E-Commerce Opportunities for the Gems and Jewellery Industry

E-Commerce Opportunities for the Gems and Jewellery Industry - Reduce Marketing and Selling Costs, Tap New Markets
E-commerce has transformed traditional business channels for many industries, gems and jewellery being one of them. The Gems and Jewellery industry lends itself perfectly to E-commerce.
A consumer can look at magnified images of jewellery pieces on his or her laptop, compare jewellery across three to four stores and have the jewellery delivered to his or her doorstep.
The advent of online jewellery shopping would have brick and mortar companies worried. However, for the industry as a whole E-commerce implies exciting new opportunities.
It would not be incorrect to state that E-commerce would increase total volumes of sale for the industry. However, the benefit will be enjoyed by those players who can understand online channels of business and use them to their advantage.
Business to Business (B2B)
Most of the electronic commerce that takes place today is of a business to business (B2B) nature. B2B simply implies that both seller and the buyer are business corporations. B2B portals are gaining popularity in the Gems and Jewellery industry. Its benefits are unmatched by traditional business channels.
Advantages of B2B
The Gems and Jewellery supply chain is spread across different regions and it is controlled by a few big companies, thus it is a major cause of concern for most companies. However, B2B portals can be used by a jewellery company to reengineer their supply chain.
Supply Chain Solution
From the buyers’ point of view, B2B medium can be used to procure supplies from a supplier who can offer them at the most competitive price. More importantly the purchasing company does not have to over depend on just a couple of suppliers as he can search for other suitable suppliers and avoid a supply crisis.
Lower Costs
Sourcing goods from a B2B portal eliminates middleman costs. It provides an environment for business houses to negotiate trade agreements directly.
More importantly B2B is a faster and more efficient medium to transact. Average turnover time for business transactions over the internet is much lesser than traditional means. Finally, it allows you to enjoy JIT just in time delivery; the company can keep track of his goods as to where it has reached.
Reduced Selling and Marketing Costs
A business to business portal is a very effective medium for marketing. A Diamond company for example can list all the stones he wishes to sell with images and relevant grade details. The website is visited by prospective buyers, hence the perfect target audience.
He enjoys the option of selling his diamonds to highest bidder. Thus a B2B portal is a highly effective medium of marketing and selling your inventory.
Business to Consumer (B2C)
An online Business to Consumer medium of E-commerce is known as B2C E-commerce. E-retailing as it is more popularly known has emerged as a growth channel for jewellery retail. In 2005, the United States which is the largest market for jewellery in the world witnessed a 25 per cent growth in retails sales through online B2C channels. In dollar terms it accounted to sales of USD 2.1 billion.
Online jewellery shopping owing to its inherent convenience is gaining popularity even in the Indian market. India has an insatiable demand for jewellery, according to the internet and Mobile Association of India, number of shoppers purchasing jewellery online is expected to increase by 15 to 18 per cent by the end of this year.
Revenues from E-commerce (overall) in India almost doubled from Rs 1180 crores in 2005-06 to Rs 2300 crores in 2006-07. Internet penetration is rapidly increasing in India estimated at 38.5 million today and slated to increase to 100 million by 2007-08 for E-retailers more people online translate to more potential consumers.
India with its cultural penchant for jewellery is one of the most important players in the Gems and Jewellery industry. It plays a dominant role in the processing of diamonds and is one of the biggest markets for jewellery consumption.
Organized retail accounts to only 2.5 per cent of total sales in India. However, the retail landscape in India is evolving with more companies embracing E-commerce as a channel for growth.

