Asian Research Consortium

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1 Asian Research Consortium Asian Journal of Research in Marketing Vol. 5, No. 2, April 2016, pp ISSN Asian Journal of Research in Marketing Business Strategies of Traditional Jewellers in India- An Overview Dr. Mariam Noronha Abstract Assistant Professor, Ness Wadia College of Commerce, Pune. Brands in Indian jewellery were launched in the early nineties. From then on the traditional jeweller who used to dominate the retail of jewellery has contended with the launch of many brands across varying specializations, price ranges and market segments. The introduction of brands in the Indian jewellery business is the backdrop for this study. Branded jewellery has led to the professionalization of the business per se while presenting the customer with many choices. This competitive scenario presents numerous opportunities for branded as well as traditional jewellers seeking to expand their presence in India and abroad. This chapter presents an overview of strategies being employed by traditional players to compete with branded players across India. Conclusions in this regard have been drawn and presented. Keywords: Indian jewellery business, traditional jewellers, traditional players, branded jewellers, branded players, business strategies Introduction India was one of the first countries to start making fine jewellery from minerals and metals and even today, most of the jewellery made in India is handmade. The industry is dominated by family jewellers, who constitute nearly 96 per cent of the market. Organised players such as Tata with its Tanishq brand, have, however, been growing steadily carving a 4 per cent market share. As India s jewellery market matures, it is expected to get more organised and the share of family jewellers is expected to decline. 56

2 In a study conducted across cities and towns in India, titled Indian Consumer in February, 2006 by CLSA (Credit Lyonnais Securities Asia) *, 66% of the respondents said that they would prefer branded jewellery over the offerings of the local jeweller in future. On the other hand, in the Solitaire TNS (Taylor Nelson Sofres) Survey 2007 which surveyed 600 women respondents in three major cities, Delhi, Mumbai and Bangalore, 184 respondents stated that the traditional/family jeweler was their most preferred source of purchase while 74 stated that the individual goldsmith was their most preferred source. Only 37 respondents said that they would prefer buying jewellery from malls while 42 said that they prefer branded jewellery stores. In the face of such contrasting opinions, one is prompted to think about the future of the traditional jeweller who has been one of the cornerstones of Indian society. Will he continue to be trusted by people and thrive in the face of stiff competition from a plethora of jewellery brands? Traditionally India has a rich heritage of family jewellers who have successfully built brands and established multi-city presence. Many of the well established traditional jewellers in India come from families who have been in the jewellery business for many years now. The transition in the jewellery business can be analyzed from the point of view of strategies relating to various aspects of business management and administration. Objectives: This paper has been written with the following objectives in mind: 1. To take a look at how traditional and home grown jewellers are dealing with competition from branded layers. 2. To present an overview of the business strategies of traditional and home grown jewellers. 3. To draw conclusions in this regard. Working Definitions: Following are the working definitions for the purpose of this chapter: Traditional Jewellery Business Traditional jewellery business is the business carried on by jewelers whose families have been in the business of jewellery making and selling for generations. Traditional Jewellers The term traditional jeweller includes jewelers whose families have dealt in articles made of gold and artisans who make such articles. Such dealers or manufacturers of gold articles may also be engaged in banking or other financial business. * CLSA. Indian Consumer. February, Retrieved January 4, 2007 from CLSA Website, GJEPC. What Women are Buying and Other Revelations, The TNS Solitaire Survey, 2007, Retrieved July 24, 2007,from the GJEPC Website: 57

