Striking Gold

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striking

gold

CEO Sanjeev Agarwal has played a key role in turning Gitanjali Group into the world’s largest branded jewellery retailer-manufacturer. Now, he is busy weaving new fortunes as he leads the group into the apparel segment

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By Sapna Khanna

quick quiz. What do Gili, Nakshatra, Asmi, D’damas, Sangini and Diya have in common? Besides the fact that they are counted among the top 10 jewellery brands in India, they are owned and distributed by Gitanjali Group.

Boasting a wide range of jewellery brands – including the above –a large retail presence with over 4,000 points of sale and a turnover of around $2.5 billion, it is hardly surprising that the company is today the world’s largest branded jewellery retailer-manufacturer. Over the last five decades, Gitanjali Group has transformed from a Surat-based diamond manufacturing company into a modern multinational business with global operations.

While the group has a diversified portfolio, including watches, luxury gift items and, most recently, apparels, jewellery remains their core strength. After pioneering the introduction of branded jewellery with the launch of Gili in 1994, there was no looking back for the company.

Gitanjali went on to quickly develop a range of jewellery brands that addressed varied consumer segments and, over the last decade, it has expanded its overseas operations through a series of acquisitions.

Even though Sanjeev Agarwal joined Gitanjali Group in 2011, his relationship with the company dates back to over a decade.

As the then MD of the World Gold Council (WGC) India, Agarwal played a key role in shaping the ‘golden’ route for Gitanjali. It was thanks to Agarwal that the company, which was mainly into selling diamond jewellery, launched gold jewellery brands in partner60 | FDD | september 2013

“our deep understanding of consumer dynamics in different markets, our strong grasp of the principles of branding, and our willingness to be innovative and evolve help us to stay ahead in the race.”

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Photograph: Arkodeb Mukherjee

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ship with WGC and went on to work closely with the Council in a number of its market development initiatives.

So, when Agarwal took over as the CEO of Gitanjali Group, he already had a very good understanding of the dynamics of the organisation and that held him in good stead as he started rolling out new initiatives.

“Being at an important leadership position in such a large organisation brought a whole new set of challenges,” says Agarwal.

“However, the most critical among them was the need for Gitanjali to constantly evolve, transform and lead the industry into newer growth avenues.”

Over the last few years, Agarwal has successfully steered the company on this path. Key among his initiatives was planning the retail expansion into newer geographical areas in India, especially tier-II and tier-III cities, and ensuring that their product lived up the consumers’ ever-changing needs and aspirations.

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etail is detail and every element of the chain has an important role to play in order to deliver profitable results,” states Agarwal. “However, the two most critical elements in the retail business that are often neglected by the organised retailer players are the store location and the store level sales staff.”

According to Agarwal, a number of new entrants in the Indian retail sector have suffered because, in order to chase store number targets, they have not done sufficient homework on the store location. “With even a distance of a few meters making a difference to the success or failure of a new store, we have developed specific parameters for selecting our store locations resulting in our stores being profitable with a shorter gestation period,” he says.

The other important but often neglected link between the brand and customer is the store staff, Agarwal points out. While crores of rupees are spent on creating store branding and advertising and promotion, the store manager and the retail store staff are ‘the’ most important influences in the sales process. “On a number of occasions while walking in the malls, you would have noticed the sales staff busy entertaining themselves at the PC or making personal calls on mobile phone while the customer is browsing in the store,” he explains. “We have revamped our recruitment and training process to ensure that people with a certain ‘service-oriented mind-set’ can be identified during our recruitment process.”

Agarwal adds, “We have also developed a system of imparting continuous product knowledge along with awareness of the recent developments in the jewellery and the fashion retailing sector so that the store staff is sufficiently equipped to make a positive impact in his interaction with the customer.

Gitanjali has always been at the cutting edge of change, leading transformation in what was a very traditional industry till a few decades ago. “Yes, we do enjoy a certain first-mover advantage, but more than that it is our deep understanding of consumer dynamics in different markets, our strong grasp of the principles of branding, and our willingness to be innovative and evolve that helps us to continually stay ahead in the race,” shares Agarwal.

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Models at Gitanjal’s Bridal Extravaganza at IIJW 2013.

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he group does not see a clash of interest as it continuously rolls out one new brand after another as it believes there is enormous potential for the overall organised, branded segment to grow. “At present, the main competition faced by the jewellery industry is to maintain and grow its share of the consumer wallet,” quips Agarwal. He goes on to add that as long as the share of overall discretionary consumer spending on luxury items increases steadily there is good scope for all the players in the jewellery industry to grow.

Gitanjali has been active in trade associations and bodies like The Gem & Jewellery Export Promotion Council, FICCI’s Gem & Jewellery Committee and FICCI’s Luxury Forum with the view to help in the overall development of the trade. The group has also been building a platform for collective action by brands and jewellers, known as Leading Jewellers of the World.

Still, ensuring brand identity, individuality and USPs even as so many brands are churned out from the same set up seems like a daunting task.

However, Agarwal explains that, at Gitanjali, common manufacturing facilities and technology are only used to ensure uniformity in quality and standards. Beyond that, each brand has a clear identity and positioning, and the design, marketing and branding strategies all help to keep them separate.

