It’s difficult to change taste and tradition
Jan 11 2013 , Chennai
Interview: C K Venkataraman, COO Jewellery, Titan Industries
Your jewellery retail brands operate in two different segments of the market. What were the challenges for the two brands in their respective markets, which are dominated by unorganised and family-run businesses?
There has been a relationship between the customer and the family jeweller built over time. There has been a certain habit and certain level of comfort in buying from the same jeweller over generations. Bringing in a change to this system was our first challenge.
When we launched, our brands were more futuristic and were not mirroring the preferences of the present. The challenge for us was to change the taste of the customer and the customs. Apart from breaking the habit of buying, making us see in the right way was a tough task. Further, a national-level advertised brand was viewed by the price-conscious customer as more expensive than the usual traditional jeweller.
How did you face these challenges? What marketing strategies did you adopt for the two brands and how have they helped the growth of organised jewellery retailing in India?
The challenges continue to be there. In comparison with any other industry, jewellery sector is more local than national. Apart from its traditional image, jewellery design differs in each state. For Tanishq, there was a different set of competitors in each state. But we have been able to grow bigger nationally — we might be big in some cities, but still smaller in some others.
How have you seen the market evolving in these years and what is the contribution of organised players?
Tanishq was launched in 1996 and Gold Plus in 2005. Over these years we have been focusing on the relevance of merchandise, shopping experience and supply chain. But the industry has not evolved much during these years. The concept of seeing jewellery as a storehouse of value is still there. Fundamentally, gold has an intrinsic value, but it is primarily an accessory. Traditional jewellery cannot be worn too often. If a household has Rs 5 lakh worth of jewellery, wedding jewellery will account for around Rs 2-3 lakh. Thus 80 per cent of the jewellery can hardly be worn once in a year. Our daily wear products focus on making the investment more effective. For a woman, jewellery is an accessory like bags and clothes, and has to be stylish and fashionable. For the concept of wearable jewellery to get popular, it will take another three to four more decades.
We have also been seeing a higher level of confidence in the younger generation about the future. In the 1970s, salaries were lower; people were worried about the future and saved everything they could. Today’s generation borrows with credit cards to live today. Their emphasis on spending will help perceive gold as a beauty enhancer.
The times are tougher, demand has been lower in the past few quarters, there are curbs from the government side, and also illegal channels of gold imports are getting stronger. How do you see the scenario emerging for organised players? Do you think it will deprive you of a level-playing field?
It is possible. Higher customs duty gives enough room for smuggling. But we are not worrying too much about this. We are focusing on making competitive offers to our customers in our catchments. We try to understand their needs and keep them interested.
What impact will FDI in retail have on the jewellery sector?
There is nothing to worry, but it is an opportunity for us. There are no international brands, which can come into the market and offer superior choice. Unlike what has happened in the auto industry or consumer durables, where foreign brands have almost wiped out their Indian counterparts, the jewellery sector is more local in flavour. There are international brands like Tiffany or Cartier, but they are high-end brands and are out of reach of most Indian customers.
On the other hand, there is an opportunity when the larger department stores come in. For our work-wear brand Mia, we can explore a bigger platform for retail.
What will be the next phase of growth for Tanishq and Gold Plus?
There are a lot many towns in India where we have not reached. It is an old industry, deeply penetrated into each small town and the poorest of families. There are opportunities to expand into these smaller towns and into new segments. Our share in the market is not very large yet.
How do you perceive the future of organised jewellery chains in India?
The traditional jewellers are getting organised. Many of them have also gone public and many more will. Increased national presence, capital and more professional operational structure will help them attract better talent. We began as a niche player with a professional and organised set-up. When we are changing ourselves to embrace the tastes and preferences of the traditional Indian market as well, these players with good understanding of the industry are getting more professional and transparent. In the coming years, at least four or five such large jewellers will be the face of the Indian jewellery sector.