PEST ANALYSIS:

Political Factors
 Current law and order situation of the country is not favorable especially in the tribal areas of
NWFP. This affects the performance of the gems and jewelry sector since it has created many
security problem.
 Non existence of hallmarking results in Pakistan’s increasing loss of export, self independence
and less acceptability of Pakistani products both in the local and global markets
 This sector has a huge untapped potential that is being wasted because of the negligence of the
government as there is an absence of a specific gem-related mining policy, dearth of creativity,
lack of global market knowledge and export methodology are heavily hurting the entire sector.
 The practice of smuggling gold to other bullion markets has existed for long time and there is not
much being done about it, despite the knowledge of the lost official revenue.
 Lack of documented trading
 No price regulation policies by government, because prices largely driven by international forces
 The political instability also lead people to reduce demand for the luxury item and invest in more
‘solid’
 Though gold refining uses lead, which is poisoning in itself, no health or environment related
policy has yet been established.
 Establishment of the Pakistan gems and jewellery development company through public/private
ownership as an initiative to organize the lucrative industry. This has led to an increase in the
country’s exports, according to an article published in The News.
 According to the laws of the State Bank export of jewelry to India is not allowed at all

Economical Factors
 With the rising prices of gold jewellery buyers have started purchasing less of it.
 Recession has affected the jewellery sector in terms of its demand. With less purchasing power
people buy less jewellery, given its income elasticity.
 Import of gold and silver is subject to State Bank's authorization
 Higher living costs have also led people to sell their old jewellery, to capitalize on the increasing
market trend

Socio Cultural Factors

 Jewellery forms one of the most valued heritage symbols for women of Pakistan, and
subcontinent largely. It holds high cultural significance, especially in terms of dowry for women in
the subcontinent.
 Jewellery is mainly a luxury item that is purchased mostly by women of all age-groups in
Pakistan.
 Because of a decline in the purchasing power, people no longer purchase gold jewellery in the
same amount that they used to at a point.
 Where before women used to wear gold jewellery in heavy amounts to flaunt their marital status
after marriage, today’s women prefer trendy and light jewellery.
 Because this fashion need is often unfulfilled in gold jewellery, supplemented by the fact that gold
prices are not sky rocketing and the security constraints in the country dense, a shift towards
silver jewellery has been seen.
 Development of the country’s own fashion industry has also accounted for a shift in trends to
lighter jewellery
 Silver jewellery often gold-plated, allows women to purchase varying designs at cheaper costs.
The same is the case with artificial jewellery. Gold jewellery is now only purchased during the
wedding season, and that too has seen a shift towards lower carats. This is largely for purposes
of dowry, and gifts
 Increased exposure of Pakistani women to global trends has also led to an increased demand of
jewellery articles
 Higher exposure to Indian fashion has also led to an increased demand for Indian-style jewellery
Technological factors
 Local jewelers use casting machines for making bangles, chains and nose rings, etc.
 Machines are imported mainly from Italy (finest jewellery market of the world, as stated by Mr.
Saeed). Also imported from Germany, USA and France. Import of these machines if of high
costs. Transportation takes from 4 days to one week.
 Locally machines available from Gujranwala, Lahore and other cities of Punjab. These
machines re also of high quality, and relative cheaper. The old methods and techniques used in
the industry create a lot of wastage of precious stones and metal, for example a lot of precious
stones go to waste due to old excavation methodology
 Pakistan is to adopt hallmarking production in the sector very soon.
 Jewellery that is produced through CAD/CAM, using software matrixes are of superior quality and
presentation, and more in demand for export
 Use of technology saves costs, time and wastage. It increases efficiency and productivity of the
sector.
 Introduction and mainstream use of technology will reduce costs of production by large numbers
for the industry. In addition, it will also help Pakistan meet international standards, and build
economies of scale in production for international markets.