Tiffany 4Q Profits -76%

Tiffany & Co.'s profits tumbled during its fourth fiscal quarter as the weak consumer market, particularly in the U.S., took its toll on company sales. Profits for the three months ending January 31, 2009, fell 76 percent to $31.1 million, the luxury jeweler reported before the bell Monday. Tiffany took a one-time pretax charge of $97.8 million for an early retirement program and other staffing reductions in the fourth quarter. Approximately 800 employees were offered early retirement, 600 of whom accepted, Tiffany reported. There was also a $7.5 million pretax charge related to the anticipated closing of Tiffany's Iridesse retail operations, charges of $12.4 million to write off an investment in diamond mining at the Jericho mine in Canada, and a pretax charge of $3.4 million to close its diamond polishing facility in Yellowknife, Canada. Together with the drop in headcount from the early retirements and the anticipated closing of Iridesse, Tiffany expects a total staff reduction of 10 percent, resulting in approximately $60 million in pretax savings in 2009. Tiffany's net inventories increased 17 percent in fiscal year to $1.6 billion, due to lower-than-expected sales, the opening of new stores and increases in inventories of raw materials. Total debt as a percentage of stockholders’ equity was 45 percent as of January 31, versus 26 percent one year earlier. Tiffany secured $100 million of long-term financing in the fourth quarter and issued an additional $250 million of long-term debt after the close of the year. The funds are being used to refinance existing debt and for general corporate purposes.The company previously reported that its fourth-quarter sales declined 20 percent to $841 million. Same-store sales in the U.S. fell 33 percent during the period and total sales fell 30 percent. Comparable store sales saw a drop of 13 percent in the Asia-Pacific region, while in Europe they were flat. Full fiscal year profits decreased 32 percent to $220 million and sales were down 3 percent to $2.9 billion, the company reported. “Tiffany has clearly not been immune from global economic turmoil in recent months and we are taking a cautious view to business conditions in 2009,” said Michael Kowalski, chairman and chief executive officer (CEO) of Tiffany. Kowalski reported that Tiffany has reduced its cost structure “to maintain reasonably healthy levels of profitability and strong liquidity,” but added that there were no signs yet of an upturn in the business. "Our planning is based on the assumption that economic conditions will remain challenging throughout the year,” he said.
Tiffany expects an 11 percent decline in sales in 2009, assuming a sales percentage drop in the mid-teens across the Americas, the mid-single-digits in the Asia-Pacific region, and the high-single-digits in Europe. During a morning conference call, the company laid out plans to open 13 new stores in 2009, including seven in Asia. The company projected that rough diamond prices will fall an additional 20 percent during the year

Gold prices may rebound on demand for an alternative to currencies

A recent Bloomberg survey says that gold prices may rebound on demand for an alternative to currencies. Gjepc.org spoke to some experts to find out what they feel about this and what will the situation be in the months to come.Bhargav Vaidya, industry expert and bullion consultant, says, "I can't say this so directly but indirectly, yes, there are possibilities that gold could react this way. But it will happen with countries that don't have confidence in their currency. Though it's for sure, it will not happen in a huge way and if there's a short in Euro, there will be a long in gold". He adds that though no one knows how the last year's depreciation could be termed, it's for sure that the dollar terms will not be breached. His thoughts are seconded by Debjyoti Chatterjee, an associate vice president with MAPE ADMISI Research in Mumbai. He says, "The current bull on gold prices is because of safe haven buying and in this recessional market, people are not sure of their currency. Thus, as an alternative investment, they are pouring money on futures". He is of the opinion that because of a decline in dollar, gold is gaining heavily and this volatility in the market was not evident before 2005. He adds, "There is always 50-60 dollar volatility in trading but that's not the case anymore. It's a traders market now and they decide on the prices. Whatever happens, there will be no breach in the gold prices. Currently, gold is around $900 an ounce which is pretty much close to $1000 an ounce and, for 2009, I would say that gold at $1200 an ounce is not at all superficial but very much practical". Adding further to this situation, Chatterjee says that even higher crude oil prices will support gold prices. "In the second quarter rally, by April, there will again be volatility in the market and the bullion market will be beneficial for gold. The physical gold demand has reduced by 2/3rd because of higher prices and compared to last year, the gold import in India has been merely 300-350 tonnes". He feels that the prices are not going to heal as India is just a "price taker and not maker". Since there is a mismatch in the demand and supply in physical gold, even the central bank is holding on to its reserves. "This is going to be very much supportive for gold prices which are going to be just higher and higher", concludes Chatterjee.