Flowing from this, each brand has its own well defined and distinct design development and marketing teams. In most cases, the identity also finds a reflection in the design – for example

INNOVATIVE INITIATIVES The e-franchisee concept and introduction of jewellery ATMs are key to Gitanjali’s success

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n important thrust area for Gitanjali Group is to develop new innovative retail channels that suit the modern lifestyle and make full use of state-of-the-art technology. And Sanjeev Agarwal has made a significant contribution towards this end.

“We have enjoyed some spectacular success in the emerging field of e-commerce by launching a revolutionary concept of the e-franchisee,” he informs.

Gitanjali’s e-franchisee concept is revolutionary in many ways. From the point of view of the group, it gives them a wide network of franchisees that provide access to numerous small niche groups and literally take its brands to the doorsteps of their friends, relatives and associates using simple devices like a laptop and i-Pad. It also plays a role in social change, acting as a tool for the empowerment of the homemaker, and enabling her to develop some economic independence and self-worth.

“The introduction of the world’s first-ever jewellery ATMs is another milestone for the group,” points out Agarwal. Jewellery ATMs opened up new points of sale for jewellery at temples, malls and airports.

The ATM concept is ideal for those looking to make small, last-minute purchases on special occasions – like a token offering at a temple, a small gift or memento.

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The company’s brands include Gili, Naksha-

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MARRIED TO GOLD It was Agarwal who marketed Akshaya Tritiya as the day to not only tie the knot but also to buy gold

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n India, one of the key drivers for gold demand has always been ritual purchase on auspicious occasions. Dhanteras was already widely recognised as one such day. During Agarwal’s tenure as the managing director of World Gold Council, the prospect of boosting sales by identifying other such days which were auspicious for the purchase of gold became a major initiative. Akshaya Tritiya was one such occasion that was identified.

Eight years back, when Agarwal approached a number of leading jewellers across major cities to jointly work with WGC to promote Akshaya Tritiya, the feedback he got was that it was an auspicious day to get married, so people may not have any time to consider buying gold.

Agarwal decided to put the concept to experiment. They got the popular TV star of the time, Smriti Irani, to go on television and announce that Akshaya Tritiya, like Dhanteras, is also an auspicious day to buy gold. “Many of the jewellers, who opened their stores by late morning were pleasantly surprised to see a few customers waiting for the store to open – thanks largely to the Akshaya Tritiya advertising that WGC had done. I realised how simple communication with a credible linkage can create an impact,” Agarwal says.

Less than a decade ago, most consumers across India had hardly heard of Akshaya Tritiya, and now even gold mutual funds and banks have joined the bandwagon to entice customers to invest in their gold product.

Nakshatra, which is presented as an iconic, celestial brand, uses a modernised version of the traditional seven stone-floral cluster based on the Saptrishsi Mandalam constellation, while Asmi has a unique curvilinear designs for the self-made woman. On the other hand, Sangini is based on twists and turns that are part of every close relationship.

Apart from different brands of diamonds based on the product positioning, they also have brands based on the material used, such as Nizam – traditional uncut or rose cut diamonds; Envi – emerald studded jewellery; and Karina – jewellery studded with rubies and platinum jewellery sold under the True Platinum brand. Each brand’s distinctive style and position is maintained at the store level also.

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Shreya Saran, designer Archana Kochchar and Ankita Shorey at Shuddhi Jewels show by Gitanjali Group at India International Jewellery Week.

“There is no major clash between the in-house brands and those that we distribute in India through tie-ups – each has a distinct positioning and a specific target group,” says Agarwal. “Moreover, most of the international brands that we market in India are in the watches segment, while the Italian jewellery brands are a clearly differentiated product segment from the Indian jewellery brands.”

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n the manufacturing side, the group uses all the latest technology and systems and have a highly developed R&D team which has conjured up a number of tech innovations – like the use of special polymers in jewellery, unique settings for diamonds or the creation of innovative pieces such as a diamond-studded cricket ball.

Gitanjali’s recent venture into apparel also has two dimensions.

There is the Maya Lifestyle by Gitanjali stores, which are multibrand, multi-product lifestyle stores that integrate jewellery retail into the broader lifestyle retail categories. And there are the brand extensions such as Gili Apparels where the same brand values and identity are now used for other related product categories as well.

“These are at early stages, and while there are big plans for these categories, they will be unveiled step by step in a systematic fashion once the early gestation period is over,” shares Agarwal.

Even though Agarwal is not willing to spell out the details about the company’s future plans, he doesn’t hide the fact that Gitanjali Group is gearing up to expand both within India and internationally and make its mark as one of the largest global luxury brands.

While the group will continue to strengthen its leadership position in the jewellery and luxury products sector in India, it is also focusing on increasing its presence in major jewellery markets like the Japan, Middle East and China.

Even though gold prices had dropped at the beginning of the year, the first half of the annum recorded 50 per cent more sales revenue than last year. And with the prices zooming up now, gold is as precious as ever. Strengthening the integration of jewellery with the wider fashion and lifestyle worlds, the group is fast expanding into related lifestyle categories like watches and apparels. And Agarwal, for his part, is busy designing the road to consolidate Gitanjali Group’s position in India and around the world.