3 Branded Jewellery For the purpose of this chapter branded jewellery refers to jewellery dealt in or sold by branded jewellery companies. Branded Jewellers/Branded Jewellery Companies The term branded jewellers/branded jewellery companies refers to jewelers/jewellery companies which are owned and managed by corporate groups. They are not owned and managed by jewelers whose families have been in the business of making and selling jewellery for generations. Methodology: This paper is based on secondary data collected from sources like books, journals, reports, publications of jewellers associations, magazines and the internet. In order to understand how traditional jewellers are competing with brands an overview of the strategies being employed by some prominent traditional jewellers in India are as follows: Ganjam The history of Ganjam dates back 400 years, when a group of merchants trading in precious stones are said to have migrated from Ganjam district in Orissa. In 1942, Ganjam was appointed jeweller to the Maharaja of Mysore by a royal decree. Ganjam was also invited by the Maharaja of Nepal to train goldsmiths in his country and to design and make jewellery for the royal temple in Kathmandu. In 2002 the group established concept stores under the name Ganjam by Design which was a logical progression of how the Ganjam brand has evolved. This venture reiterates their pioneering initiatives in jewellery retail and adding creative expression to high-end jewellery. The jewellery lines are: Ganjam Heritage Design with Burmese rubies, mines of which are now extinct. The Ganjam Class Line is inspired by the traditional Indian ikkat weave. The Ganjam Pallette Line blends platinum with onyx, peridots, blue topaz and diamonds. The Ganjam World Line is influenced by the Italian tradition. There is a Ganjam Men's Line and the Kazuo Ogawa (a leading Japanese designer) Line. Ganjam has actively worked to position itself distinctly in the luxury jewellery segment and hired Optimum Media Solutions (OMS) as its AOR (Agency of Record) in Prior to this the business was handled by Starcom. The brand strategy and creative duties for this brand are handled by a London based brand consultancy firm, Large Smith & Walford. The group uses mainly print, outdoor, below-the-line activities and event promotions such as fashion shows in its media plan. Ganjam also claims to be the only jeweller in India to have converted its diamond stock into F diamonds. F refers to the colour of the diamonds. F diamonds are premium in quality and very rare, making the jewellery that much more exclusive and premium. Agencyfaqsnewsbureau. (December 21, 2006). OMS bags the media duties for 100 year old jewellery brand, Ganjam. Retrieved December 22, 2009, from the Agencyfaqs Website: 58

4 While other jewellers may offer F diamonds only as part of their jewellery offering, Ganjam is one of the few in the world to offer F diamonds across its line of jewellery. Usually jewellers offer G, H even I colour diamonds, which are lower than F. Ganjam worked for almost 2 years to convert its diamonds into F stock. Driven by the need to establish a national presence Ganjam has worked on expansion outside the home State of Karnataka through the boutique route. The strategy was to establish boutiques in leading luxury hotels in the top metro markets beginning with Bengaluru. With plans to set up stores in the southern cities of Hyderabad, Chennai and Kochi, besides looking at the possibility of tapping wealthy hinterland markets like Chikamagalur within Karnataka, Ganjam mapped out a strategy for multi-city presence **. In the recent past, Ganjam became the only Indian jeweller to have been invited to the celebrations of 50 years of Indo-Japanese diplomatic relations. In 2010 Ganjam jewellery became a part of Citizen's growth strategy to bring more international brands to Japan and to offer its customers a varied flavour from overseas. G R Thangamaligai G R Thangamaligai was founded in 1964 by G Rajendran in the then fast-growing shopping hub of Chennai (formerly Madras). Slowly G R Thangamaligai gained popularity for the purity of its ornaments, wide choice of designs and consistent approach to delivering customer delight. To cater to its growing customer base the expansion of its retail outlet became necessary and a bigger showroom was established. Silverware has its own separate floor, with one of the largest collections of silver products in India on a single floor. This was followed by the addition of a new showroom was added on Coats Road, T Nagar, Chennai. This showroom has one of the largest diamond jewellery collections on one floor in Chennai. The popularity of GRT s silver collection led to the creation of its silver brand, 'GRT Silversmith' and now there is an exclusive store devoted to it. 'GRT Stylus' brand is targeted at young women between 18 and 35 years, and offers gold and diamond collections for work, casual and formal wear. Their logo is well designed and developed with by three golden circles suggesting infinity, fluidity, and a willingness to encompass change. The intensifying hues of gold symbolize warmth, which is the hallmark of GRT. The Hindu Businessline. (November 5, 2011). Ganjam plans expansion via boutique in metros. Retrieved December 15, 2011, from the Hindu Businessline Website: ** The Hindu Buisnessline. (December 22, 2002). Ganjam's new store targets connoisseurs. The Hindu Buisnessline. (March 5, 2010). Indian jewellers Ganjam all set to dazzle the Japanese market. 59

