Change is inevitable. Some people handle it with ease and for others, it is a huge challenge.56-year-old Pallab Bhowmik from Kolkata learnt this truth two years ago when he had to quit his century-old family gold business and enter a completely new domain of fish business. Some 1,700 km down south in Chennai’s T-Nagar, Bhairi Balaji also had to quit his family–owned 125-year jewellery manufacturing business and enter into a B2B jewellery business where he requires very little capital to run the show.Like Bhowmik and Balaji, many neighbourhood jewellers have disappeared in last 2-3 years unnoticed. There are multiple reasons for them to quit this precious metal business but these unorganized players who have ruled the gold business for years quietly put the blame on millennials for driving them out of the business."They want something different every time...something unique. It is impossible to fulfill their demand. Survival was becoming a major issue and I had to quit my gold business," said Bhowmik.As India is bringing in structural changes, the Rs 3 lakh crore gold jewellery business is witnessing a transition where the shift from unorganised to organized sector is becoming increasingly noticeable.According to the World Gold Council, organised or branded players had a meagre 5% share of the jewellery market in 2005. It had risen to 30% in 2016. In 2019, the organized players have cornered 32% of the market and it is expected that by 2020 their share will rise to 45% which will pave the way for a further diminishing number of unorganised players. India annually consumes 850 -900 tonnes of gold."It’s true that millennials want unique designs and are more aware of purity of the product they are buying. But these are not the only reasons why unorganised players are getting out the business,” said Surendra Mehta, national secretary of India Bullion & Jewellers Association.The shift in buying preference to organised players gathered pace in the past five years with stricter implementation of compliance norms such as GST, tightening of lending norms by non-banking finance companies (NBFCs) to the gold sector and the resistance from the small players to transform their business with the changing times.Today’s consumers are shifting to organised retailers because they offer newer designs, quality, buyback and their exchange policy is far more simple and transparent than smaller players.Some even allege that unorganised jewellers sell low quality gold and a large number of them prefer to sell jewellery without issuing proper bills. Also, small jewellers are not able to provide digital payment options. Buyers with awareness prefer to buy gold with white money and proper bills.So, buyers with clean money would not want to associate with small and unorganised players anymore. Further, informed buyers insist on ‘hallmark’ certification which many small shop owners don’t provide.The rising import duty on gold from 4% to 10% and now at 12.5% has also taken the wind out of the unorganised trade. With very little working capital in hand, running the daily operation is increasingly becoming difficult for them.The structural changes in the gold business have affected the artisans the most as they have nowhere to go. Events like the introduction of the 80:20 rule in 2013, demonetisation, rising import duty, furnishing of PAN for purchasing gold above Rs 2 lakh have dented demand, putting unorganised players out of gear. The artisans associated with them either had to leave the profession and go back to their villages or have been forced to take up some other profession.In the last five years, orgnanised trade has expanded aggressively triggered by a shift in consumer allegiance from the unorganized sector to the organized one. For instance, Malabar Gold & Diamonds has increased its number of outlets by 42% in last five years. Ahammed MP, chairman of the company said, "We have capitalised on that trend by earning consumer confidence banking on transparency, trust, commitment to quality, customer-friendly service and design excellence."Ramesh Kalyanaraman, executive director, Kalyan Jewellers, added, "Young people want to feel a lot of variety. They give emphasis on purity and quality of the product. They like newer designs in studded jewellery. And they need a particular ambience to shop. The small players at times may not always afford to provide all these." Kalyan Jewellers has more than doubled their stores in India from 51 to 105 in last five years.Senco Gold & Diamonds, a Kolkata-based jeweller which ran 51 stores in 2014, now has 106 stores. In the last five years it has not only gone national but has also entered tier 2, 3 and 4 towns where the demand for branded jewellery is on the rise among the young aspiring population.India has over 45% under the age of 25. "Our large-scale consumer research indicates that they do have a strong affinity with gold. The research says that if they were given Rs 50,000, a third of respondents aged between 18–33 said they would invest in gold,” said PR Somasundaram, managing director, India, of World Gold Council.The younger generation in urban India has subtly different tastes. When offered Rs 50,000 for a discretionary purchase, 42% of consumers over the age of 34 in urban India said they would buy gold jewellery. This dropped to 33% for millennials aged between 18–33. The fact that around a third of younger consumers would choose to buy gold jewellery if they were given Rs 50,000 is still very positive, but it suggests that the younger generation of potential consumers have temptations other than gold to consider.What is the competition for gold amongst the younger generation? As with higher-income earners, the answer lies partly with diamonds and gem-studded jewellery. But it also includes other luxury items, such as designer clothes, handbags and shoes, silk sarees, and the ubiquitous smartphone.The competition, therefore, remains tough for the organized trade as well. In this changing scenario, unorganised trade will have to change their way of doing business or will have to leave it completely.Most of the government’s reform initiatives and regulations have definitely favoured organised jewellery retail trade. Government’s increasing thrust on digital transactions has created a sense of trust among consumers who prefer clarity in transactions. Unorganised trade largely stayed away from digital transactions and preferred dealing in cash.The implementation of GST has not only enhanced tax compliance in the trade but also increased the trade-level and consumer-level transactions.There will be another big shake-up in the gold trade when hallmarking becomes mandatory from January 15, 2021. A large chunk of 3 lakh jewellers in the country will leave the trade, feels Surendra Mehta. At present, out of 3 lakh jewellers only 30,000 sell hallmarked jewellery."The only cause of concern for the organised players is the increased import duty on gold to regulate the gold supply. In a way, the duty hike is encouraging unauthorized transactions of gold which is not only impacting organised trade but also eroding the government’s revenue," said Malabar Gold & Diamonds chief.Sums up Somasundaram, "The shift from unorganised trade to organised is inevitable in gold as broader economic reforms and government efforts on ease of business accelerate. Technology solutions and consumer awareness of issues of purity and price in the unorganised segment will drive this trend faster."