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PERCEPTION & BEHAVIOUR OF CONSUMERS IN INDIAN GOLD AND DIAMOND

JEWELLERY MARKET: A REVIEW

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 Rabindra Bharati Journal of Philosophy
ISSN : 0973-0087
PERCEPTION & BEHAVIOUR OF CONSUMERS IN INDIAN GOLD AND DIAMOND
JEWELLERY MARKET: A REVIEW

Anupam Rana
Research Scholar (Design Management), Department of Management Studies,
Indus University, Rancharda, Via Thaltej, Ahmedabad, Gujarat 382115.
Email: [email protected]

Dr. Himanshu Chauhan

Assistant Professor, Institute of Management-Nirma University,
103, "B" Wing, Ground Floor, M Block, Institute of Management,
Nirma University Sarkhej-Gandhinagar Highway, Ahmedabad-382 48.
Email: [email protected]
Orcid: https://orcid.org/0000-0003-1124-1996

Dr. Mayank Bhatia,

Assistant Professor, Institute of Management-Nirma University,
103, "B" Wing, Ground Floor, M Block, Institute of Management,
Nirma University Sarkhej-Gandhinagar Highway, Ahmedabad-382 48.

Abstract
This paper attempts to study perception & behavior of consumers in Indian gold and diamond jewellery
market. Indian jewellery are famous internationally for the intricate works of Kundan, jadau, meenakari,
lacquer, filigree and many more. The market size of Gems and Jewellery contributes to about 7% of
India’s GDP.

Research methodology of this paper comprises a thorough study of secondary sources of data. articles
mainly from reputed journals, marketing books, trend forecast magazines, and e-resources.

The preference of consumer is continuously shifted according to the needs, desires, choices, technology
and fashion etc. Jewellers should improve the quality, designs, wastage, making charges and customer
services. Consumer convenience, product expertise, value for money, jeweller's reputation and after-
sales services which affect consumer interest in branded jewellery segment. following the latest
marketing trends will be a game-changer.
Keywords: Indian jewellery market, Consumer buying behavior, Consumer experience, Gold &
diamond jewellery, Consumer trends, virtual and augmented reality.

Introduction
History of jewellery is as old as the history of mankind. Indian jewellery is unique in its design and
craftsmanship. The Indian jewellery tradition is fascinating because of the different reasons they are worn
and it varies from religious to purely aesthetic types. It is crafted not only for humans but also for the
Gods, ceremonial elephants and horses. In India, Region-wise varieties can be spotted in the
workmanship of jewellery, according to the differences in geography, people, culture, rituals and
lifestyle.

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“Jewellery is like the perfect spice
-it always compliments what’s already there”

-Diane Von Furstenberg

Gold jewellery in India is not only a precious metal ornament but also sacred. This is one of the reasons
why gold jewellery is bought by Indians on auspicious days like Akshaya Tritiya and Dhanteras as it is
believed as lucky charm to increase wealth and prosperity. Indian jewellery are popular internationally
for the intricate works of Kundan,jadau,meenakari,lacquer,filigree and many more.

According to Invest India-The National Investment Promotion and Facilitation Agency, The market size
of Gems and Jewellery in India contributes to about 7% of the country’s GDP. Gems and Jewellery
industry contribute to about 16% to India's total merchandise exports and has grown at a CAGR of over
14.8% over the last 50 years. The Gems and Jewellery Industry in India are one of the largest in the
world, contributing 29% to the global jewellery consumption. The overall market size is expected to
reach $ 110 bn by 2022 from approximately $ 60 bn in 2017 (Investindia, 2019). India is the world’s
largest diamond processing country (cutting and polishing of rough diamonds) provides an advantage to
the diamond jewellery industry.

Fig-1: Advantage India in Gems& Jewellery sector

source: https://www.ibef.org/uploads/industry/gems-and-jewellery-jun-2019

As shown in Fig-1, India has an advantage of growing demand, Increasing investment, policy support
and attractive opportunities in gems and jewellery sector. As per India Brand Equity Foundation, India
is deemed to be the hub of the global jewellery market because of its low costs and availability of high-
skilled labor. The sector employs over 4.64 million employees and is home to over 300,000 gems and
jewellery players (IBEF, 2021). Jewellery has not only been considered for the purpose of adoration, but
also as a security in times of contingency. Mumbai, Jaipur, Surat, Delhi, Kolkata, Hyderabad,
Coimbatore, Thrissur and Nellore are the cities in India, famous and potential for the different segment
of gems & jewellery industry (Fig-2).

