By Neelima Agrawal
New Delhi / Bengaluru
For eons, India’s family owned jewellery houses have carried forward the legacy of their old heritage generation after generation, following the same tested and tried ways. It worked. Their flourishing businesses thrived and expanded with each additional branch of the family, century after century. But in the past few decades, the scenario has become blurred with the winds of change. As if on cue, a new unlikely player entered the field. The House of Tata’s launched their jewellery division Tanishq under Titan in 1994, introducing branded jewellery. Neelima Agrawal spoke with Ajoy Chawla, CEO Jewellery Division, Titan Co. Ltd. to understand their journey and vision for their subsequent jewellery segments Mia, Carat Lane and Zoya.
In the year 2019, the demand for gold in India reached 690.4 tonnes, a clear indicator of the size and scope of the jewellery business in India. The Indian consumer per se, across all sects, casts, creed, has a set requirement for jewellery for various traditional landmarks in the life of a child, from birth till wedding, and after, the quantity varying only with the purchasing power. The largely disorganised jewellery sector, successfully run by family owned businesses, nurtured the steady demand by building loyalty and trust of their clientele, who heavilty relied on their word for the purity of gold and authenticity of their wares. Until the privy purse, the assorted royals with free access to their treasury, indulged in this passion of accumulating jewelery. Such was their wealth of precious gems and jewellery that European brands like Cartier and Van Cleef & Arpels yet continue to build their branding on the memory of that association with the rich Maharajas. But all this was not to be for long.
The stirrings of change finally set in around the early 90s. Globalisation, opening of markets, the internet bringing enhanced exposure to global trends, the increased awareness of quality and accountability – there was a new more demanding Indian consumer. The pandemic has further changed many things, bringing more pressure on the local players. The Government of India has taken note of the many woes of the industry and reduced the GST to 3%, lowered the import duty on gold and relaxed restrictions on import. It has also made the hallmarking of all jewellery mandatory, to be fully implemented by June 2021. Online sales are expected to account for 1–2% of the fine jewellery segment by 2021–22. The projections for the Gems and Jewellery industry in India are at an all time high.
Titan’s Tanishq jewellery was a first of its kind corporate brand in this space in India. With the goodwill of the Tata brand behind it, they created a buzz with their hallmarked jewellery and open prices. Subsequently they added more segments, Mia by Tanishq for the working woman and partnered with Carat Lane for e-commerce. In 2010 their premium brand Zoya for diamond jewellery opened shop. With the backing of a large corporation like the House of Tata, and a foot in each segment, Tanishq Jewellery is poised to benefit the most from the current situation and the evolving market place. They have the vision, access to technology and the pockets to invest in matching pace with the world. In the 3rd quarter of the FY 2020-21, we connected remotely with Ajoy Chawla, CEO Titan Jewellery Division, and asked many questions about their marketing strategies, their vision, and the road forward, particularly about Zoya, which opened a new store in Bengaluru in May 2020. We bring you the excerpts from the interview.
Please tell us about yourself vis a vis the jewellery division of Tata.
I moved into this role about a year ago. My predecessor, Mr. C.K. Venkatraman who you have met, is now Managing Director of Titan Company Limited. He was the CEO of the jewellery division for the past 15 years. I was in other parts of the organisation. My first time in jewellery, I am now the CEO of the jewellery division and oversee all aspects of this business for all our brands, from Zoya, which is our luxury offering to Tanishq, Mia and Carat Lane. I am on the board of Carat Lane as well, which is a separate entity. It is a subsidiary and this includes front end – back end, all of it. The PNL is its responsibility.
The Tata group entered the branded jewellery segment with Tanishq in 1994. It was quite path breaking at that time. Did it attain the desired success quickly?
Not exactly. The break-even for Tanishq took 7 years if I am not mistaken. As I recollect, in the first two years the strategy itself did not play out well and had to be reworked. We started with studded and 18- carat. We didn’t have plain gold products and so were perceived more as a product brand, not a fully skilled jeweller. We were not taken very seriously. So it took us sometime to correct all this and it was only after seven years that Tanishq had its break-even.
Zoya was launched 10 years ago. How has it performed?