5 The next generation is driving growth of this brand through G Rajendran's sons, G R Anantha Padmanabhan and G R Radhakrishnan; who have been instrumental in establishing showrooms in Tirupathi, Hyderabad (Andhra Pradesh) and Anna Nagar (Chennai). Showrooms are now being planned in Bengaluru, Hosur and Visakhapatnam. From a small jewellery store, GRT today has expanded its range of products, stores, established multi city presence and has diversified in to hospitality, agriculture, education, trading and nonconventional power. C. Krishnaiah Chetty & Sons In 1869 Cotha Krishnaiah Chetty established C. Krishniah Chetty & Sons and started off by making jewellery from special tiny coloured beads. Beautiful pieces of jewellery soon found patronage in the Royal families of Mysore, Sandur and Travancore, who became a part of his discerning clientele. Also, his work was highly talked about in the British community located in the Cantonment area. Apart from a wide collection of its own in house jewellery C. Krishniah Chetty & Sons also deals in WGC Azva collection and Forevermark Diamonds. An innovative aspect of its offerings include jewellery care products like creams and sprays which stand out as no other jeweller s website offers these products. C Krishnaiah Chetty & Sons launched a steel-based Denim and Diamonds collection in 2011, with prices starting at Rs 3,500. Another noteworthy aspect is that C. Krishniah Chetty & Sons also won Best Employer of the Year This is an example of how well traditional jewellery stores are being managed and manned these days. Jolyalukkas The Joyalukkas Group owns a popular regional jewellery brand besides owning various businesses in India, Britain, Singapore, UAE, Saudi Arabia, Bahrain, Oman, Kuwait and Qatar which include fashion and textiles, money exchange, luxury air charter, malls and real estate***. The Limca Book of World Records has recognized the Joyalukkas Chennai showroom as the largest jewellery showroom in the world. In 2013, Joyalukkas turned 25 in the Gulf and 10 years old in India. Joyalukkas has also been voted as a superbrand for four years in a row in the UAE. Expansion plans are afoot with 60 shops in India being planned in the next three years. In January, 2013 Joyalukkas appointed four film stars, R Madhavan, Suresh Gopi, Sudeep and Allu Arjun as their brand ambassadors to connect with customers in four regions of India where they have branches. These stars were *** Emirates247.com. Satish. V.M. (January 9, 2013). 4 brand ambassadors for jeweller Joyalukkas. Retrieved February 10, 2013, from the Emirates247 Website:

