Three leading Indian jewellers figure in the list of Global Top100 largest luxury goods companies compiled by Deloitte along with a report on the opportunities and challenges faced by the sector globally. Yet the study also indicates how much catching up Indian companies still have to do.
The latest edition of the annual Global Powers of Luxury Goods report published by Deloitte Touche Tohmatsu Limited has some good news for the Indian jewellery industry - three of its star performers viz Titan, Gitanjali Gems and PC Jewellers figure in the list of the 100 largest luxury goods companies globally which accompanies the study.
The listing is based on publicly available data for consolidated sales of luxury goods in the 12 month period ending 30 June 2015, and by that yardstick, Titan (with jewellery brands such as Tanishq, Zoya and Mia) is the highest ranked Indian company at 32, followed by Gitanjali Gems (its popular brands are Nakshatra, Gili, Asmi etc) at 40 and PC Jeweller Ltd at 44.
Being ranked in such a formidable list is no mean achievement for the three jewellery giants, especially since there are only three Asian countries that have made it there - China, South Korea and India.
China (including Hong Kong) is Asia's luxury powerhouse - not only does it have the largest number of companies in the list at 8, it also has a company in the top 10 (Chow Tai Fook Jewellery), plus two more in the top 20.
Total sales generated by all companies on the list stood at $222 billion for the 12 months ended June 30, 2015, which was 3.6 per cent higher year-on-year, while average luxury goods sales across all 100 companies was $2.2 billion.
All three Indian companies listed fall below this average - Titan at $1.86 bn; Gitanjali at $1.29 bn and PC Jeweller at $1.04 bn (though the figures may look slightly different if adjusted for exchange rate fluctuations) - indicating that Indian luxury still has much catching up to do.
Luxury conglomerates with operations in multiple sectors of the luxury goods are at the top with a 32 per cent share in total sales, and average sales of $6.5 billion. Among other product categories, apparel and footwear has the largest number of representatives - 38, while jewellery and watches has 29. The former sector however, only has a 7 per cent overall share and a average sales of $1.6 billion, while the latter has a 25 per cent share of the total with average sales of $1.9 billion.
Though the three Indian companies fall below this sectoral average as well, there are other parameters on which their performance is better. For example, PC Jeweller and Gitanjali Gems grew at 19.2 per cent year-on-year during the period under review, placing them only behind Graff Diamonds (48.1 per cent growth) and Pandora (32.5 per cent growth) in terms of annual growth within the sector for the period of review.
Deloitte predicts slower growth of the luxury sector in the coming year, though it identifies "pockets of opportunity" such as India that are "growing quickly".
But, while quantitative growth may come, the real challenge for Indian luxury is to achieve qualitative advancement, where they lag behind global benchmarks.
For example, a key observation of the report is that there has been a "shift in the luxury path-to-purchase". Elaborating on this aspect, it says that luxury goods consumers are "empowered by social networks and digital devices" and are "dictating increasingly when, where and how they engage with luxury brands."
It adds that consumers are seeking a "more personalised luxury experience, and expect to be given the opportunity to shape the products and services they consume".
In such areas, Indian luxury companies have yet to make any significant impact. Digital marketing is still very much taking its first steps, and physical brick and mortar stores still play a crucial role in influencing decisions, particularly when purchasing goods like jewellery that are at the upper-end of the price spectrum.
The report suggests that "the old retail model is dying fast" and projects that branded online retail will enjoy a 26 per cent market share by 2025, up from 4 per cent about a year ago, in addition to a 10 per cent share for other online retail (currently at 5 per cent). It says that while the product and product system will continue to be important in the luxury sector, there are a number of other areas (such as platforms, business models, and entirely new customer experiences) in which innovation can drive measurable value.
In these areas, Indian luxury retail is still relatively in its infancy, and will have to take major strides to keep pace with what the global brands have to offer.
Columnist
He has been a journalist since the mid-1980s, and has spent close to two decades tracking the gem and jewellery industry while holding different editorial positions in industry specific publications and websites
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