Economics of Bangle Market

Case Code: ECON040 Case Length: 08 Pages Period: 2009-2010 Pub Date: 2013 Teaching Note: Available

Price: Rs.300 Organization : - Industry : Bangles Countries : India Themes: Market Structure, Turnaround Management

Abstract Case Intro 1 Excerpts

Excerpts

Background Note

Since the time of the Harappan civilization, bangles had been an integral part of Indian wear. They were considered auspicious in the Indian tradition and came in all sizes and shapes. If one were to take a trip to Charminar in Hyderabad, it would be impossible to miss Laad Bazaar. This more than 400-year-old market, home to an exquisite range of glass and lac bangles, was considered one of the most important bangle markets of the country. The history of Laad Bazaar went back to the dawn of the Qutab Shahi dynasty (1518-1689).

The origins of Laad Bazaar were, however, unclear. But the local people had different versions of how it all began. Some people believed that the term ‘Laad’ came from Ladli Begum, the name of a queen belonging to the Qutab Shahi dynasty. They said that the king had had a bangle bazaar built for her which later expanded and came to be called Laad Bazaar. Others opined that the market had earlier been called ‘Lord Bazaar’. This over a period of time, became Laad Bazaar. Some were of the view that the name had been derived from Laad meaning lacquer, the primary raw material used to make the lac bangles for which the market was famous.

Over the years, Laad Bazaar had grown at a breathtaking pace. Being close to Charminar, a major tourist spot in Hyderabad, ensured that the market had heavy footfalls throughout the year. According to local bangle makers, there were about 40 shops in Laad Bazaar in the late 1980s. As of 2009, there were more than 300 shops. The shops provided employment to more than 15,000 people as compared to a work force of 200-250 in the late 1990s. Earlier while only a handful of workmen were involved in making bangles, in 2009 the industry provided a livelihood to more than 4,000 artisans.

Over the years, the bangle business had grown both in terms of size and product diversification. As of 2009, Laad Bazaar was famous not only for its bangles but also for a wide variety of arts and crafts, culture and religion, formal and informal skills, education and technology. Some of the shops in the market were quite diversified and dealt with a wide variety of products such as semi-precious stones, pearls, saris (traditional wear for females in India), jewelry, and wedding related items. This bazaar attracted and engaged technologists, computer professionals, and post graduates. It had become the networking point for businessmen of different states, cultural backgrounds, and religious affiliations...

Production Dynamics & Manufacturing Processes

The raw materials usually required for the manufacture of the different types of bangles was usually procured locally other than the lac, linseed oil, resin, and the glittering stones. A special type of lac was used for the purpose of making the lac bangles, especially in Laad Bazaar. Mohd. Meeraj, one of the reputed and experienced bangle manufacturers of Laad Bazaar, said this lac was imported from various parts of the country, mainly from the interior regions of Rajasthan, Maharashtra (Mumbai), and Odisha. The resin used for hardening the lac while making the blocks was mainly brought from the districts of Odisha, especially Behrampur...

Characteristics of the Bangle Market

The decorations on the bangles varied widely. The finished products were usually sent to the nearby shops for display in glass showcases. However, the shopkeepers kept the expensive bangle sets at home. Most often, the expensive sets were custom designed, as they were capital intensive. Most shopkeepers sold the bangles loose, leaving it to the customers to mix and match the bangles. They realized that most of the customers knew enough about the bangles which they were going to buy. While the thick bangles were sold singly, the thin ones could be purchased in sets of six, 10, or 12. The shopkeeper also offered to customize the bangles for buyers according to their preference...

Rising Demand

There were several factors that played an important role in the surge in the demand for bangles. While seasonal increases were seen during marriages and festivals, the increase in the influx of tourists and the growing popularity of traditional markets around Charminar also contributed to increased sales. The bangles were popular in international markets such as the US, the UK, Singapore, Malaysia, and the Middle-East too. Many local shop owners, who had participated in the exhibitions held abroad, were buoyed by the response they had received...

Challenges

The bangle market in general and Laad Bazaar in particular had undergone a sea change over the years in terms of demand and supply, competition, and exposure to international markets. It had also attracted educated youths into this business, and had benefited from networking and exhibition. On the other hand, the labor force’s living and working conditions and other factors putting pressure on the margins had been key concerns for the market...

Exhibits

Exhibit I-A: The Bangle Manufacturing Process
Exhibit I-B: The Bangle Manufacturing Process

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