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Fig-2: Potential gems & jewellery markets in India

Source:https://static.investindia.gov.in/s3fspublic/styles/clusters_banner/public/201812/Gems%20%26
%20Jewellery-%20Market%20Potential-01.png?itok=STB_J0Gm

We usually think of the consumer as the person who identifies a need or desire, searches for a product to
satisfy this need, buys the product and then consumes the product in order to satisfy the need. However,
in many cases, different individuals may be involved in this chain of events (noel, 2009).

Consumer behaviour explained by American Marketing Association is “The dynamic interaction of

affect and cognition, behaviour and the environment through which human beings conduct the exchange
aspects of their lives.” it is important to recognize from this definition that consumer behaviour is
dynamic, involves interactions and involves exchanges (J.Paul Peter, 2010).

Fig-3: Influencing factors on consumer behaviour

Source: https://www.essaycorp.com/pages/images/consumer-behavior-assignment-help
Consumer behaviour also studies how individual customers, groups or organization select, buy, use, and
dispose of ideas, goods and services to satisfy their needs and wants.
Companies often fails to gain an understanding of what their consumers want and need before they
actually create their marketing strategies (A.Lake, 2009). The key challenges faced by the jewellery
retailer is creating products and services, which would be successful in the market.

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Fig-4: Emerging behaviors of Indian consumers

Source:
https://boston-consulting-group-res.cloudinary.com/image/fetch/w_2880,q_auto,f_auto/http://image-
src.bcg.com/Images/Ten%20Trends%20That%20Are%20Altering%20Consumer%20Behavior%20in%
20India_Ex1_tcm-231414.png

Ten emerging behaviors of Indian consumers explained in Fig-4 says that Indian consumers are doing
information centered shopping to stay trendy, adapting time saving services and interested in customized
products. They are more health-conscious and value experiences over products. Also, explain that female
consumers have final decision in the half of the category of the products and consumers are preferring
Indian brands over international brands, paying for the exclusive products and spending on renting over
buying.
Objective
The objective of this review paper is:
1. To understand and discuss the behavior of Indian consumers while purchasing gold and diamond
jewellery (Branded or non-branded).

Literature review
Gold and gold jewellery are the most popular in India. Indian considered it auspicious and a status
symbol. (Bhuvaneswari G.G, 2015) in their research “Buying behavior of women towards gold
ornaments” found that The India demand for gold jewellery is 22% of the global market according to the
study conducted by the world gold council. India is the world largest consumer of Gold in tonnage terms.
Gold is a formidable part of representing the Indian customs and traditions.it is also found that there is
significant relationship between the amount spent on buying gold ornaments and the income pattern.
purchase of gold ornaments has become a status symbol for many.

To compare the relationship between demographic variables and consumer behavior (Gomathy &
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yesodha devi, 2015) conducted an analytical study of consumer behavior of Coimbatore city, South India
in the purchase of gold jewellery. The study has concluded that most of the customers are female and
have purchased gold jewellery for the purpose of investment because it helps at the time of crisis.

(Xavier and kamalam, 2016) conducted a study on perception of consumer towards gold jewellery in
Sivakasi, Tamilnadu, South India and found out that, the quality has a direct impact on buying behavior
of jewellery product. Fashion and lightweight jewellery attracts more customers & different Offers and
discounts also improve sales.

(Khadekar & Kohad, 2016) conducted a study to find out consumer buying behavior of gold and gold
jewelry of rural and urban area of Nagpur district of central India. They carried out empirical study
through Descriptive method in which data obtained by survey through questionnaire and period of study
was 5 years. Study found out that, the sale of gold & gold jewellery in Nagpur region from 2010 to 2013
continuously increased but after that some amount in sale decreased. The growth rate of this sector in
Nagpur district in 2012 to 2013 was very good. Average demand for gold & gold jewellery of rural
customer is more than urban area, but after 2012-2013 the position was different and demand of rural
consumer was down as compare to urban consumer. To know perception, opinion, behaviors of customer
between Branded and Non branded jewellery, (Khadekar, Wanjari & kohad, 2016) carried out a study of
consumer buying behavior between Branded & Non branded gold jewellery in Vidarbha area of
Maharashtra state in central India and examined that total contribution of organized Branded jewelers in
Vidarbha area has increased from 8% in 2010-2011 to 15% in 2014-2015.

The retailer should know the consumers because it is important to know how, when and where the
consumers use the product or services that the retailers sell. (Kumara & Kumar, 2016) conducted a study
of changing behavior in the jewellery market of Vijayawada city, which is a prominent place in the field
of making, and marketing of gold jewellery. The major findings of the research show that showroom
Preference, Age, Education, Annual income was least affected with consumer buying behavior.

