In uncertain times like these, gold is seen as a safe haven: Ramesh Kalyanaraman tells BrandSutra

What kind of consumer behaviour do you see in the post-lockdown return to normalcy?

One of the biggest trends that has emerged since last year is a strong shift in consumer preference from the unorganized sector to organized jewellery brands. Consumers are now preferring to shop at large format showrooms rather than at showrooms or shops in crowded spaces due to hygiene-related issues, and also because they provide more value for money, authentic pieces and service quality. As a result of this, we have seen a 50% jump in first-time customers visiting our showrooms as compared to the pre-COVID-19 era. Gold is a liquid asset and has always been considered as a lucrative investment option for consumers and investors. It is interesting to note that even youngsters are now looking at gold as a commodity to invest in from a long-term perspective. Currently, with the upcoming wedding season and fall in gold prices, the key driver for us has been a surge in consumer demand, especially for traditional gold jewellery designs and precious stone jewellery.

What has been the response to your recent IPO? What are your expectations there?

As declared in our prospectus, the aim of the IPO was to raise funds for our expansion. The management will continue to focus on building the business and growing the brand while working on the strategies mentioned during the IPO period.

The Government of India has made BIS hallmarking mandatory on sale of gold jewellery. How do you see it influencing your business, and also the shift in consumer demand from the unorganized to the organized segment?

We are looking at this as one of the landmark decisions that will change the way the industry has been functioning in India for a very long time. Mandatory hallmarking will standardize the purity of gold jewellery and take the industry a long way towards being more structured. It will further push the ongoing shift of business and customers from the unorganized to the organized jewellery segment. At Kalyan Jewellers, we have championed the need for BIS hallmarking over the years. We are one of the pioneers in India to voluntarily sell 100% BIS hallmarked gold jewellery across our showrooms. We believe that the practice is critical in our efforts to empower customers through benchmark-setting experience, innovation and transparent pricing, a focus we will continue to hold dear in the years to come. Our focus on a customer-friendly model does not stop at BIS hallmarking. We also offer service-backed experiences with multiple benefits through consumer-centric programmes such as the 4-Level Assurance Plan, guaranteeing free lifetime maintenance and great value on purchase, exchange and resale.

Give us a sense of how the overall jewellery category has been faring, what are the challenges before it, and what is Kalyan Jewellers’ USP over competitors in a market crowded with many established jewellery brands?

Some of the key challenges that have emerged before India’s jewellery industry are changing consumer preferences, technological interventions as well as keeping up with new-age design trends. Moreover, millennial consumers perceive jewellery as an integral part of their fashion and style, thereby leading to the emergence of multiple niche segments and product categories such as minimalistic jewellery options in white gold and platinum. As for differentiating with regard to competitors, Kalyan Jewellers has always been a hyperlocal jewellery brand. We understand that every region and every State has its own unique jewellery taste and preference, and as a brand with 13 procurement centres across the country, we are well positioned to offer our customers the exact same regional nuance they prefer. The brand’s hyperlocal strategy enables us to not only compete against national players with our localized product offerings but also with the unorganized segment. As a brand, we have set industry level standards on customer experience, innovations and transparent pricing. We have consistently focused our resources towards product development and are continuing to explore opportunities to expand our range of sub-brands and to introduce new branded jewellery lines that are targeted at both specific customer niches as well as the luxury market focused on high-end gold and studded jewellery. Also, our steady investment towards building differentiated communication has led to the creation of a loyal online community and strong following across digital platforms, especially among the next-Gen consumers.

Tell us about your long-term vision for the company, as well as immediate priorities in terms of growth, expansion to other markets, diversification and brand strategy. What next?

Kalyan Jewellers’ core value of trust is embodied in our tagline ‘Trust is everything’. This catchphrase was given to us by our own customers. It emerged as the after-effect of an intensive study undertaken to understand brand strength, which is why we believe that it embodies us well. We have already built a pan-India brand, purchase ecosystem, customer base and have earned the trust of millions. All this has been created because of the consistency in planning, execution, research and marketing which needs time as well as money. This can be fully leveraged only when we expand our footprint further, so that is our vision. It has also become increasingly important to communicate with millennials through new-age media. Thus, we have allotted 15% of our total marketing budget towards digital and social media marketing. In terms of the online jewellery market, we have witnessed tremendous growth over the years and the major factor behind this is the advent of multiple e-commerce platforms in the Indian market. Acquiring online jewellery firm Candere has augmented our presence in the online space. Today, with a catalogue of more than 6,000 products and multiple features, Candere has come much closer to our dream of making online shopping the inevitable future for buyers.

How have you seen Kalyan Jewellers evolve from the legacy family jewellery business to opening up jewellery retailing in 1993 to today?

Ours has been a business family from as early as 1908 – the family was into textile manufacturing and retailing. My father joined the family textile business after his graduation in 1972. Keeping the early learnings in mind, his strategy was always focused on the right products aimed at the right consumers, while giving them individual attention. In 1993, he diversified into the jewellery industry and started the first showroom in Thrissur, Kerala. This was at the behest of customers who advised him to sell jewellery and wedding finery under a single roof. From that single store in Thrissur, Kalyan Jewellers has expanded into all major cities in the country as well as the Middle East. Today, we have more than 145 large format showrooms and more than 750 My Kalyan customer service outlets.

Kalyan Jewellers provides a range of contemporary and traditional designs to suit every community-specific celebration, be it wedding jewellery or minimalistic everyday wear. The merchandising strategy is to fulfil distinct customer preferences based on cultural sensibilities as well as to offer Kalyan Jewellers’ popular collections from around the world. We have many sub-brands under our parent brand to cater to specific audiences, the major ones being Muhurat (sub-brand for wedding jewellery) and Aishwaryam (sub-brand for staple value-for-money products). The other sub-brands are Mudhra, Nimah, Anokhi, Apoorva, Antara, Hera, Ziah and Rang.

How did the lockdown affect the brand? Tell us about the Big Discount Mela and other strategies you have adopted as you prepare to reopen showrooms.

With lockdown restrictions in place from mid-March to May 2020, our showrooms across the country had to be shut down in order to fight and contain the outbreak of COVID-19. However, by the end of June 2020, as restrictions eased up, we were able to open most of our showrooms. The most striking trend in the industry was a resilience among consumers when it came to the wedding and festive seasons. As jewellery remains an integral part of Indian weddings, this area of spending has remained flexible and has been further buffered by other wedding-related cost-savings that have accumulated from holding smaller scale celebrations due to the pandemic. Wedding-related jewellery is our highest selling product category. With the second wave of COVID-19 dying down, we are preparing to reopen our showrooms across India, in a phased manner and in accordance with State-wise regulations, with continued focus on providing a safe shopping environment. Ensuring that customers can extract maximum value from their purchases has always been a company priority. In uncertain times like these, gold is seen as a safe haven, and our Gold Rate Protection plan will allow customers to take advantage of the fluctuating gold prices. With the Big Discount Mela, shoppers are also assured of many additional benefits on their purchases.

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