6 appointed after extensive research in the south Indian states of Tamil Nadu, Kerala, Andhra Pradesh and Karnataka to gauge their popularity. The jewellery retail chain is also planning to open 60 shops in India in the next three years. Malabar Gold Malabar, established in 1993 with a store in Calicut, now has 64 outlets across southern India and West Asia. In 2012 Malabar Gold underwent a brand makeover as it moved to expand its presence globally. The new look and identity was conceptualised by the WPP group company, Brand Union over a fifteen month period aimed at raising the international appeal of the company. The change was reflected in the brand's logo, retail ambience, design and products and the company s name was changed to Malabar Gold and Diamonds to signify the retailer s leaning towards diamond retailing. From $20 million 2002, the company's turnover grew to $2.4 billion in The group plans to expand in the Far-East (Singapore, Indonesia, Malaysia) and subcontinent countries of Bangladesh and Sri Lanka as well as in the western markets of London, the US and Canada. Domestic expansion has also been given due attention with stores planned in Delhi, Mumbai, Ahmedabad, Kolkata, Punjab and Haryana. In 2012 Malabar Gold came up with a four-year expansion plan to raise its retail network to 220 outlets from 64 with an investment of Rs 3,500 crore. With plans to invest $700 million over four years to expand its retail network to 220 outlets globally. The money will be raised from private investors (consisting of promoters, high-net worth individuals, non-resident Indians and business people). Malabar already has an investor base of 1,600. Their business model rests on bringing local celebrities on board as partners; almost all the showrooms are separate entities and have local celebrities as partners. In this arrangement, in addition to the promoter family's investment in each store, these local celebrities have anywhere from 2-10 per cent stake in the respective entity. Since its inception in 1993, this twenty year old brand has expanded from a single store in Khozikhode to 85 stores in 7 countries. It has taken up CSR (Corporate Social Responsibility) initiaves in the arena of women empowerment, medical support to the needy, housing support for the homeless, support for education and marriage to economically weaker sections of society. On Kannan, Swetha. (March 25, 2012). Malabar Gold undergoes brand makeover, plans global expansion. The Hindu Businessline. The Hindu BusinessLine. (March 31, 2012 ). Malabar Gold to invest Rs 3,500 cr for expansion. The Hindu Businessline BusinessLine. (September 26, 2011 ). Malabar Gold ropes in local celebrities, industrialists for flagship store in Chennai. The Hindu Businessline 61

7 completing 20 years in business in 2013, the group announced the deployment of 10% of the profit of companies of Malabar Gold to CSR from the year 2013 onwards ****. Popley Another big name among traditional jewellers in India is Popley. The Popley Group has 3 verticals of store formats under which it carries out its Retail Operations these are: Popley & Sons (Popley 22), POPLEY La Classique and POPLEY Diatime. Popley & Sons (Popley 22) is the traditional jewellery retail format through showrooms and over the counter sales. POPLEY La Classique Luxury Branded Jewellery, Watch & Accessory Retail is an extension into managing Mono Brand Boutiques of the same profile of brands. The First OMEGA Boutique for India was launched by the POPLEY Group in association with OMEGA by the President of OMEGA Mr. Stephen Uruquhart. Also to its credit is a TAG Heuer Boutique in association with the LVMH Group. POPLEY Diatime is Pret Luxury & Braded Jewellery, Watch & Accessory Retail and it was the 1st store to launch Hamilton Watches in India. POPLEY Diatime has a strategic tie-up with Shoppers Stop Limited as shop in Shops for its various brands nationally. The Departmental store chain shares retail space in Delhi, Mumbai & Bangalore across its various stores. Each of these endeavors has an online presence in the form of a website. As far as its promotional initiatives go the group has enrolled amongst its team of professionals both in-house and outsourced Media Buying, Advertising & PR agencies in a bid to communicate at all levels optimally using a 360 Degree approach. More significantly, The Popley Group plans and implements effective and unique strategies in line with regional requirements which is imperative in a diverse market like India where regional preferences for jewellery are an important part of the product mix. Kalyan Jewellers Kalyan Jewellers is the flagship of the 102-year old Kalyan Group with its origins in textile manufacturing and retailing. The group forayed into jewellery retail in 1993, and had retail store strength of 45 showrooms across the 4 southern states and Gujarat in Kalyan Jewellers is in the midst of a major expansion spree and poised to enter Gujarat and Maharashtra in Their target is to establish 100 showrooms by The expansion plan has been carefully developed and is being implemented in a phased manner with a combination of stores in Metro s and tier one and two cities. For instance a showroom in Mumbai was followed by Pune, Ahmedabad was followed by Vardodra and Rajkot. **** Indiainfoline.com. Ved Yash, (March 28, 2013). Leaderspeak TS Kalyanraman Jewellers. Retrieved March 29, 2013, from the Website: Kalyanaraman-Chairman-Kalyan-Jewellers/

