot box, these days the lure of fashion and imitation jewelry is vastly acceptable, such that women of even well-to-do family boldly flaunt their `riches’. The attractiveness of both designs and price has spread far and wide across most of the metros and in Mumbai, there is a whole set of unorganized industry for imitation and fashion jewelry. 

The traditional bullion jewelry makers and sellers may be cursing these new trendy jewelry makers and suppliers. But their own brethren are also increasingly pushing the one gram plated pure 24 carat gold jewelry that the buyers are also lured away from pure gold and silver jewelry. So what if the golden sheen of this new type of jewelry lasts only for two years? Anyway, Indian women are known for their short-term love affair with their 2-3 year old jewelry and are frequently attracted to buy new jewelry every couple of years, largely replacing their old jewelry. 

The premises of the IIJMA building are either owned by the exporter / traders or are leased out. Usually such places are meant only for commercial and wholesale trade. However, given the massive jump in demand for imitation and fashion jewelry, the numbers of makers and suppliers too have increased substantially during the last one year. This trend has therefore, lured the owners of the premises at IIJMA to partly increase their sales by keeping their IIJMA premises open for almost 10-hours every day also for the retail buyers. 

The price of both the imitation and one-gram gold plated jewelry is almost one-tenth of the supposedly pure gold jewelry. And the varieties of fashion jewelry are simply marvelous compared to intricate but staid and heavy jewelry of the yesteryears that the buyers and owners of pure gold and silver jewelry are forced to tuck it away in the safe deposit vaults of home / banks. 

Yes, the Indian bullion jewelry market is fast being eclipsed by the new, aggressive and cheap competition from the extremely attractive imitation and fashion jewelry now increasingly available almost at all the shopping malls mushrooming all over the metros. The decades old lure of the golden clasp of pure gold and silver jewelry is getting loosened faster than the traditional jewelers had expected.

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