The progress of Zoya has been slow and steady. I think there is a fundamental difference between Tanishq and Zoya. Zoya is neither attempting to be a wide appeal player to a large number of customer segments, nor is Zoya attempting to be a mainstream jeweller, unlike Tanishq. Zoya is in the luxury space and if you look at the history of luxury brands across the world, we have to be very patient. It is not about gain at a certain speed. Profits will come over time. Most importantly it is about creating the right kind of aspiration amongst most relevant customer segments, so that overtime the brand gets built – not so much by advertising and rapid expansion of network etc, but rather through a slow and steady process of word of mouth aspiration.
What makes Zoya’s jewellery so special?
Every collection and piece at Zoya has a story, and takes between nine months to a year to be created. From the stones used, to the craftsmanship of each piece, everything is very fine. Also, we recognised that we were newcomers to luxury as an organisation and don’t want to put the pressure of commercial success on to Zoya in the early stages, lest the brand’s core values and the things that matter get sidelined. The board has also been very supportive. They tell us that we should create truly Indian luxury brands, that are homegrown, even if you need to have a 10- 20 year horizon for that. So Zoya has not broken even. But it’s not that we have not lost too much money in it either. We opened our fourth store recently in Bengaluru in the month of May and have seen a 80% recovery over last year, in the last two months after the lockdown lifted. We were previously present only in Mumbai and Delhi, in order to establish a name for ourselves first, before expanding.
Why did you launch a jewellery boutique in the month of May in the thick of the pandemic?
Zoya has been well received in Mumbai and Delhi. So the plan was put if place in end of 2019 for stores in Bangalore and Hyderabad. We found the right space on Vittal Mallya Road in Bengaluru, and it took us about six months to renovate the boutique to meet Zoya’s standards. The schedule was to launch in March 2020, but unfortunately Covid-19 pandemic caused the lockdown. Finally we could open in third week of May.
How did you manage that?
Technically we haven’t been able to launch it in the manner we would have liked to, where we could invite a lot of people to the store and showcase the brand, because it is our foray into South India. However, we have been doing trunk shows and there are fans of ZOYA in Bengaluru. It was a virtual launch. Later we invited some of our special customers in small groups or individually. We are seeing a very good and encouraging response.
You do have the big advantage of the goodwill of TATA brand.
Yes, coming from the house of TATA with a 150 year old reputation, there is a lot of trust and a deep sense of respect. It has a deeply Indian soul and outlook. And secondly, the TATA group with its Taj group of hotels, has created its own form of luxury, which is very Indian. So in that sense there is the history of homegrown, iconic luxury in the company.
Any plans for Tier 2 or 3 Cities for Zoya?
In fact you will be surprised, during this time when we have been shut, there are many customers who have reached out to us directly from smaller towns, from Indore, Alwar, Jabalpur, Jaipur. They have not really seen Zoya, which is there only in Mumbai and Delhi. Tremendous aspiration has got built. Now we are thinking of rolling out Zoya to a few more cities and with trunk shows or even put up some boutiques in these markets. Bengaluru is the first step, possibly Hyderabad would be the next, and we will explore cities like Ahmedabad or Kolkata, where we see there is a lot of interest in Zoya naturally.
How are you facilitating purchase in these times?
We have seen about 85 – 90% recovery in the last couple of months for Zoya. Our insight from this is that our target audience has not really been impacted as much financially, and is very concious of health safety. As more customers have preferred remote shopping, we are connecting with them online, setting up appointments and doing a virtual walk through of the store and the collections. A dedicated jewellery advisor for each customer guides over the phone. Several of our customers shortlist some products and prefer if we could take it to their home. The same jewellery adviser remains their personal connect, fixes an appointment and makes it happen. Even during the pandemic, for one of the customers in Bengaluru, for his spouse’s birthday, a special lunch was organised with the help of the Taj, along with the jewellery that was selected. It was a beautiful family experience. Also let’s say, if you are browsing through Zoya on video call, in order to give you that experience of Zoya’s hospitality, we will arrange a special steaming cup of coffee to be delivered to your home during that appointed time. So how can we make it warm, personalized and special even remotely, is something that we are asking all the time.