8 Kalyan Jewellers draws up a strategy prepared after three rounds of market surveys. They don't wait to be surprised and know exactly what is going to happen in each market beforehand. Wherever they go they try to get as close as possible to the local community there. This starts with the selection of brand ambassadors who command respect there and the appointment of employees who are well-versed with local cultures. Regional references also dictate products offered by the group reflect in nuances like gold maang tikas which are popular in North India while gold puchhootal fashioned in gold and set with gems, forms one of the most admired hair ornaments in Tamil Nadu. Kalyan jewellers has been a path breaker as far as selection of a brand amabassdor goes, the brand chose to go with a male brand ambassador because they have many educational campaigns which will help the jewellery business as a whole. All their ambassadors in the South are superstars and sons of legends and they now have Amitabh Bachchan on board. They also have many sub-brands and have product specific campaigns for which we wanted the most beautiful women in the world for which they have Aishwarya Rai Bachchan, an icon for the same. They attach great importance to improving the customer s in-store experience by taking great efforts in this direction. On the sales floor, they ensure it s easy for customers to find the items they are interested in and items similar to them; there are separate sections for gold and diamonds. They also invest in training their staff as they realize that their employees represent what the brand stands for on the customer service front. They are trained to educate and serve customers without neglecting nor overwhelming them *****. Kalyan has adopted a pioneering approach to educate the public regarding cheating and malpractices in gold quality and pricing through their campaign Fight against Impure Gold. Their annual advertising budget for is approximately Rs 100 crore and the ratio between television and print will be in the ratio 60:40. They have actively worked to generate consumer awareness with regard to hallmarking and certification of jewellery. Their video campaign, My Gold, My Right featuring Amitabh Bacchan was aired on television and has been uploaded on their YouTube channel. Other celebrities who have featured in their television and video campaigns are Aishwarya Rai and Sushmita Sen. Ramavarman, T. (April 6, 2013). Gilt goes North. The Crest Edition, The Times of India. ***** Impactonnet.com. Sabherwal, Simran. (March 31, 2013). All that Glitters is Gold. Retrieved April 2, 2013, from the Impactonnet Website:

9 TBZ Established 1864, in a tin shed at Zaveri Bazar, TBZ has grown to in a brand with multi city presence. Late Shri Bhimji Zaveri s vision was to give India the jewellery it deserved, that of uncompromising quality and craftsmanship. Late Shri Tribhovandas Bhimji Zaveri, his son expanded the business by opening new showrooms. Late Shri Gopaldas Zaveri, his grandson revolutionized the Indian market by offering customers a full value gold buy-back scheme. Today under the guidance of Mr. Shrikant Zaveri, a fourth generation jeweller, TBZ has successfully transformed into a modern and innovative jewellery maker. Now known as TBZ-The Original the brand also owns designer boutiques by the name KRSALA situated at Pune and Banjara Hills, Hyderabad, which sell Jadau and the diamond jewellery. Their presence in the Indian market has been marked by a number of firsts - the first to offer buy back guarantee on gold jewelry, the first to promote the concept of light weight jewelry and the first to offer certified solitaire diamonds. They offer a wide choice of jewellery for every occasion, from a woman s everyday wear to delicately crafted pieces for the biggest day of her life. The collections include gold, diamond platinum, Dohra (can be worn in 2-3 ways), Surprises, Ria (trendy sliver jewellery), Azva (WGCs jewellery collection) and watches. Jewellery for men and women is available and gift cards are also an option. In 2010, on the occasion of Ganesh Chaturthi they came out with a range of Ganesha pendants called The Ganpati Collection will range between Rs. 3000/- onwards in Gold and Rs 12,000/- onwards in Diamonds. It was the first time that TBZ The Original had added a special range of 22 karat gold accessories like crowns, armlets, waist belts, durva, modak etc, to adorn Lord Ganesha during the festive season. Their retail footprint in India is dotted with 21 stores across the country. Their stores are staffed by highly trained personnel who ensure that every customer has a unique in store experience. They have also introduced savings schemes Kalpavruksha Plan, Gold Plan and Suvarna Srishti. They advertise in print, outdoor media, are present on Facebook and Twitter and have a dedicated website. Observations and Conclusions Following are the observations and corresponding conclusions drawn from the analysis of secondary data: Indiapwire.com. (August 31, 2012). TBZ -The Original brings exclusive Ganpati pendants in gold and diamond this festive season. Retrieved February 16, 2012, from the Indiapwire Website: 64