(Devi, 2016) in her research paper “A study on consumer behavior towards jewellery products in
Tiruchirappalli district” examined that in India, jewellery had great importance because of its traditional
and aesthetic value it was not merely to beautify, but also acted as a store of wealth, marked the rituals
of life, signified status, conferred respectability and marked the wearer’s identity, social background and
every stage in life from birth to death. Today the jewellery market is consumer-oriented and the
importance is given to the customers. The liking of consumer is continuously shifted according to the
needs, desires, choices and fashion etc. The jeweller should improve the quality, designs, wastage,
making charges and customer services.

In their case study (Kanakachandran & Saji, 2013) conducted a research on "Buying behavior in branded
jewellery market" Kerala region. They have identified five important factors like Consumer convenience,
product expertise, value for money, jeweller's reputation and after-sales services, which affect consumer
interest in branded jewellery segment.

(Trivedi, 2016)in his research paper “consumer preferences on branded jewellery in Rajkot-A case study”
conclude that the guiding factor behind purchasing jewellery is price, purity and design which score the
maximum. Other factors are variation, the brand reputation, influence of family and friends. the least

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influencing factor for buying jewellery is the service and display. when jewellery is bought for gifting
purpose the consumers still want to buy it from their family jewellers, while in research paper “consumer
perception of branded jewellery in India” examined that Indian women’s buying behaviour are affected
by a many aspects as quality, durability, design, variety, purity, reliability, comfortability to wear,
matchlessness, price, discounts, credit facility, promoting special gifts and offers, resale value, after-sales
services, popularity of retail outlets, ambience and the services provided in the store, occasions, friends
and relatives influence, trust in jewellers, brand name popularity and fashion. Women buy ornaments at
different occasions as wedding, anniversary, birthday, baby birth, baby shower, new year, festivals, house
warming or sudden financial gain (Sanjula, 2017).

(Raval, 2009) in his research paper “A study of consumer buying behavior for purchasing of diamond
Jewellery from branded retailers” found that the India is emerging as a large consumer market for
diamond jewellery and proposing a lucrative opportunity for major brands to form presence in Indian
market. Branded jewellery is a new mantra in the consumer market, having rapidly acquired a niche over
the past few years, also (Panwala, 2017) conducted research on “Consumer buying behavior of diamond
jewellery-A study for Surat”. She identified that the basic motive to buy diamond jewellery is come out
to be ‘fashion’ instead of ‘status’ or ‘investment’. Brand name is most important factor when consumer
make decision to buy diamond jewellery product.

Advertisements plays a crucial role in the buying behavior of women. Janaki & Gowri (2016) in their
research paper "Women's buying pattern of gold jewellery based on television advertisements-A study
in erode city" revealed that the majority of respondents are watching jewellery advertisement in
television. The songs/music, percentage of wastage and message they conveyed are the most influencing
factors to buy gold jewellery in a particular shop based on television advertisement.
The Five Customer Behaviour Trends in 2019 explained by Ilenia vidili are as per following,

1. The less is more consumer.

2. The consumer goes mindful.
3. The champion consumer.
4. The self-sufficient customer.
5. Then I want it now consumer.
With the effects of this five consumer behavior trends, businesses and, more specifically, retailers are
experiencing complete chaos in a moment of behavioral transformation where consumer expectations
are altering faster than businesses can respond (Ilenia, 2019).

Indian jewellery retail stores have become more insistent to lure consumers, especially those from the
tech-savvy generation. They are utilizing VR technology, and engaging with image consultants, stylists,
designers and fashion bloggers to guide consumers (Sutanuka ghosal, 2017).

Research methodology
To understand the present scenario of Indian consumer behaviour in the context of gold and diamond
jewellery, Research methodology of this paper comprises a thorough study of secondary sources of data.
articles mainly from reputed journals, marketing books, trend forecast magazines, and e-resources of
related fields were reviewed in order to gain an insight and conceptual understanding of the topic.

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Discussion and Suggestions

The global jewellery market has perceived continuous growth in the past few years and is likely to grow
even further during the forecast period (2019-2023). The market is expected to be driven by various
growth-enhancing factors such as the growing number of digital buyers, growing female workforce
population, increasing middle class population, growing high net worth individuals (HNWI) population,
growth of international tourism etc (www.researchandmarkets.com, 2019).

After reviewing the literature, the following are the points which were not much discussed by researchers
as an important influencing factor on Jewellery buying behaviour of consumers.

