Minawala adopting innovative ways of promoting business. The example of Hazoorilal by Sandeep Narang is a case in point. Narang has one store in Greater Kailash Market in Delhi. However,

Organised retailing in India is a big business. According to the Boston Consulting Group, the current size of the market is K38 lakh crore ($570 billion) and is poised to double by the year 2020. The jewellery market alone is estimated to be over K3 lakh crore ($45 billion), according to The Economic Times. Another study by FICCI and AT-Kearney indicates that the Indian jewellery market is expected to reach close to K5.3 lakh crore ($80 billion) by 2018. The retail revolution started approximately a decade-and-a-half ago and has gained momentum since then. It started with the large-format department stores and quickly spread to branded single and multi-brand stores. Initially, there was euphoria all over. Big business houses such as Tatas, Birlas, Ambanis and Mittals joined the fray. It attracted professional talent to the sector as the pay scales were good. In the jewellery sector, the Tatas were the first to professionalise the business. However, it took 10 long years for Tanishq to report its first profit. While the Birlas have not forayed into jewellery, the Ambani-owned Reliance Jewels is yet to report significant profits. The South-based store chains such as Kalyan Jewellers, Joyalukkas and Malabar Gold and Diamonds have spread their wings from the southern region to pan India and the UAE. The last two years have been challenging for most jewellers due to uncertain demand for jewellery. What does it take to be a jeweller in these tumultuous times? How does one survive, grow, and prosper? ANIL PRABHAKAR investigates.

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he years 2007 through 2012 witnessed good growth in the Indian jewellery sector. Many corporate houses and

traditional jewellers announced their plan of opening 500 to 700 stores in a short span of two years. They were able to raise money through initial public offerings (IPOs). However, this early euphoria among the jewellery community lasted for about 4-5 years.

Indians’ love for jewellery is well known. The market for jewellery exists even in small towns and villages. In order to cater to the vast geographical area, it became important to have a chain of stores spread across India.

This phase was followed by panic, as after the rosy days, retailers realised that retailing in India is not an easy game. In order to succeed in the retail business one needs:• A long-term vision and commitment• Patience• Deep pockets• Operational focus• Execution capabilities• Efficient supply chain

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Retail View

Anil Prabhakar, an independent marketing consultant, is a luxury and lifestyle professional with domain expertise in the luxury, fashion, and lifestyle space. He is a science graduate with postgraduate qualifications in management and law. His association with retail in Dubai began much before it became a buzzword in India. His first assignment in jewellery retail was to set up shop-in-shops at department stores. Subsequently, he has handled various B2B and B2C assignments in the gem and jewellery industry across product categories such as gold, diamond, fashion jewellery, high-end Zambian emeralds and solitaires. [email protected]

It is not only important to expand geographically, but also be profitable.

The importance of the back end of the business has become apparent and this is a good development. The retail jeweller community has become more pragmatic. They are monitoring performance based not only on growth in sales, but also on parameters such as like-to-like or same-store growth over the previous year, and gross margin return on footage (GMROF), a measure of inventory productivity expressed as the gross margin divided by the total selling area.

Increasing competition and demand constraints means there is a pressure on margins. Secondly, there is a dearth of quality retail spaces in India. The rentals in most Indian cities are prohibitive. It is therefore important that each store contributes to sales and profits.

Closing down non-performing stores has become a way of life. According to Vijay Jain, CEO and board member of Orra, the company has closed down 10% of its stores since inception.

The mindsetThe jeweller community in India have adopted a traditional or conservative way of doing business. The jewellery industry is built on a relationship between the shop owner and the customer over a long period of time.

With organised industry players like Tanishq adopting an aggressive expansion strategy, the traditional jewellers having a single store were forced to take a hard look at their business models. The transition from single to multiple stores requires a change in the mindset.

Multiple-store owners are prepared to reach out to the target customers. They are opening up stores in cities and locations where their customers reside.

