Chennai's gold jewellery market hots up with new players

CHENNAI: The city's burgeoning gold jewellery market is set to get a big fillip.
Even as large homegrown retailers are getting cautious with Kerala-based Kalyan Jewellers making a grand entry into Chennai with the world's largest jewellery store, they feel that this will widen the market in Chennai and are preparing for the growth in the market.
Next week, Warburg Pincus-backed Kalyan Jewellers will open its first showroom in Chennai at an investment of Rs 200 crore.The upcoming store span 40,000 sq ft will be able to accommodate over 500 customers and house over 600 kgs of gold. This is the brand's 78th store in India but city-based jewellers are skeptical about the brand's success in the city. Local jewelers believe that their expertise in the business and their experience will keep them above new players who enter the market with a lot of financial muscle but little insight into the working of the industry.
"Jewellery business is based on trust. They are traders who came from the textile business. I feel they are doing this as part of their plans for an IPO. They haven't done very well in other markets so we have to see how things will be here. Players like us who have experience will continue to retain out customers" Princeson Jose, MD of Prince Jewellery said.
The store will be inaugurated a few days before Akshaya Tririya, a day considered auspicious to buy gold, and city-based jewelers say that any heavy sales would be attributed to this and not the new player's power in the Chennai market. They are, nevertheless, preparing for Kalyan Jewellers' arrival, both with product launches and by offering employees special care since they fear that many employees might move to competition.
"We are taking this positively. We feel that this will bring us more customers. People from other cities and countries who are familiar with Kalyan will go to their stores and we believe that they might want to explore other stores in the city. We are launching a new range of products and giving offers for customers," said N Ananthapadmanabhan, MD, NAC Jewellers.
India consumed 850 tonnes of gold in 2014, Chennai being one of the largest consumers, and this market is will only get bigger with yet another retail chain coming into the market, jewellers say.
GRT Jewellers echoes his sentiments. "This will definitely increase the size of the market and we are happy since that will give us a larger market to play in. Such competition will only increase the market size," G R Radhakrishnan, MD GRT Jewellers said.