Gitanjali Gems does an image check
The jewellery manufacturer has consolidated its leading brands under Nakshatra World as it seeks to drive convenience and brand loyalty
Eight years after Gitanjali Jewels conducted its first ever brand evaluation exercise, the company is reconfiguring its labels and organising them under a single identity, hoping to draw more value from its portfolio while rationalising retail costs. The brand restructuring underway is also expected to help build a seamless experience between online and offline points of access. However, the challenge will be to maintain the differentiation between Gitanjali’s brands that were valued at ~2,709 crore by Brand Finance in 2009.
Differentiation is key for young buyers, who go by the experience and uniqueness of the product or service they are buying into. Hence for Gitanjali, the trick will be to keep its leading labels distinct even while dabbing them with the same brush.
“All our brands are different from one another,” said Mehul Choksi, chairman and managing director, Gitanjali Gems. He believes that the one store, many brands strategy is likely to create greater visibility for all the products (Nakshatra, Asmi, Gili among others). “The consolidation of the branded jewellery business would help us offer customers all types of jewellery under one roof. This will save them the effort of visiting multiple stores. Also, this will reduce our cost of store management and improve per-store sales efficiency,” said Choksi.
The branded jewellery market in India is still a small percentage of the total but it has been growing. Eight years ago, the contribution of branded jewellery was around one to two per cent. It has now shot up to 20 per cent. Gitanjali Gems claims it has market leadership in branded jewellery.
This market has grown as jewellers have launched high-decibel campaigns and invested in online marketing channels as well as worked on creating a more seamless purchase experience. In branded jewellery, there is stiff competition between Tanishq and CaratLane from Titan, Bluestone (backed by Ratan Tata), Gitanjali’s labels and a host of other players. Even traditional jewelers such PC Jewellers, Kalyan Jewellers (although they cater primarily to the gold jewellery market and are not direct competitors) have, in recent months, expended time and advertising budgets towards brandbuilding initiatives.
The goal across the board is gaining customer confidence, as that fuels loyalty and helps expand the market without having to set up physical stores in new markets. The jewellery buyer is hesitant to increase the ticket price of her purchases online unless the brand is trusted.
For Gitanjali building trust is a big factor driving brand consolidation. By getting its brands valued by an external agency, the company had said that it sought to unlock the value of all its products and boost consumer confidence. The present decision to combine its leading brands into Nakshatra World (NWL) is a step in that direction. NWL houses brands like Nakshatra, Gili, Asmi, Sangini, Parineeta, Diya and many others.
Put together the abovementioned brands have been growing at a 30 per cent CAGR in the last three years. NWL has been created to cater to the young consumer who is looking for a trusted jewellery product with an international retail experience, third-party certification, buyback policy and world-class design and finish.
To keep its brand identities apart, the company says it has a unique brand architecture. It targets consumers by different price points, end usage, demographics and buying behaviour. For example, brand Nakshatra is targeted at the high-end customer with a focus on evening wear. Gili is focused on modern-retail buyers and for gifting as an occasion for the collegegoer. Asmi is mainly for office wear and Sangini and Parineeta are targeted at engagements and weddings.
Present across almost 3,000 points of sale (PoS) in nearly 300 towns and cities, brand Nakshatra in particular has opted for an omni-channel sales strategy through distributors, shop-in-shops, franchisee, own stores and online. There are about 500,000 mom and pop jewellery shops in India of which about 100,000 can carry branded and studded jewellery. Through its associate marketplace jewelsouk.com and its own portal nakshatraworld, the company is also looking to strengthen its brand presence online. For the online buyer, the company focuses big on design, it has a bank of over 250,000 styles that allows for multiple opportunities for customisation.
In the coming months, the company says it will extend brand Nakshatra to high-end diamond-studded watches and accessories with complete manufacturing and quality control and high-end ethnic wear. It has already started trials in ethnic wear, the entry price point being ~2,500. The company plans to raise funds through an IPO later this year.