Pratibha Institute of Business Management

Chinchwad, Pune

Department of MBA

Case Study

CCE-2

2021-22

MBA: SEM I

Subject- Economic Analysis for Business Decisions 103

Submission Date- 20/02/2022

Economics of Bangle Market

Bangles are considered an integral part of the traditional wear for women and girls in India. This much
coveted accessory for women is in great demand, particularly during weddings and other festive
occasions. This case is about one of the major markets for bangles in India located in the Old City area of
Hyderabad. Housed in the winding streets near Charminar, Laad Bazar (also known as the street of
bangles) is the site for manufacturing bangles. These bangles are then retailed in big and small stores
that line the road leading to Charminar.

Laad Bazaar is especially known for its colorful "lac" bangles prepared from hard lacquer sealing wax and
embedded with beautiful colored stones and sequins. Over the years, the bangle market in general and
Laad Bazaar in particular has undergone a sea change in terms of demand and supply. Predominantly
dependent on impoverished skilled artisans who had inherited the skills of bangle making from their
ancestors, the market has witnessed surging demand in recent years. While earlier this business was
dominated by a few artisans and the volume of business was carried out on a micro scale, as of 2009, it
had grown into an industry having over 4000 artisans. It provided a livelihood to around 2000 families,
directly or indirectly. However, as of 2009, the market also faced some tough challenges and there were
many potent factors that were putting pressure on margins.

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..

Questions
1 Explain the issues and challenges related to the bangle market in India. 10 Marks
2 Analyze and Explain the structure of the bangle market. 10 Marks
3 Explain the various factors affecting demand and supply of the bangle market. 5 Marks