The gleaming exteriors of jewellery shops are swiftly becoming a prominent sight in Indian shopping malls, emphasizing a shift in consumer preference towards established retailers.
According to five prominent mall operators overseeing over two dozen malls nationwide, each mall now hosts approximately 8-10 jewellery stores, a significant increase from just one or two in 2021. These stores now occupy nearly 5% of the total mall space, up from just 1% two years ago.
As more buyers transition away from smaller jewellers, the organized jewellery retail sector has been surpassing other consumer discretionary segments since April 2023. This trend is reflected in the jewellery segment contributing 15-20% of mall revenues, despite occupying only about 5% of the space.
As brands affiliated with the Tata Group, like Tanishq, expand their presence in shopping malls, others such as Reliance Jewels, Kalyan Jewellers, Malabar Gold & Jewels, and Joyalukkas are also launching new stores. Additionally, the Aditya Birla Group has revealed plans for a INR 5,000 crore investment to venture into this burgeoning segment.
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“At our malls, the proportion of jewellery stores has risen to 4-5%. The majority of these stores continue to perform strongly, attracting a respectable amount of foot traffic to our malls,” explained Pushpa Bector, Senior Executive Director at DLF Retail, overseeing premium malls in the Delhi-National Capital Region.
Certain malls anticipate that the percentage of jewellery stores could climb to as high as 8-9% in the near future, as new brands actively seek out space.
Suvankar Sen, the managing director and CEO of Senco Gold & Diamonds, a publicly listed jewellery firm, remarked, “We’ve established mall-based stores to enhance our brand visibility and attract new, younger customers.”
“Despite the surging price of gold, we maintain an optimistic outlook and plan to expand our store footprint to foster long-term business growth,” Sen affirmed.
In FY23, Senco had minimal presence in malls. However, in the following year, the jeweller opened a store in each of the following locations: Elantra Mall (Chandigarh), Mall of Asia (Bengaluru), Phoenix Mall (Indore), and Phoenix Wakad Mall (Pune). These stores vary in size from 2,103 sq ft to 3,090 sq ft.
Candere, the lifestyle brand under Kalyan Jewellers, currently operates in Infinity Mall in Andheri, Mumbai, and in Lulu Mall, Bengaluru. Collectively, Kalyan Jewellers occupies nearly 20,000 square feet of mall space throughout India. Candere intends to emphasize its presence in malls further and aims to inaugurate 50 outlets within this fiscal year.
“Previously, we only had one or two jewellery stores, but now jewellery has become a distinct category, necessitating the creation of a separate zone for them. While last year posed challenges for apparel stores, jewellery consistently attracts foot traffic and generates revenue,” remarked Ravinder Choudhary, Vice President of Vegas & Unity Group, overseeing operations across half a dozen malls in Delhi and Punjab.
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As real estate expenses represent just 1-2% of the total cost of opening a new store, jewellers are capitalizing on this opportunity to expand their reach by increasing investments in advertising and marketing efforts.
ICICI Securities has projected a 29% compound annual growth rate in standalone jewellery sales for Kalyan Jewellers and 20% for Titan over the period from FY24 to FY26, with both companies consistently reporting robust demand in the March quarter. Kalyan witnessed a 38% year-on-year growth in India jewellery revenue, while Titan recorded a 19% increase in domestic jewellery revenue during the same quarter.
The surge in new jewellery store openings persists despite a significant rise in gold prices, driven by buyers seeking safe-haven assets amid escalating geopolitical tensions in the Middle East.