From a small diamond trading company to the country’s largest jewellery brand, the company has traversed a long way within a short span. This growth is propelled by Mehul Choksi, CMD of Gitanjali Group, through his foresight and inherent business sense. The saga goes on.
A little over four decades ago, in 1966, a small diamond trading company was born in Mumbai. The first step in a memorable journey had been taken.
Things developed rapidly over the years, with many milestones being passed on the way. The young company became one of the early De Beers Sightholders in India and by the early 1980s it had grown into one of the country’s leading diamond manufacturers and exporters.
That was when the second phase of the journey began, and it coincided with the entry of Gitanjali’s current CMD, Mehul Choksi. Not even out of college, the new head had a clear vision - the future lay in transforming the company into a major jewellery player, and he soon began guiding it in that direction, setting up a jewellery manufacturing unit in the fast developing Santacruz East Export Processing Zone, now simply known as SEEPZ.
India’s first branded jewellery line
But jewellery exports was not the only thing on the radar, and foreseeing that the Indian jewellery market, then massively dominated by plain gold ornaments, had enormous potential, Choksi began laying out his plans for entry into India.
Like many other things that the Gitanjali Group has done since then, the move towards turning this vision into a reality was as path-breaking as it was dramatic - the launch of India’s first branded jewellery line.
Research had indicated that the market was not yet ready for branded jewellery, that too a diamond studded line. But instincts suggested otherwise, and Gili (a combination of the first two and last two letters of Gitanjali) was born.
The newborn had a very difficult start - most traditional jewellers were eager to stock the products in their stores, but equally firm that it could not be under an independent branded counter. It was India’s first department store chain, the newly launched Shopper’s Stop, which found India’s first branded jewellery line to be the perfect partner for its needs.
There was no looking back from then, and the new course which was to build Gitanjali into one of the largest fully integrated diamond and jewellery manufacturers in the world had been decisively set. Fresh milestones were crossed, as D’damas was launched and Nakshatra, Asmi and Sangini were acquired. Other brands joined them and in no time there was a range of about 30 branded offerings with different types of jewellery at varied price points catering to virtually each and every consumer niche in the market.
Cut to early 2010. The Gitanjali Group has clearly established its position as a leading jewellery player, and most of the brands including Gili, Nakshatra, Asmi, D’Damas, Sangini, Diya, Maya Gold and others have all won for themselves a place in the consumer’s hearts. Gitanjali’s brands are easily the most visible jewellery brands in the Indian market today.
Quality, reliability and trust: the core value
But it is not only visibility that has made Gitanjali a household name among jewellery consumers in India. The company’s brands have also been known for unparalleled quality, reliability and trust, using certified diamonds and hallmarked gold, and being sold with a guarantee and different types of buyback offers.
Today, collectively, Gitanjali has an over 50 per cent market share of the overall organised jewellery market. Gili is the undisputed market leader in its segment and Nakshatra is one of the most popular and largest selling brands in the diamond jewellery category.
Growth track
Gitanjali is one of the key companies spearheading the growth in the organised jewellery sector which now accounts for about 4-5 per cent of the overall Rs 1,50,000 crore market and is growing at 30-35 per cent, i.e., significantly faster than the overall jewellery market.
The potential of the sector is, in fact, huge. Jewellery accounts for 27 per cent of the expenditure of the luxury consumer, the highest for any individual item in the luxury lifestyle bracket. The consumption of diamonds and diamond jewellery has also spurted, registering a 20-30 per cent growth for each of the first seven years of the new millennium, till it was marginally pegged back in 2008.
During this period, India has emerged as the fourth largest diamond consuming market in the world - just behind USA, Japan and Middle East, and the diamond jewellery market has grown from an insignificant figure to approximately between Rs 10,000 crore and Rs 15,000 crore.
Looking forward, a KPMG report “Vision 2015” projects that India and China together will emerge as a diamond jewellery market equivalent to US market (currently over 50 per cent of the global market) by 2015.
Today, Gitanjali is focused on driving further growth. It already has an entire range of jewellery brands, both Indian and foreign, across product lines and price points to appeal to different customer segments.
Venturing into luxury lifestyle segment
As one of the largest and fastest growing diamond and jewellery businesses in the world, with operations spread across the entire value chain from sourcing and processing rough diamonds to manufacturing, branding and retailing gold and diamond jewellery, it has strengths that few others can match.
The current focus for aggressive expansion is the branding and retailing segment where existing initiatives cover plain gold and diamond studded jewellery brands for different occasions and varied consumer needs. There also are fashion brands, high end brands and brands at different intermediate price points.
Most recently, with the launch of its new multi-brand retail chain, Maya Fashion & Accessories, Gitanjali has further strengthened the integration of its jewellery business into the larger luxury lifestyle segment, as the new stores will be one stop locations for leading brands across categories like watches, perfumes, apparel, fashion accessories, etc.
Providing unique franchising opportunities
Each jewellery brand, and each new retail category, translates into a unique franchising opportunity.
Gitanjali not only has the best known brands, but it’s aggressive and high profile marketing activity helps in driving further footfalls to the stores. As a result Gitanjali gives one the highest rate of returns among all diamond and gold jewellery brands, which translates into a win-win situation for the franchisee. Investment in the gems and jewellery industry is also an extremely safe step - the high value of the stocks is an asset in the hands of the business partner.
Introducing revenue sharing
Gitanjali is also the first player in the jewellery industry to introduce the concept of revenue sharing partnerships with property developers. This is mutually beneficial for both sides - with Gitanjali greatly expanding its retail presence and the developer finding a flagship brand to attract customers to the mall thus boosting up the levels of walk-ins.
Investors willing to take advantage of the lucrative opportunities in this sector thus need to look no further than the Gitanjali Group.
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