May 2014

The warriors

Major players in the Indian Jewelry market

Making a mark and sustaining can be very challenging

The Indian jewelry market is largely fragmented with local and family independent stores (with whom customers have relationships over generations) constituting ~80% of the overall market. However, the past decade has seen the emergence of organized regional and national players. Between 2008 and 2013, the share of national chains grew to 5% (from 3%) while the share of regional chains rose to 17% (from 7%).

Brief profile of organized players

Tanishq

Tanishq is a division of Titan Company Limited, a company promoted by the Tata Group, in collaboration with the Tamil Nadu Industrial Development Corporation (TIDCO). It started its jewelry operations in 1994 to challenge the established family jewelry system prevalent in India. Today, Tanishq is considered one of the pioneers in branded jewelry and ornaments in India with a network of 162 stores spread across 90 cities. It has increased awareness among customers by introducing innovative technology like Karatmeter that helps customers gauge the quality of their gold. It has a robust supply chain (managing 9 tonnes of inventories) and a demand-forecasting mechanism that places the company in a position to tap new categories and design products according to consumers’ needs.

Malabar Gold & Diamonds

Malabar Gold & Diamond is niche Kerala-based jewelry retailer founded in 1993 by Mr. M P Ahmed. The company has a store network of ~110 stores, out of which 76 are in India and of which 33 are in Kerala. The group has achieved robust growth with a domestic turnover of around Rs 120bn (one of the largest players in India). It also operates on the franchise model (forms a separate private limited company), where it owns a minority stake in the franchisee and gets royalty on sales. However, Malabar manages the entire store network and supply chain. The stores are on an average 3,000 sq. ft. The company has been positioning itself as a value-for-money
jeweler with one of the lowest making charges in the industry.

Kalyan Jewellers

Kalyan Jewellers is the flagship of the 100-year old Kalyan Group with its origins in textile manufacturing and retailing. The group’s forayed into jewelry retailing two decades ago in 1993, and has a retail network of 51 stores with most of its stores spread across the four southern states. The company is considered to be leader with highest market share in Tamil Nadu (highest gold consuming state). It is known for its large-format stores and managing the largest inventory (keeping enough variety of all kinds of jewelry and designs). It has clocked a turnover of around Rs 100bn in FY13.

PC Jewellers

PC Jeweller is a leading north-based company with a strong presence across north and central India. It started operations in 2005 and is promoted by Padam Chand Gupta and Balram Garg. It offers a wide range of products but focuses on diamond and wedding jewelry. It operates through 40 stores located across 33 cities. PC Jeweller has adapted a four-pronged strategy to gain market share — retail expansion, focus on high-ticket wedding and diamond jewelry, managing gold price volatility through loans, and customer-oriented marketing initiatives. It has a sales density of Rs 200,000 per sq. ft. National Capital Region (NCR) dominates its domestic sales with 60%+ contribution. It has taken aggressive expansion (2.5x increase in retail space) over FY10-13 to 166,000 sq. ft. and has lined up further expansion over the next two years, which is expected to lower its dependence on NCR.

TBZ

Tribhovandas Bhimji Zaveri Ltd is a Mumbai-based jewelry retailer established in 1864. It runs its business through “TBZ – the original since 1864” brand name. It has 27 stores spread in 21 cities across 8 states. It gets around 70% of its revenue from gold jewelry and around 23% from diamond-studded jewelry. It was the first company to offer a buy-back guarantee on its jewelry in 1931. It has a dedicated design team, currently comprising 25 designers.

Joyalukkas

Joyalukkas India Ltd is a leading South India-based company engaged in retail jewelry business with focus on large-format stores. The company retails textiles, apparels, and accessories alongside jewelry, through its Wedding Centers located across Kerala. The Joyalukkas Group was established in the year 1988 by Alukkas Varghese Joy and began operations in the United Arab Emirates in jewelry retail business. It operates through 48 stores.