Looking Forward to the Future-India’s Retail Jewellers put up a Brave Face!

Here’s an eye-opening conversation with some of the jewellers from the main cities in India, where they talk of their future plans, their preparations and expectations from the festive and wedding season, and how they are gradually building the customer’s confidence in domestic products.

The jewellery industry in India, estimated at a whopping Rs. 80, 000 crores, is going through a period of rapid changes....events are taking place that are going to determine the direction that this industry will take in the immediate and the far off future. First came the boom...the jewellery retail trade saw stupendous growth and profits were so high that they seemed too good to be true! The slump happened soon thereafter and dreams of soaring high in the domestic and international markets crashed for several retailers. Then there were assurances from the GJF Chairman that the industry would grow to nearly Rs. 120,000 crores by 2012. This seemingly ambitious statement has rekindled hope in the markets across the country, especially for the family-run businesses in the cities like Ahmedabad, Nagpur, Pune, Ranchi, Indore, Coimbatore and Chandigarh. The IIJS-2009 furthered the cause of the fight against recession, with optimism prevalent throughout its 5 days. The wedding and festive season is as usual weighed with expectations of increased sales. There is a flurry of activity taking place as retailers are pulling up their socks to deal with all that is happening. These jewellers are part of a brave new generation, fighting the recession, and competition from the industry biggies...a generation that has dreams waiting to be fulfilled... and the most ordinary expectations of support and assistance from the government and the national bodies which represent them...

It is heartening to note that most retailers that we spoke to have a very positive approach to the lingering recession. Surprisingly, some retailers even reacted with “Recession? What recession!” Kishore Sheth, Partner at Batukbhai Jewellers, Nagpur, categorically states, “There is no recession in jewellery – simply because weddings and festivals are always taking place and people obviously buy jewellery during that time.” Ashok Vastani, Partner at Dass Jewellers, Nagpur holds a slightly different opinion. “Transparency in business, gaining the confidence of the customer and guiding the client towards investing in gold is the way out of the recession”, he says. K Srinivasan, Managing Director at Emerald Jewels, Coimbatore, corroborates this view, “Exclusive designs, excellent service and highly competitive pricing will certainly help the industry to come out of this so-called recession” Sadhna Puri, Proprietress at Sadhna Puri Jewels, Ahemdabad though is emphatic about the fact that there is no recession. “What recession? India is shining...ups and downs may be there, but for a very short time only. The situation is going to get brighter very soon.” Prem Prakash Arya, Proprietor at Jevar Jewellers, Ranchi says, “The recession and decrease in sales is because of the high and fluctuating price of gold. Once that stabilizes and decreases, sales are bound to increase. However, even in the so-called recession, people still buy jewellery when necessary...during festivals and weddings.” Offering a slightly different view- point and even several ways to deal with recession is Vastupal Ranka, Partner at Ranka Jewellers, Pune. “The whole world is facing the heat of the recession and very few industries are exempt. In the jewellery industry, there is a multiplicity of factors which have caused the reduction in sales - volatility of prices, sudden crash of stocks and reality markets, decrease in the buying power of the upper class people. But less buyers in recession, means more time and energy available to management and employees to plan, strategize and prioritize. Some activities which can be carried out include preparing and updating client database, cutting down on unnecessary costs, stock taking and inventory management, tagging or bar coding each item in stock, reviewing the internal accounting procedures and financial strategy.” Anil Talwar, Partner at Talwarsons Jewellers, Chandigarh, has a valid point – “Recession is more in the mind. If we understand the customer psyche and the store customers, we can stock up accordingly and always be able to sell jewellery. We have not seen even a dip in sales; forget about the slump that most people are talking about. Maintaining proper stock is essential otherwise losses are bound to happen.” Wise words indeed!

The impeding festive and wedding season appears to be the panacea for the recessionary ills plaguing the industry and jewellers are waiting with bated breath. Preparations are on in full swing as no jeweller wants to miss a very lucrative opportunity to increase sales. Speaking of the preparations for the upcoming season, Sheth says, “Our preparation is mostly in terms of getting new, innovative designs. We have collections with both lightweight and heavy jewellery. There is a unique combination of kundan with diamond jewellery and we have stylish and elegant drop gems jewellery which covers the whole neck like a scarf. “We have a very different collection of polki with enamel work coming up. Customers will love it!” says Vastani. Talwar talks about detailed stock taking and introducing new collections in gold and diamond. “We are stocking up traditional items in the heavy range and also lightweight items – these are going to be in demand during the festive season”, explains Arya. Puri’s plans go beyond the regular stock taking – “We are planning to showcase our exclusive designer and bridal collections at various shows and exhibitions in major Indian cities as well as abroad.” Srinivasan has other plans too, “Besides launching a fusion jewellery collection, we are also in the process of releasing a nationwide advertising campaign to reach all corners of the country!”

