2016 has been quite a challenging year for the jewellery industry in general. With the PAN card rules coming into effect as well as excise duty followed by the process of demonetization, the industry has seen successive change within a short span of time.
Current demonetization has resulted not only in a contraction of liquidity but also in certain sectors, a contraction of income and an increase in the statutory cost of doing business (both for existing business and more so for the informal sector as they move towards a formal sector).
Highlighting the views on upcoming budget, Vijay Jain, CEO and Founder Director - ORRA, said, "While from a long term perspective, the benefits are immense, in the short term, in the absence of any meaningful announcements in the upcoming budget 2017, we are likely to see a demand contraction on the consumer side. I am hoping that the government will take concrete steps to both stimulate demand as well as increase investments."
Going further he added that In this new financial year, we are therefore expecting to see changes within the industry especially within the unorganized sector. There will be a call for more accountability and stability and therefore jewellery as a whole will witness a renewed outlook from being a viewed safe haven, but rather a smart, and well informed consumer choice. Within the retail segment itself, and according to a recent PricewaterhouseCoopers report we are seeing organized retail already having a penetration of about 8-10 per cent. This will lead to many brands and not just jewellery alone looking at reviewing inventory with a sharp focus on the more accessible price points and designs as well as re-aligning their marketing spends with emphasis on the digital medium.