Single-store owners on the other hand want the customers to come to them. In order to do so, they have to devise ways and means to retain their existing customer base as well as acquire new ones.

Many single-store jewellers are reinventing their business models. They

Orra

are adopting innovative ways of promoting business. The example of Hazoorilal by Sandeep Narang is a case in point.

Narang has one store in Greater Kailash Market in Delhi. However, he is advertising not only in the national media such as Vogue, but also in international magazines such as Time.

His elder brother Ramesh Narang on the other hand has invested in a 10,000-sq-ft majestic showroom with a distinctive European décor, creating a neoclassical ambience with mood lighting and grand chandeliers spanning across two floors. It also houses a state-of-the-art workshop, and bridal and VIP lounges offering personalised service and impeccable hospitality.

The traditional mode of doing business in the jewellery sector involved a strict control on operations and centralisation of authority in making business decisions.

Opening multiple stores requires getting out of your comfort zone and taking a risk. It also means building a team and empowering the team members with decision-making authority in operational matters.

The change in mindset takes time and the transition is at times painful for the jewellers.

Proactive jewellers have made the transition from a single store to multiple stores successfully. They have opened stores aggressively in catchment areas


that are lucrative. The last five years have witnessed a growth of chain stores.

South-based jewellers have taken the lead. Their efforts have borne fruit and the following owners of retail chains have made an entry in India’s richest jewellers list:1. T.S. Kalyanraman of Kalyan Jewellers2. Joy Alukkas of Joyalukkas3. M.P. Ahammed of Malabar Gold and

Diamonds4. B. Govindan of Bhima Jewellers

Kirtilals and Khazana Jewellery are also among the leading jewellers based in South.

Jewellers in other regions have also followed suit and ramped up their presence geographically. Notable among these are TBZ – The Original, P.N. Gadgil Jewellers (PNG), Waman Hari Pethe and Orra in the West.

Senco Gold & Diamonds and PC Jewellers, based in the eastern and northern regions, have made their presence felt in major Indian cities.

LocationOne of the key factors for success in retailing is the choice of location. Most jewellers agree that consumers need a choice. They would ideally like to shop in an area that has a cluster of jewellery stores.

In most Indian cities, the traditional jewellery markets are saturated. There is no

(Above) Anushka Sharma wearing Minawala diamond earrings. (Right) The interior of Orra’s store in Bandra, Mumbai.

Orra


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room for new stores to come up. As new residential colonies develop, real estate developers create new markets by setting up commercial establishments and retail destinations. Setting up of shopping malls is thus a logical outcome of consumer demand.

Due to the shortage of quality retail spaces on high streets, jewellers have opened stores at malls as well. The choice of location has become crucial, and has developed into an art as well as a science.

A few innovative retailers have defied conventional wisdom and have chosen unconventional locations for their stores.

An interesting example is that of Ranka Jewellers, Chinchwad. Owner Tejpal Ranka opened a 15,000-sq-ft store in Chinchwad way back in 2008. What made the choice unusual was the fact that the store is located on the Mumbai-Pune highway. The main market is situated at a distance of 5 km from the store.

The logic was simple. Pimpri-Chinchwad Municipal Corporation (PCMC) is one of the richest industrial corporations. It was a market waiting to be tapped—the process, though, was anything but easy. After a lot of convincing, Tejpal’s conviction won over and in 2008, he launched a high-end jewellery mall in the area, right on the Mumbai-Pune highway.

The store turned out to be a game changer and wrote a new chapter in the distinctive history of Ranka Jewellers. Not only did the store become the virtual hub of jewellery in the PCMC region, but it also ended up positioning brand Ranka as a national brand. The store today draws an average footfall of 1,000 per day.

The business acumen of the Rankas is apparent from the fact that when they open a store on a high street, they ensure that it is one of a kind. This is evident from the way their store at Bund Garden Road in Pune has come up. Spread across three floors and with an area of 12,000 sq ft, the store has become an important landmark on that road. It stands out due to its sheer grandeur and size on a street that has leading jewellery stores such as TBZ, Tanishq, Orra, PNG, etc.

