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Sujata Agrawal
Tanishq has had to negotiate
many bumps and curves to reach the highway to success. The
story began when Titan entered the jewellery business in 1995,
primarily as a manufacturer, with retailing as a distribution
channel. But the company soon realised that selling jewellery
was actually a more retail-intensive business, and that the
real value addition and competitive challenge was to establish
itself at the front end.
In early 2000, Titan organised
itself into two small business units: watches and clocks,
and jewellery. According to Jacob Kurian, the chief operating
officer of Tanishq, this helped the company redefine its business
purpose and focus. "We are retailers," he says.
"We design, manufacture, market and build a brand, but
the primary focus is to define ourselves as retailers and
create a unique proposition that consumers can relate to."
The challenges have been
many. The jewellery industry in India has 3.5 lakh players
and is estimated to be worth about Rs 40,000 crore. The share
of the organised sector in this is just Rs 1,000 crore (about
2.5 per cent). Tanishq has managed to carve a niche for itself
within this segment by becoming India’s first branded jewellery
manufacturer and retailer, and by bringing professionalism
to the market. Tanishq’s arrival has helped change customer
attitudes, while altering the traditional way jewellers did
business.
"The sector was highly
fragmented," says Mr Kurian. "There were unethical
practices and — surprisingly, for such high-value products
— no branding. Branding provides reassurance and builds a
relationship. There was no attempt to differentiate on any
other factor but price. Our research showed that woman perceived
jewellery as their only personal possession. India being the
world’s second largest gold jewellery market after the United
States, we were confident we could succeed by being honest
and transparent."
Tanishq worked hard on
a two-pronged brand-building strategy: cultivate trust by
educating customers on the unethical practices in the business,
and use innovative methods to change the perception of jewellery
as a high-priced purchase. Mr Kurian says the big challenge
was to get consumers to visit the stores. "We are changing
the attitudes of customers from blind trust to informed trust."
It has helped that Tanishq’s
primary customer, the urban Indian woman, has come a long
way. She is smart, educated, confident of handling career
and family, and looking to secure value for her money. Today’s
urban women no longer wear jewellery only at weddings and
formal occasions, and they require accessories that match
their attire. Also, they demand more choice and a wider range
in terms of prices.
Tanishq has leveraged
the design skills that are part of the Titan heritage to refine
its products, and it has invested a lot in research and customer-focused
studies on what the Indian woman is looking for and how she
is evolving. "We understand that our customer is a woman
who is young at heart and in mind," adds Mr Kurian,"
and she’s looking for a different buying experience."
The change in the way
jewellery is perceived in India is reflected in the move away
from traditional heavy designs to finely crafted, aesthetic
pieces that use different metals and stones in a variety of
colours. Tanishq’s latest collections, Aria, Hoopla and Diva,
are the result of the organisation’s in-house team of award-winning
designers blending Indian and international trends to bring
outstanding products to the store shelves. FQ, the latest
launch from Tanishq, is a fashion accessory line that incorporates
the same design values.
Tanishq today has 48 exclusive
showrooms — five owned by the company and the rest franchisees
— spread across 37 cities in India. The locations are chosen
on the basis of geographical spread and the shopping dynamics
of a particular metro. The primary promotional medium for
Tanishq is its boutiques, which explains the emphasis on store
design and layout. "Our stores demonstrate design leadership
and differentiation. Our challenge is to provide excitement
around the collections in our outlets."
The flagship store, on
Dickenson Road in Bangalore, is as spacious as they come.
For the launch of Diva, Tanishq’s pearl and diamond collection,
the store had two huge cutouts of models displaying the designs.
Inside the store, jewellery is artistically displayed in floor-
and wall-mounted showcases, and highlighted through lighting.
The entire ambience is one of opulence.
What about the competition?
According to Mr Kurian, the branded players (Gili, Carbon,
Oyzterbay, Sparkle) taken together are but a quarter of Tanishq’s
size. Then there are the traditional jewellers such as TBZ
and Popley. The rivalry for space in the jewellery market
does not faze Mr Kurian. "Last year a million people
went through our stores. We have showrooms in cities from
Srinagar to Tirunelveli, and we are successful in small towns
too."
Mr Kurian is gratified
by the international interest received by Tanishq. The Singapore
Tourism Department has invited it to set up a store in the
city-state, and there have been inquiries from the United
States and Britain. And he is upbeat about Tanishq's future
performance after the company posted a profit for the first
time last year (sales of Rs 203 crore).
In terms of growth figures,
last year India’s jewellery industry grew by 2 per cent and
Tanishq by 35 per cent. This year the estimated industry growth
is 4 to 5 per cent and Tanishq is currently growing at 45
per cent. "The growth differential over the last couple
of years means that we are now a mainstream proposition."
Tanishq is among the top
five retailers in the country. The success of the jewellery
sector in retailing is almost entirely due to Tanishq’s achievements.
"This really is an exclamation mark in a long journey
in establishing ourselves as a retailer." Mr Kurian is
proud to have done this without compromising on the Tata Group’s
traditional values, and he believes that someday all jewellery
will be sold in this manner.
Mr Kurian is now working
on ‘Mission 400’, which is to garner a 1 per cent share of
the total market. To this end, Tanishq will be targeting the
investment-minded, price-sensitive customer base.
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