- The Indian jewellery market is shifting towards lighter, lower-carat products and recycling initiatives
- Gold prices have dropped 25-30% since January, influencing consumer purchasing habits
- Retailers are promoting gold exchange schemes to boost store visits and manage supply chains
The Indian jewellery market is undergoing a rapid transformation, driven by changing consumer preferences and proactive strategies from major retailers. According to a recent sector note from global brokerage JPMorgan, the jewellery industry is witnessing a significant shift in demand patterns, with gold exchange initiatives gaining unprecedented traction.
JPMorgan analysts highlighted that the traditional reliance on heavy, high-carat jewellery pieces is making room for a more dynamic market. The shift is being led by a notable surge in recycling, as well as a growing consumer appetite for lighter, lower-carat products. The move marks a dynamic shift in the core nature of the precious metal's consumption in India.
Gold has been falling this year after being one of the best-performing assets over the past few years. Prices more than doubled between 2022 and 2025. Central bank buying, geopolitical tensions, and expectations of lower interest rates helped gold hit its peak this year. But since January, they have corrected by nearly 25-30%. As domestic gold prices remain elevated, customers are changing purchasing habits. The pivot toward lighter weight and lower-carat options (such as 14k and 18k) allows customers to continue buying jewellery for daily wear and gifting purposes without a strain to their pockets.
Push for Exchange Schemes
To maintain footfall and manage raw material sourcing, retailers are aggressively pushing gold exchange and encashment schemes. These programs encourage customers to bring in old jewellery to be recycled and offset the cost of new purchases. According to the brokerage, this strategy serves a dual purpose:
- Pulling in Footfall: Exchange schemes provide a strong incentive for consumers to visit stores, effectively mitigating the friction caused by high absolute gold prices.
- Sourcing and Recycling: By recycling old gold, retailers can ease supply chain pressures and manage their working capital more efficiently.
By pushing exchange schemes, major organized retailers are successfully keeping jewellery "accessible" to the average consumer, bridging the gap between high bullion prices and retail demand.
Solid Q1 Performance
Despite the macroeconomic pressures and price volatility, the April-June quarter demonstrated resilience. JPMorgan highlighted that the quarter saw good performance across various players in the organized segment. The ability of these brands to leverage their scale, launch new collections, and utilize exchange programs effectively translated into solid top-line momentum.
ALSO READ: Titan Q1 Update: Domestic Business Up 37% As Tata Firm Adds 77 Stores; Jewellery Arm Grows 39%
JPMorgan prefers Titan as top jewellery stock pick
In light of the industry tailwinds, JPMorgan remains 'Overweight' on Titan Company. The brokerage emphasized that Titan's core jewelry franchise-anchored by Tanishq and supported by brands like Mia and Zoya, remains underpinned by strong structural tailwinds. Titan has been a primary beneficiary of the sector's rapid formalization. Its aggressive store expansion, brand trust, and effective execution of the exchange schemes reshaping the market positions it to gain further market share from unorganized players.
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