Alrosa Aims To Become World's Leading Diamond Miner ---Presently accounts for 25% of global diamond output

En.rian.ru reports that Russia's largest diamond company Alrosa could become the world's top diamond mining company, and is considering buying foreign assets, the company CEO said.
Sergei Vybornov said Alrosa has an opportunity to seize the initiative and become the global leader amid the ongoing crisis, as the company has the world's best diamond resources in Yakutia in northeast Siberia, while its rival De Beers has had to cut output.
"There is also an opportunity to purchase very good diamond assets abroad - small companies that are going bankrupt or are on the verge of bankruptcy," Vybornov said.
Alrosa accounts for 97% of Russian and 25% of global diamond output. The Russian government holds a 50.9% stake in the company.

Turkey To Challenge India In Gold Jewellery Sector ---

According to Commodity Online, India may witness strong challenge from Turkey in the gold jewellery sector with that country focusing on better designs and new models.
According to reports, Turkish gold jewellery sector is in a strong position and is set to continue growing.
Reports appearing in the media said that Turkey could become the market leader for creating quality jewellery pieces from the precious metal.
Turkey is in a very successful position in terms of workmanship and design.
A strong culture of jewellery making combined with advances in marketing and design has put the country at the forefront of the sector.
The number of Turkish designers has increased with gold jewellery experts on every corner in the country.

GIA Museum To Debut 472-Carat Emerald --- It's a brilliant green four-inch hexagonal crystal

According to Rapaport, the Gemological Institute of America (GIA) plans to debut a recently discovered 472-carat emerald crystal from the Muzo region mines in Colombia. The emerald, the El Itoco crystal, was named after Muzo Indian lore, according to Ron Ringsrud, the emerald dealer who loaned it to the GIA Museum on behalf of its owner, Hernando Sanchez, who is the emerald mine shareholder and Colombian emerald exporter. "This is the first time any of the Colombian mine owners have displayed such a significant emerald at any museum worldwide," Ringsrud said. "This is by far the largest gem-quality crystal to have come out of this historical mining area in a long time."
GIA spokespersons stated that a gem-quality emerald crystal of this size is extremely rare. The four-inch hexagonal crystal possesses a color equivalent to the finest emeralds, according to Terri Ottaway, GIA Museum curator. "To have the El Itoco in our museum for our students and the public to view is an extraordinary honor. Pieces of this size and quality are the stuff of legends. It generates what Colombian miners call 'green fever' in the imagination," she said.
Ottaway stated that the GIA was chosen to display this coveted piece from among some of the nation's most renowned museums. The El Itoco is displayed in a case that includes three other emerald crystals and an emerald and diamond necklace and earrings suite designed by Jean Schlumberger for Tiffany & Co., circa 1960. The El Itoco emerald crystal will be exhibited in the GIA Museum until early fall 2009

Gems & Jewellery Sector May Recover Soon

Gems & Jewellery Sector May Recover Soon - - Reports of increasing consumer spending in the US
According to Press Trust Of India, Indian gems and jewellery exports, which have been declining owing to the global economic meltdown, are expected to recover in the next few months on account of revival of demand in the major market of America.
"We expect that, in June and July, there will be some revival of exports as one of the reports revealed increasing consumer spending in the US," Gems and Jewellery Export Promotion Council Chairman Vasant Mehta said.However, he said that exports would continue to remain down by about 20-30 percent in April and May. As per estimates by the Directorate General of Foreign Trade, the industry has suffered an export order loss of Rs 125.67 crore and cash loss of Rs 49.93 lakh during August-October 2008.The US accounts for 30 to 35 percent of the Indian jewellery exports.The declining trend had begun well before the Christmas season. In fact, the sector's exports had started showing a declining trend from November onwards when it dipped by 34.25 percent as compared to the same period last year. In December 2008, exports had declined by 25.89 percent over the corresponding period last year.Shipments during April-January stood at $16.3 billion against $16.7 billion a year ago.

