The company that houses skillfully crafted exquisite gold and diamond jewellery continues to live its legacy of crafting timeless pieces with élan!
Cut, Carat and Clarity, emphasising on these three C’s, the journey that Laxmi Diamond started in 1972 as a small manufacturing unit has in a short time marked its footprints in the jewellery market to become a benchmark for others. Carving a niche not just in domestic market but also in international market with it’s premium brands Cygnus and Noor it continues to live upto its name with constant innovations. Avinder Batra talks to Mitesh Gajera, MD of Laxmi Diamond about the company, their goals, visions and in short, their success mantra…
Avinder Batra (AB): Tell us a little bit about the group – Laxmi Diamond?
Mithesh Gajera (MG): Laxmi diamond was founded in year 1972 and was appointed sight holder by DTC in the year 1995. What began as a small manufacturing unit in 1972 has grown into a global empire within the span of three short decades. Poised on the threshold of becoming a global leader, Laxmi Diamond has had a paradigm shift from a largely manufacturing, to a much more marketing-oriented perspective and given it an international and global mindset. The key factor behind this success story is the rich vision of the group, which is more than ably supported by an excellent worldwide distribution network, spearheaded by our dynamic teams who are in key positions across the globe.
AB: Have you witnessed any drastic change in the jewellery industry in these thirty years?
MG: Yes, the jewellery industry of course has changed drastically. The jewellery market is now growing at the rate of 38 per cent and expected to touch US $ 2.2 billion by the year 2010. When it comes to gold, India has become the largest consumer of gold jewellery in the world, accounting to about 20 per cent of global gold consumption. The net imports of gold bars in 2009-10 was estimated at US$ 6.91 billion, India is also the world's largest diamond cutting and polishing centre in the world with 11 out of 12 diamonds sold in the global market being processed in the country. The exports have also risen to US$ 28.4 billion in FY10 from US$ 24.5 billion in FY09; registering a 16 per cent growth in the total gem and jewellery exports, as per a release by the Gem and Jewellery Export Promotion Council. More disposable income, malls, franchise outlets, boom in the retail industry and wider accessibility rather than traditional family jewellery has been one of the highlights of the change that has appeared in the last 30 years.
AB: What channels have you adopted to reach your target group?
MG: BTL has been one of the most prominent and effective tool of marketing that has been adapted by us. Print Media is one the tools that we have been using since the inception of our brand and has worked well for us. Outdoor has been a constantly growing medium of communication and because of the growing popularity and faster penetration it has been adapted by us. We have also adapted the mediums of radio & television.
AB: Are you in franchising? If yes, could you please tell us about the franchise model (including investment, area required, location preferred and franchise support progamme)?
MG: Yes, we are in franchising as well.
• Investment per sq.ft: 1 crore per 1000 sq ft.
• ROI: 22 per cent Average
• Employee cost per sq.ft: 50 – 60 per 1000 sq ft.
• Working Capital: 1 crore includes 50 per cent merchandising
• Break even period: 1 ½ year
• Profit margin per unit: 15 per cent
AB: A lot of jewellers are increasing their footprint through retail outlets. Do you have any similar plans for yourself?
MG: Cygnus has started their journey in retail by venturing themselves into the shop in shop concept where we not only enjoy extensive networking but also share brand equity with the malls we are placed in and we have also made a mark for ourselves in the oulets we are in. Cygnus & Noor both are available in the shop.
AB: With so many players around, how do you plan to counter the intense competition in the jewellery market?
MG: Since the birth of our parent company Laxmi Diamond Jewels, we have always believed in the quality of products offered by us and management we hire and the same has been implemented in CYGNUS. We have our staff trained to the best of their abilities and we believe in constantly understanding the changing needs of our customers by doing market research from time to time. Innovation & Customisation are a quality that are most important to us and reflects in our various designs. Capturing the market has never been our aim but understanding and growing with changing needs of our customers has been our priority.
AB: How was the year 2009-10 for domestic jewellery markets?
MG: The recession of the year 2008 did have an effect on 2009 although the year wasn’t that bad but we have learnt from our mistakes. Markets have picked up and slowly gained momentum. The exports have risen by 16 per cent. Export of gold jewellery in April 2010 has represented a growth of 20.46 per cent. The export of coloured gemstones has grown to 9.2 per cent in April 2010 .The polished diamond exports stood at US$ 1.7 billion whereas the cut and polished diamond exports together posted a growth of 89.02 per cent in January 2010.
AB: Did the 2008-09 recession spell ‘alarm’ for the jewellery industry
MG: Yes, it did help us to sit back and take notice of our various costs and where was it we could have gone wrong in calculations and how was it that we could re work on certain costs and yet be able to provide the best service to our customers.
AB: Jewellery businesses generally witnesses demand surge during festival time or marriage season. During the rest of the lean period, how do you market your products?
MG: During the festive season we have many special offers and discounts lined up for our customers and during the rest of the period there is a discount of 10 per cent to 15 per cent.
AB: How important is India International Jewellery Show 2010 (IIJS) for you? How are you planning to take advantage of this platform?
MG: The Gems and Jewellery Export Promotion Council has initiated IIJS to promote India as the preferred source for jewellery and eventually build brand ‘India'. It was conceptualised to showcase India's ability to produce quality jewellery that will match the lifestyle trends world over. GJEPC which hosts IIJS which is considered to be the largest jewellery show in Asia to highlight India's capabilities to manufacture jewellery in terms of design, craftsmanship and quality at par with international centres and also to foster relations with other markets around the world. It means a lot to us, it is a very big platform for the CYGNUS family to showcase its talent.