After demonetisation, now GST to hit jewellery sector: Sonam Gupta

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Rituparna Kakati | 07 Mar, 2017
Implementation of GST will affect the profitability of the Indian jewellery sector, including the small and medium enterprises in the field, said Sonam Gupta, Co-founder and Creative Director, Zurie Design Studio, in an exclusive interview with SME Times.

On demonetisation impacts, she viewed that while the sector has been affected, implementation of excise duty, which has hampered the sale of gold and diamonds in India, is no smaller a challenge

Commenting on other challenges facing the jewellery sector she identified advent of imitation and costume jewelry as one of the top challenges facing the SMEs in the sector.

Excerpts from the interview...

What are the challenges you faced while setting up your business?
Sonam Gupta: There were a lot of challenges that I and my brother, Mr Prarit Gupta faced during the nascent stages of establishing Zurie Design Studio.

The biggest one was to find a suitable location and infrastructure where we could showcase some of the best designers as well as cater to the niche and growing market of Tier II cities where spending capacity has increased manifold over the past decade.

Another challenge that we face even today is education the customers think of carrying and utilizing their pre-owned and/or new designer accessories in everyday wear.

Please share your views on the SME sector and the major challenges it is facing in India.
Sonam Gupta: India is one of the fastest growing economies in the world today but as an entrepreneur, we still seek more help and guidance when it comes to raising funds being an SME. Due to small infrastructure, low sales and less staff, we remain on the backlog of traditional banks and finance providers. SMEs struggle for everyday funds but with the advent of Startup India and Make In India, we are now more visible and hold more credit to our names. We still have a long way to go before GST is implemented as we bear numerous indirect taxes that acquiesce with the financial norms of the country. This adds more costs to our production and setup leading to lower profits and higher taxes.

What is your view on the current situation and future prospects on the Indian jewellery industry?
Sonam Gupta: Indian jewelry market provides employment to over 1.5million people in India contributing over 14% towards total exports in India. Due to massive changes in technology and infrastructure, customers are now shifting their purchases from trusted neighborhood jewellers to retail branded outlets located at premium locations.

Jewellery exports comprise a major portion of India's export basket. What measure you think should be taken by the government to promote jewellery exports?
Sonam Gupta: The advent of imitation and costume jewelry has affected the domestic sale of Gold and Diamond jewelry in stark contrast to that of exports of the same.

The blame is shared more by Demonetization than by a saturated Gold market. Costumers can easily purchase designer accessories that look like gold at less than half the price with lesser worry of safety and trust seal.

Please comment on the impact of demonetisation on the jewellery sector?
Sonam Gupta: Demonetization seriously affected all sectors but the implementation of excise duty only hampered the sale of Gold and diamonds in India. Since our focus is fashion accessories, demonetization is a boon and not a bane. With demonetization, black money was not stalled-it was rather delayed due to which customers shifted their purchasing propensity to artificial or imitation jewelry instead of gold.

What are your future plans ?
Sonam Gupta: Zurie Design Studio breathes fresh air to an exhausted jewelry market by bringing customers closer to their favorite designers and selling them at zero premium which instills faith and integrity. We at Zurie, endeavor to cater to all genders, age groups and ethnicities by providing our customers with the work of best designers as well as small kaarigars (read craftsmen) right from the roots of villages.

Our future plans include inculcating and showcasing more small scale designers who struggle like we did to find a place to showcase and reach their targeted customer without spending a fortune on digital marketing.