Says Vijay Jain of Orra: “When you are located in an important market such as Linking Road, Bandra, you have to make your presence felt. You should be situated at a strategic location and need to have a reasonably big store to make a statement. We have therefore, shifted from a small store to a larger store at a premium location in Bandra. In addition to the choice of location, we also pay a lot of attention to the design and layout of the stores. As visibility is important, your store façade needs to be inviting. Signage

Minawala

Exterior of Ranka Jewellers’ Bund Garden showroom in Pune.

Due to the shortage of quality retail spaces on high streets, jewellers have opened stores at malls as well. The choice of location has become crucial, and has developed into an art as well as a science.”

Minawala


therefore becomes a crucial element. The choice of furniture, fixtures and visual merchandising tools such as props and show windows add up to make a holistic experience for a shopper at Orra.”

Shehzad Zaveri of Minawala Jewellers has a philosophy of his own for success in retail. Zaveri believes that success does not depend on the resources. “Many people enter the world of business giving excuses about the lack of resources. It’s not the resources that matter. What makes the difference is vision and fire in the belly.”

While he has a store at UB City, Bangalore – a luxury mall that has Louis Vuitton and Rolex stores for company – he also has a store at Heera Panna, a shopping centre in South Mumbai. He is the only jeweller at that location.

Zaveri chose Heera Panna as a location in 1983 as it was economical. The place was frequented by wealthy consumers buying imported products, and that worked to his advantage.

At Bandra, Minawala is one of the few jewellers to have a terrace cafeteria to pamper his customers.

InnovationMost retailers agree that innovation holds the key for success in jewellery retail. Innovation can be in terms of the product

offering, a unique way of promoting it, and advertising.

A) Product innovationsOrra started as a diamond jewellery retailer. It has now emerged as a jewellery destination offering platinum and gold jewellery as well.

It has launched solitaires with 73 facets as against the usual 56. Branded as Orra Crown Star, the design is patented, making it an exclusive product.

The precision cut gives Orra Crown Star its’ unmatched fire and brilliance.

At Minawala Jewellers, the product is the hero. Zaveri’s “Flowers in Fire” line captures the very essence of nature— the charisma of colours, the intricacy of patterns, the whiff of temptation, and of course the passion of the designer himself.

Shehzad’s forte lies in international designs, which reflect his sense of celebration.

Ranka Jewellers struck gold literally for their innovation of designing the world’s most expensive gold shirt a couple of years ago. Designed by Tejpal Ranka, the 3.5 kg shirt crafted with 22-karat gold, Swarovski crystals, and imported velvet fetched a price of R1.27 crore ($192,000). It also made its way into the Guinness World Records.

Retail View

The terrace cafeteria at Minawala’s Bandra store.

Orra

The gold shirt by Ranka Jewellers.

Minawala

B) Imaginative promotionsJewellery, being an adornment product, is associated with glamour. Fashion shows and events are the preferred routes for brand promotion in the industry. In a star-crazy nation, an endorsement by a Bollywood celebrity breaks the advertising clutter, ensuring visibility for the brand.

Ranka Jewellers signed actress Vidya Balan four years ago. The endorsement deal was done just before her most successful film, The Dirty Picture was signed. This gave brand Ranka – a regional brand with eight stores – nationwide publicity and recognition.

Senco Gold, a Kolkata-based jewellery chain with 69 stores, has the star couple Prosenjit and Arpita as brand ambassadors. The regional strategy works for the brand in the East, as the bulk of their customers are Bengalis.

As the brand goes countrywide, they plan to sign up a national-level celebrity. In the interim, Senco is using stars such as Chitrangada Singh for store and product launches.

Adopting an innovative promotional strategy, Senco unveiled the Piku jewellery collection coinciding with the launch of the film Piku starring Deepika Padukone and Amitabh Bachchan. Such promotions add freshness to the brand appeal and are less expensive than signing up a big brand ambassador.

