Jul. 7 – India’s largest jewelry retailer, Mumbai-based Gitanjali Gems Ltd., plans to open 500 more outlets in India by the end of March 2011 and 100 new stores in China within the next three years, according to the company’s chairman, Mehul Choksi.
India is the world’s predominant purchaser of gold, accounting for over 20 percent of global demand, and the majority of that goes into jewelry. Mr. Choksi hopes that Gitanjali’s new stores, which will occupy 300,000 square feet of retail space, will help capture some of that demand.
During a recent interview with Bloomberg, Mr. Choksi said that the company’s aim was to raise Gitanjali’s market share in India to 5 percent of the retail jewelry market, up from the current 3 percent, although escalating prices for precious metals are a hurdle the company has to overcome.
On June 21, gold prices hit a record high of US$1,265.30 per ounce, illustrating investors’ preference for the metal in times of economic uncertainty, such as the current sovereign debt crisis in Europe. While this price increase obviously translates into more expensive jewelry prices for consumers, Mr. Choksi is confident that his company will counter the rising prices by simply offering cheaper products.
“When prices go up that doesn’t mean the product isn’t popular,” he said. “It’s just that you have to redesign the jewelry to reach out to more people.”
Shares in Gitanjali Gems rose 5.73 percent to Rs. 134.70 when markets closed on Tuesday, up to its highest level since January 2010.