Introduction of cumulative FDI (in $) in diamond and gold ornaments between April 2019 stricter quality
norms and hallmarking. Hallmarking is the exact determination and official documenting of the
proportionate content of precious metal in precious metal articles as defined by BIS. Hallmarks are thus
official marks used in many countries as a certification of purity or fineness of precious metal jewellery
articles. The main objective of the Hallmarking Scheme are to protect the consumer against adulteration
and to necessitate manufacturers to maintain legal standards of fineness (hallmarking, 2019). Due to this
initiative of government of India jewellery consumer are more aware about the quality of gold and
diamond-studded gold ornaments, even jewellers can also established their goodwill and customer’s trust
by selling hallmarked jewellery.

In recent years Growth of lab-created diamonds ,Also known as synthetic diamonds, artificial diamonds,
cultivated diamonds or cultured diamonds is increasing, which is an alternative of high cost diamond.
people prefer gold jewellery with artificial diamonds due to low rates and this entire new products range
of diamond changing the diamond-studded gold jewellery buying behaviour of millennials.

Indian working women have started buying diamond jewellery for occasions other than marriage.
Gemological Institute of America (GIA) and International Gemological Institutes (IGI) open up
laboratories in the major cities of India where consumer can check the quality of Diamonds and precious
gemstones and jewellers also get their jewellery certified with internationally reputed labs is also a game-
changer in consumer buying behaviour of gold jewellery studded with gemstones and diamonds.

(Kumara & Kumar, 2016) said in their research that showroom Preference, Age, Education, Annual
income was least affected with consumer buying behavior but, Spatial design of Indian jewellery Retail
space starts making great influence on consumer behavior by providing special experiences.

Use of Internet of the Things, Virtual realities and Augmented realities are making jewellery retail
consumer experience more interesting and impactful. Some of the Indian jewellery brands like Farah
khan fine jewellery, PNG, PC jewellers and Tanishq have already installed this technology in their retail
stores, which is getting high appreciation.

Indian consumers investigate and compare the Jewellery products through internet before buying, which
makes them more aware than ever in terms of knowledge of latest designs, trends and quality. Online
retailers like caratelane.com and Bluestone.com are changing the jewellery buying behavior of Indian
consumers by providing low range, lightweight, latest design option and guaranteed quality of gold and

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diamond with omnichannel concept to impress all generations of consumer. After-sales service also
makes a difference in consumer perception.

As per report of (economic times, 2019) internet usage in the country has exceeded half a billion people
for the first time, pegged at 566 million, driven by rural internet growth and usage creates more active
social media platforms users which forces the Indian jewellers to advertise and promote their jewellry
apart from their websites, TV Commercials, Print media and celebrity endorsement. It’s become
necessary for the jewellers to make strong social media presence through the well-known platforms like
Instagram and Facebook. Millions of followers are following jewellery brands on this platform which is
changing their perception after reading content, watching promotional videos and following influencers
etc.

In-store facilities like, 3D printing of jewellery prototyping for enhancing the customization experience
of the consumers, jewellery repairing by laser machine, jewellery quality nondestructive test, jewellery
valuation, providing styling facilities to consumer according to the occasions providing different level of
experience and achieving customer’s trust to the retailers. Apart from all the above-mentioned
influencing factors for jewellery consumers, the design will always remain the topmost factor that attracts
Indian consumers that is why jewellers are making jewellery designs inspired from the historical
monuments, motifs derived from traditional crafts and flora-fauna.

Recommendations
After reviewing and discussing the different aspects of jewellery buying consumers following areas can
be explored by the researchers.
1. Influence of design and International trends on jewellery buying behaviour.
2. Technological advancement in the manufacturing of gold and diamond-studded ornaments and
its effect on buying behaviour of consumers in Indian market.
3. Customer experience: Before, during and after purchasing of jewellery and how it can change the
consumer perception towards jewellery retailers.

Limitations
The limitations of this study are that, due to a time constraint only selected sources of literature could be
reviewed for understanding the consumer behavior in Indian gold and diamond jewellery market. Further,
no empirical work has been done as a part of the research.

Conclusion
After reviewing research papers, cases and discussing the current scenario of Indian gems and jewellery
sector, findings says that people of India preferers gold and gold jewellery, because of safe investment
and traditional values. Factors like Consumer convenience, product expertise, value for money,
lightweight jewellery, wide design range, jeweller's reputation and after-sales services affects consumer
interest in branded jewellery and diamond jewelleries are in vogue.

Better opportunities are there for the traditional and branded jewelers to serve the customers with
hallmarked jewellery which provides quality assurance and for the diamond jewellery reputed lab
certification would be added advantage. Indian women buy jewellery at many occasions like wedding,
birthday, baby birth, new year, festivals, house warming and sudden financial gain. In the era of internet,

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Indian consumers are more aware than ever that makes impactful advertising campaign, social media
presence and intervention of the latest technology is necessary for the jewellers to reach out wider
population.

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