Tanishq, the branded jewellery brand from Titan Industries, has brought about a transformation in the way jewellery is bought and sold in India. In an exclusive interaction with IndiaRetailing, Sandeep Kulhalli, vice president-retail and marketing, Titan Industries Limited, talks about the advantage Tanishq has over its competitors in the branded jewellery segment and the company’s roadmap for the Zoya brand.
How big is the branded precious jewellery market in India? What is the share of Tanishq in it?
This industry is very fragmented. According to a recent study by KPMG, the Indian jewellery market is worth Rs.21 billion and a major pie of it is dominated by traditional retailers. There are only three brands with a pan-India presence – Reliance Jewels, Tanishq and Gitanjali Jewels. But we definitely dominate the branded precious jewellery market.
What is the share of the jewellery segment in Titan Industries?
Approximately 65-66 per cent of the total revenue comes from the jewellery business.
Despite a 22 per cent hike in gold prices, Tanishq managed to make profits in the first quarter of the current fiscal. What contributed to the 49.6 per cent growth in Q1?
We are the oldest national-level branded jewellers in the market. As the brand is getting older, it is also getting more popular and stronger. These factors are resulting in the increase in our customer base. Our sales are growing by volumes – the profitability has grown 40-60 per cent in the top line. The last two years have been very good for Tanishq.
Does Tanishq do equally well in its plain and studded jewellery segments?
Yes, both studded and plain jewellery are growing at a good pace. The rate of growth, though, is much faster in studded jewellery than plain jewellery.
Do you think Indians’ obsession with gold is over? Are they ready to splurge on diamonds, considering their low resale value?
Indian consumers are traditionally driven by plain gold, and in certain regions gold is indispensable. Plain gold is very popular in South India, but in the Marwadi community, for instance, diamond jewellery is very significant – they like buying high clarity diamonds and solitaires.
The Indian jewellery market is estimated to be worth Rs.21 billion, out of which Rs.4 billion is the diamond jewellery market, but it is growing at a much faster pace. In the coming four years, the jewellery market will be worth around Rs.27 billion, out of which Rs.6 billion will be the diamond jewellery market. Definitely, the resale value of gold is much higher than that of diamond, but now a lot of people are buying diamonds because they have become affordable.
Which are the high growth markets for the Zoya brand?
Zoya is for the elite in cities such as Delhi and Mumbai. It is a luxury brand and people in these metros don’t mind spending on jewellery. So, Zoya can do extremely well in these two cities. And the kind of response we have got from the two markets is very good. However, we still can’t talk about the same-store growth because Zoya is a very young brand; it was launched last year.
Will you expand Zoya in tier II cities?
No, Zoya is a brand for urban elites; right now we are not planning to take it to tier II cities.
Do you plan to franchise Zoya?
No, we will not franchise Zoya. This fiscal, we are not even planning to open any new stores. We franchise Tanishq because it is a franchisable model, but Zoya is going to be company-owned only.
Are you planning to expand Zoya in the international market?
It’s too early to talk about international expansion. We want to make our base very strong in India before thinking of international expansion.
Tanishq has an image of a very serious jewellery brand. Any plans to get into the semi-precious jewellery market?
We are very happy with our fine jewellery image. By and large, we want to maintain a similar image. But we have started making light gold jewellery also in which we use lesser clarity diamonds. Prices of these jewellery will be less than our other products. But we don’t plan to venture into silver jewellery or semi-precious segment of the jewellery market.