Orra, too, has adopted a regional strategy in brand promotion. For their


Senco Gold brand ambassadors Prosenjit & Arpita Chatterjee with Sankar Sen, chairman, Senco Gold.

Vidya Balan at a Ranka Jewellers’ showroom.

store located on Lakshmi Road in Pune, they worked with the well-known Marathi film star, Amruta Khanvilkar. A regional star provides an instant connect with the local populace; it is also a cost-effective mode of promoting a brand.

Celebrities want to look good at parties, film premieres and award ceremonies, and jewellers routinely adorn them with their jewellery. Zaveri has good contacts with star stylists, and provides exquisite pieces from the Minawala store to them. It is a mutual win-win and the most cost-effective mode of promotion.

C) Inventive distributionSetting up a chain of retail stores is an expensive and a time-consuming process. Tanishq set the trend of appointing franchisees all over India. It is an innovative and ‘asset-light’ mode of distribution. The costs incurred on inventory and rent is borne by the franchisee. The brand supports the franchisee by way of cost-sharing and promotions.

Franchising has become a popular movement even in small towns. Chandukaka Saraf & Sons Pvt. Ltd., a Baramati-based relatively unknown jeweller, has opened 14 stores in small talukas or administrative divisions of Maharashtra such as Sangola, Ahmednagar, Bhigwan, etc. by adopting the franchising route.

This is a significant achievement and demonstrates the strength and potential for organised jewellery retail in India.

Chitrangada Singh at a Senco Gold store launch.

Piku promotional material by Senco Gold.


Retail View

Orra

Orra’s Vijay Jain with Amruta Khanvilkar.

Waman Hari Pethe has showrooms in interior Maharashtra. Chandukaka Saraf & Sons Pvt. Ltd. has 14 stores across Maharashtra.

Mumbai-based Waman Hari Pethe has likewise opened showrooms in interior Maharashtra at places such as Ratnagiri and Alibaug.

E-commerce boomThe e-commerce boom has taken the nation by storm. Marketplaces like Flipkart, Snapdeal and Amazon have threatened the existence of brick-and-mortar stores.

Large-format department stores have therefore adopted an omni-channel strategy. Shoppers Stop recently joined hands with Snapdeal and plans to open a virtual Shoppers Stop.

In the online jewellery space, early adopters like Caratlane and Bluestone have created a huge awareness by aggressive advertising and promotions. Both the players have created online jewellery stores and attract investments from private equity funds. Ratan Tata in his personal capacity has invested in Bluestone, and Caratlane has already received four rounds of funding from private equity funds.

The current sales of all online ventures – including some initiatives by traditional players – tally to no more than $200 million (R1,256 crore). However, the share of online players is poised to grow exponentially in tandem with the total e-commerce market, which is estimated to be $22 billion by Credit Lyonnais Securities Asia (CLSA).

The big names in the jewellery industry today have realised that e-commerce is

the need of the hour. With the change in the customers’ perception and buying patterns, the retailers want to grab this opportunity and make sure that they are a part of this big e-commerce revolution. They also know that doing it in-house is almost impossible, since many of them have tried setting up their own e-store but have given up!

Jewellers are plagued with high overheads – soaring retail expenses and the rising cost of inventory– thereby leading to higher prices and a lack of fresh designs. Their catchment area often gets limited by their presence in the locality. Bringing together these two trends, using technology as the underlying backbone, is what led to the creation of Velvetcase.com.

Velvetcase is the brainchild of Kapil Hetamsaria and Runit Shah. Velvetcase is building a comprehensive platform for jewellers and designers from across the world to build their commerce-ready online brand stores.

Over 200 jewellery designer partners and legendary jewellers like Zoya by Tanishq, Anmol Jewellers, Ghanasingh Be True, Waman Hari Pethe, Minawala, etc. are already selling on the platform. Velvetcase offers them the best technology, digital marketing and fulfilment services to help them expand their businesses online and reach global audiences.