10 1. It was observed that branded jewellers are using various product, price, distribution and promotional strategies to compete with other brands and traditional jewellers. Conclusion: One can conclude that branded jewellers are employing comprehensive strategies in all areas of business. They are working on establishing their presence on the internet with websites and online stores. Besides that they are working on spreading their network to Tier II and Tier III towns as well as rural areas. By working on in-store placement with traditional jewellery stores and FMCG stores they are using the existing network of retailers and in this way are able to expand rapidly without incurring too much of a cost. Their financial strength is evident from the promotional methods used by them. All branded jewellers are using similar strategies to compete. 2. It was observed that brands are referred by younger women for smaller purchases. For high value purchases buyers still refer traditional jewellers. The paradox in most cases is that many buyers feel that brands may not entertain them if they want to purchase low cost jewellery or smaller items. Conclusion: One can conclude that there is no brand loyalty in the Indian jewellery market. 3. From the examples of traditional jewellers who are operating across the country as well as in Pune city it has been observed that traditional jewellers have successfully built in-house brands. Conclusion: One can conclude that they are working very hard to compete with brands. The introduction of a wide range of products, quality initiatives like hallmarking and certification, installment schemes, affordable lightweight jewellery, contemporary designs, websites, online stores, departmentation, expansion pan India and abroad, enhancing in-store experience, training of staff, celebrity endorsement and better positioning are all helping them to retain and build market share. 4. It was observed that most traditional jewellers have been in the family for at least two or more generations. This is probably why they have greater experience and exposure to the business. On the other hand, brands are a relatively new phenomenon with most brands being introduced only in Conclusion: One can conclude that it this sense, traditional jewellers have the advantage of a head start in terms of longer existence during which they have built a client base that has been coming to them for generations (in most cases). This trust and long standing relationship with customers is their core competence. Changes like new products, change in pricing policies, expansion, advertising and promotion on the part of traditional jewelers can be classified as competitive advantages and can be replicated by branded players, trust and long standing customer relationships is something brands cannot replicate. 5. It was observed that if brands have used celebrities in advertising and promotional endeavours, traditional jewellers who have the financial prowess and vision to grow have also roped in celebrities as brand ambassadors. Conclusion: One can conclude that, both branded and traditional jewellers are cashing in on celebrity power to position and promote themselves. 6. It was observed that most brands and traditional jewellers are using technology and social media to gain visibility and widen their reach. Online sales have also been undertaken. Conclusion: One can conclude that in times when e-commerce is becoming a way of life, brands and traditional jewellers are also using websites and social networks to drive sales. 65

11 7. It was observed that most brands and traditional jewellers are launching theme based collections and installment schemes. Conclusion: One can conclude that the use of a central idea to build a collection is being used to appeal to the aesthetic sense of buyers. It could also be a strategy to spread designs over different seasons and retain the interest of buyers over time. The introduction of installment schemes is more of a necessity in times when prices of precious metals like gold and silver are on the rise. Such schemes put the purchase of jewellery within the reach of buyers and encourage planned purchases. 8. It was observed that, brands and traditional jewellers are working on brand building initiatives through advertising and the use of logos and slogans. Conclusion: One can conclude that brand building is no longer the sole preserve of branded jewellery companies. A number of traditional jewellers have realized the importance of the same and have registered in-house brands. They have worked to enhance the effectiveness of advertising through the creation of logos and crafting slogans. 66