Jewellers remain unfazed by competition...from corporate bigwigs and smaller retailers. There is a logical explanation for this – though several corporates have entered the jewellery segment, still the family jeweller tradition continues. Moreover, the retailers are very market-savvy, they believe in building a relationship based on trust with the clients and know that it is important to offer the best possible service, products and quality to the regular customer. With an increase in accountability and transparency, customer confidence in retail jewellers is increasing. Explaining this point, Sheth says, “Well, in India the family jeweller system is still thriving. We offer personalized service, which bigger corporate jewellers cannot give. More often than not, the clientele is fixed since generations and the owner deals directly with the clients. Obviously, that works to our advantage and takes care of the competition.” Talwar agrees, “In India the hold of the family held jewellery stores is strong and the image of “family jeweller” is embedded in the customer mindset.” Vastani has a different opinion on dealing with competition. “It is important not to bad-mouth the competition. Offer full support and guidance and a good variety of jewellery and the customer will automatically be convinced that he is buying jewellery from the best place possible. Also, keeping carat meters and buying back jewellery at the same price goes a long way towards ensuring that customers continue coming back to the store.” Puri tends to agree, “Keeping total transparency as far as your products are concerned, constantly coming up with innovative and better designs and working diligently towards giving quality services and maintaining excellent relations with your customers. Brand building is the key to dealing with competition.” Ranka says, “We believe in doing things differently. It is important to identify the right segment of customers whom the store wants to cater to. Having done that, our store’s decor, ambience, variety of designs, labour, pricing, advertising and promotions, staff training - everything is focussed with the specific clientele in mind. In the industry, one cannot be everything to everyone. All these efforts have helped us achieve an edge over the competition." Apparently not all jewellers have to think about competition. Says Arya “We are the oldest and biggest jewellers in Ranchi. So, within the city, we are trusted by our clients since so many years...our business is based on the trust our clients have in us and we are doing well because of that trust.”

Selling today is increasingly technology-driven. Rare is the business which can function without a website. Retailers however are divided on whether jewellery can be sold online. While look and feel is important, several retailers believe that “being online” is a very cost-effective mode of advertisement, even if there are no sales involved. Of course, several stores do have comprehensive websites which they believe allow them to get closer to the customer. “I don’t think an internet presence is necessary...for jewellery, the look and feel is of prime importance. People cannot buy jewellery simply because it looks good in the photograph...we don’t have a website and have no plans in the future to build one either” says Sheth. Agrees Vastani - “I personally feel jewellery cannot be bought online.” While internet presence does not matter for these jewellers, Puri believes it is very important if one has plans of global expansion. She says, “Online presence is very important to us, as we are eyeing a global presence and the best way to achieve that in these times is with the help of the internet.” With a varied opinion on the merits of an internet presence, Ranka gives a very logical explanation, “Online presence in today's times is a must. Even if products are not to be sold online, a website is still needed to increase visibility and enhance credibility. A website provides a relatively inexpensive method of advertising - brochures and mailers are expensive to print and distribute, but the website can be viewed 24 X 7, and information can be updated easily and quickly. It provides an opportunity to reach clients and prospects beyond the city where we are physically located.” For Arya too, online presence is important. “It may not be important within the city itself where we have advertising through hoardings, but for visibility in other parts of the country, an online presence is important.” Talwar is in agreement, “We have a comprehensive website giving all possible information to the customers even though online sales will take some time in coming to India with full force.” Srinivasan enumerates the advantages of technology, “Having an online presence quickens order execution, eliminates unnecessary paper work, enhances communication and greatly helps in minimizing the transaction cost.”

There are several expectations from the government, GJF and GJEPC, which jewellers believe would help growth. “We jewellers in Nagpur have to pay 1% extra Octroi when we bring in finished jewellery from any part of the country. This increases the cost of jewellery for us, making our products a little less competitively priced. Removal of this Octroi would help us price our jewellery better. Also, having a single, uniform rate of gold across the country would be a big step in assuring the prices for jewellery and help in increasing customer confidence, thus helping our growth. VAT ensures compulsory billing and clean accounts, which is a good step already taken.” explains Sheth. “An increase in the number of Hallmarking centres would go a long way to ensure customer satisfaction in our products” opines Vastani. Puri agrees with this, “Hallmarking and branding are important as is having more labs with better equipments for testing. It is also important that the government and associations should increase customer awareness about quality.” Events like the Lucky Lakshmi are very helpful for us. More events of this kind will definitely help industry growth” says Arya, appreciating the GJF and GJEPC efforts to fuel growth. Talwar has an interesting point – “On behalf of the entire industry, the GJF and GJEPC have already taken up issues like compulsory Hallmarking and excise with the government. Industrial growth will follow once such issues are handled.” Dass Jewellers had a very successful run with Lucky Lakshmi and as Vastani points out, “Such festivals are very good for sales...we are awaiting details of the India Diamond Promotion also.” Srinivasan is full of hope too, “We expect the new Foreign Trade Policy to offer some relief to the Gems and Jewellery sector. The GJF and GJEPC are of course a very effective interface between the government and jewellers.” In fact, speaking with retailers shows up the GJF and GJEPC in very good light. Jewellers are very appreciative of the work that these two associations are doing.

Innovations Galore...

Big or small, all jewellers have to innovate for increasing sales. There is simply no escaping that fact. There is a wide variety of ideas, some of which are still in the planning stage while others which have already borne fruit. Here’s looking at some of them.

For Puri, innovation in this business is all about reaching to customers. For this, she says, “We have decided to reach out to the people and feel the pulse of the market. This involves extensive travelling to have our presence felt physically through exhibitions and shows in all the major cities of India and our online presence through the internet.” Vastani also believes in a similar strategy – “Keeping in touch with the customer through sms and phone calls, informing them about new collections and making her feel special.” Arya explains, “We have an exhibition every year where we keep a low profit margin so that the customer is benefited. In fact, this initiative was so successful that people now wait eagerly for our exhibition. Even with a low margin, our sales increase a lot.” Ranka has more plans – “We are planning to add a men’s collection and also promote our lightweight jewellery collection.” Sheth’s plans have a wide range, “We plan to offer attractive discounts and a new innovative display is planned. A big jewellery mall is in the offing which will be ready before Diwali” he explains. Talwar’s plans are relatively simple with proposals to increase advertising across the country, while Srinivasan speaks of a new strategy to introduce designs with a fusion element by harnessing the power of technology.