"Diamond jewelry has grown to a tune of 10-15%"

"Diamond jewelry has grown to a tune of 10-15%"
In India there is nothing called recession but just a slow down in the economy. This slow down has happened only October 2008 onwards which also happens to be the wedding season. The impact of this slowdown has been very limited but consumers continue to buy jewelry during the wedding season. The diamond jewelry has grown to the tune of 10-15% over the same period last year.I also believe that diamonds are doing well across the country and it is not specific to any specific city or area. Diamonds are doing well across the country. The preference for diamonds has been very high for the last few years.
A recent consumer survey very clearly shows a high desirability for diamond jewelry as compared to plain gold jewelry. I feel that the desirability for diamonds has been built over the last full decade. Such high desirability remains high for a long time and hence I see the craze for diamonds to remain for a long time.

ROSY BLUE TO DIVERSIFY INTO OILSEED PROCESSING

ROSY BLUE TO DIVERSIFY INTO OILSEED PROCESSING
- Aimed at generating employment in the region, says Russell Mehta

De Beers Diamond Trading Company (DTC) sightholder Rosy Blue (India) Pvt. Ltd. is planning to set up either a castor seed or an isabgol (psyllium seed husks) processing plant in Gujarat, the financial daily Business Standard reports. The company has approached the state government to acquire 50 acres of barren land for the project, the report said.

“Diamond being the core business for us, we thought of getting into a second or third leg business,” said Rosy Blue chief operating officer Russell Mehta. “Though the company is yet to decide whether it would set up a castor seed processing plant or an isabgol plant, ultimately we intend to generate some more job opportunities in the region,” he added.

Rosy Blue also intends to set up a cutting and polishing unit near Palanpur, a historic diamond processing centre. “As of now, we are satisfied with our diamond cutting and processing capacity. Yet, the new plant is again an effort to generate more employment in that region,” Mehta remarked.

Business Standard said the new factory will be established through Rosy Blue shareholder, Banaskantha Industries Pvt. Ltd., on an additional 50-acre plot of land.

The Reasons behind Ups and Downs of the stock market

The core reasons are………………………..
Why Stocks prices Go Up
-- The company entered in to a big new contract
-- A great positive news coverage on the company in the media
-- Scientists discovered and opined that the product is good for something important
-- A famous investor is buying shares-- Lots of people are buying shares
-- An analyst upgrades the company, changing her recommendation from, for instance, "buy" to "strong buy"
-- Other stocks in the same industry go up
-- Most of the stock market is up
-- A competitor's factory burns down
-- The company wins a lawsuit
-- More people are buying the product or service
-- The company expands globally, and starts selling in other countries
-- The industry is "hot"
-- people expect big things for good reasons
-- The industry is "hot"
-- people don't understand much about it, but they're buying anyway
-- Increasing sales and profits
-- A great new executive is hired to run the company
-- An exciting new product or service is introduced
-- The company is bought by another company-- The company might be bought by another company
-- Additional exciting new products or services are expected
-- The company is going to "spin-off" part of itself as a new company
-- Rumours
-- For no reason at all
Why Stocks prices Go Down
-- Lots of people are selling shares
-- A factory burns down
-- Other stocks in the same industry go down
-- Profits and/or sales are slipping
-- Top executives leave the company
-- A famous investor sells shares of the company
-- An analyst downgrades his recommendation of the stock, maybe from "buy" to "hold"
-- The company loses a major customer
-- Most of the stock market is down
-- perhaps in a temporary recession or bear market
-- Another company introduces a better product
-- There's a supply shortage, so not enough of the product can be made
-- A big lawsuit is filed against the company
-- Scientists discover the product is not safe
-- Fewer people are buying the product
-- The industry used to be "hot," but now another industry is more popular
-- Some new law might hurt sales or profits
-- A powerful company becomes a competitor
-- Rumours
-- For no reason at all
These are the some reasons which creates wave in the market both for and against the company in different situations. But, an intelligent investor has to look at all these fundamentals before taking any reasons regarding buying and selling of shares and stocks of any companies. Now, I would like to add up one more thing that some of these reasons harm short term oriented investors and some time they harm both. Therefore, an investor with long term vision and patience will always make the most out of any stock market or any stocks. As a financial consultant, my advice is, if you really want to take part in the development of India, be regular in the long run.