“It is our privilege to partner with the leading jewellers. We are excited to open up the endless possibilities inherent in


The glass window at Minawala’s Bandra store entrance.

Minawala’s Bandra store facade.

Velvetcase’s founders Kapil Hetamsaria and Runit Shah with Kriti Sanon.Orra’s showroom in Ghatkopar, Mumbai.

“The synergies from the platform that our partners experience allow them to singularly focus on their core expertise – which is product design and manufacturing – without causing any real disruption to their existing business.”

“It’s a different business altogether,” says Zaveri of Minawala. “We focus on the product while Velvetcase focuses on technology and marketing. It’s a perfect complement for the consumer.”

Last December, Amazon India launched its Precious Jewellery Store, which features close to 30 brands including Orra, P.N. Gadgil Jewellers, Diti, Kirtilals, Popley, Tara Jewellers, and the Tanya Rossi Italy line of precious

jewellery specially created by couture jeweller, Rose Group.

Jewellery being a high involvement product, the touch and feel factors are very important. Jewellery selling requires a high level of service. Moreover, being a high-ticket item, the percentage of online transactions will be low.

However, online platforms will make it easier for the consumers to shortlist the products. They will also be able to compare the design and prices of products from competing jewellers. This will save their time, energy and resources. The jewellers on their part will be able to reduce their costs on inventory and will have to open fewer offline stores.

the online platform. Our expertise in technology, marketing and global logistics is the perfect complement to our partners’ legacy of over 1,000 years in the world of jewellery,” notes Runit Shah, co-founder and COO, Velvetcase.com.


Retail View

(Clockwise from top right) Kirtilals’ showroom in Hyderabad; (from left) musician Jacqueline Shave, Ustad Amjad Ali Khan, creative director Seema Mehta and director of strategy Suraj Shantakumar unveiling a collection; Kirtilals maintains parks at a number of airports in southern India; (top left) Subramaniam, vice president Rajendran, and Suraj Shantakumar launching the iPad application.

Kirtilals is one of the pioneers of organised jewellery retail in India. The Coimbatore-based company started its first store in the city way back in 1939 and went on to open showrooms across the southern region, including cities such as Chennai, Hyderabad, Kochi, Madurai, etc. It is the first and only company in South India that has fully integrated operations, from mines to market. Since inception, the company has focused on innovative designs. The legendary designer, the late Ambaji Shinde, designed for Kirtilals in the 1960s before he started working for Harry Winston.

Today, each of Kirtilals’ 11 stores in India has a jewellery designer, who interacts with the customers. The company redefined the experience of jewellery shopping with exclusive lounges at its showrooms in Hyderabad, Kochi and Bangalore.

It is the first company to launch an iPad application with a ‘virtual retail experience’ concept that lets customers visualise how a piece of jewellery would look on them when adorned. Customers can browse through 5 lakh designs from the firm’s

databank or choose their own design. The company has also tied up with Amazon to test the waters in the e-commerce space.

During its 75th anniversary last year, Kirtilals treated its customers to a musical concert featuring sarod maestro Amjad Ali Khan and his two sons, Aman and Ayan Ali Khan. Ustad Amjad Ali Khan also unveiled a special jewellery collection at its store.

As part of its CSR activities, the company maintains parks at airports in Coimbatore, Madurai, Chennai, Cochin, Tirupati, Vizag and Vijayawada. This gives the company a unique positioning and clutter-free visibility. n

Kirtilals: retail trailblazer

As part of a proactive consumer education initiative, Kirtilals lets patrons test their diamonds in De Beers’ AMS machine, which screens for potential synthetics and simulants.

Documents

Minawala adopting innovative ways of promoting business. The example of Hazoorilal by Sandeep Narang is a case in point. Narang has one store in Greater Kailash Market in Delhi. However,