SWOT ANALYSIS OF JEWELLERY

INDUSTRY
STRENGTHS
 Availability of skilled artisans for the making of handmade jewellery
 Gems, an important raw materials are easily available locally
 High competition in the industry tries to fuel efficiency and improve productivity
 Promotion of gold consumption. (gold considered as foreign currency, higher the consumption,
higher the FOREX of the country!)
 Global popularity for bangle production
 Recognition of the sector in international markets.
WEAKNESSES
 Traders are reluctant to adapt new techniques and methods of production
 Availability and use of modern technology is limited.
 High rate of illiteracy
 Limited innovation
 Unorganised structure of the industry
 Lack of documentation
 Use of register-based inventory system
 Lack of member-registration in recognized associations
 Limited marketing techniques applied
 High operating costs
 Low or no conformity to international standards
 Absence of wide-scale use of hallmarking
 Lack of value-addition facilities: this leads locl jewellers to purchase Pakistani exported rough
stones from india at higher costs because india has a developed value addition industry,
renowned for its processing and polishing traits.
OPPORTUNITIES
 Training centres established by PGJDC
 Encouragement given to traders to participate in exhibitions and fairs to increase their visibility.
 Hall marking initiative
 Exploring new markets internationally
 Presence of a lot of untapped resources
 THREATS
 Provincial Disputes that hinder exploration of resources
 Smuggling
 High inflation
 Political instability
 Poor law and order situation
 Rise in international gold and oil prices
 Limited availability of credit and financial schemes
 Power crisis
 Lag between policy making and implementation
 Lengthy and cumbersome procedures of import and export (including the
 additional duties imposed!)
 High competition from India, and emerging countries like Bangladesh and Srilanka.

RECOMMENDATIONS
The government should take steps to complete import-of-gold transactions
in one day, so that raw gold does not wait in cargo idle. This will help the
industry improve its productivity, and help it meet export orders on time
without delay.
A separate room for checking of gold imports- away from the general import
section- so that security risks are relatively reduced for the industry.
The government should have follow-up steps taken after designing and
establishing a policy to check if it is being implemented o not. Postimplementation
steps of assessing the changes brought by policy
implementation should also be developed so that the industry can flourish
and gain momentum locally and internationally
Gold-refining facilities use lead in the process which is poisoning: these
facilities should be subjected with health standards and at the same time,
should be away from the commercial area to safeguard the heath of
inhabitants.
Provide security measures for local jewellers who are trading to ease their
operations
Government support through bank loan and credit facilities will also aid the
sector in advancing and acquiring expensive technology to aid production,
otherwise not possible
Simplify export procedures to meet time-bound orders, otherwise, India, our
major competitor will lick most of our customers away, given the relaxed
import/export policies they are subjected to in order to boost the industry
Quicken the production process of an industrial and free-export-zone,
proposed by the name of Dazzle Park. This will provide the following
benefits:
- Fresh air provision
- Access to natural light
- Shock and fool proof electrical wiring
- Lower the costs
- Allow a sharing of infra structure, which will enable the industry to achieve
economies of scale, by reducing costs and increasing productivity.
- Will be similar to mass-production sites
Improve the marketing strategies implemented in the sector through
introducing the concept of branded Pakistani jewellery to improve its worldwide-
recognition and demand
Computer-based inventory system should replace the register-based
inventory system widely followed in the mainstream market. This will allow
jewellers to keep better track of costs and the items for sale. In case of a
security threat, a readily available loss of costs and expenses will allow a
quick recovery of the same.
Speeding up the process of hallmarking and assaying will help the industry
improve its quality standards, and conform to international standards,
thereby adding to the international demand and a simu8latenoes increase
in local exports.
Increase participation in world-exhibitions and a providence of other
avenues to open the gateway to the global market, so that production of a
variety of designs and trends is introduced
Government support through bank loan and credit facilities will also aid the
sector in advancing and acquiring expensive technology to aid production,
otherwise not possible
Introduction of professional and proper training centre and educational
institutions that offer jewellery designing and use of related technology as a
recognized course.
Development of value-addition facilities internally will help the industry
lower its costs, which accumulate because local traders tend to buy
Pakistani exported/smuggled jewels at a higher cost after they have been
processed and polished from India.
Promotion of e-trade as a means of exploring and expanding into foreign
markets