The Long and Short of Retail Industry
India’s traditional craftsmanship and modern jewellery designs have taken the world by storm. Thanks to the retailers’ community that constantly endeavours to reach out to newer markets. Whether setting up a store in a different city or venturing in to a foreign market altogether, the community has charted new territories with uncommon élan. In an attempt to understand the present jewellery retail landscape better, especially after the regulatory changes brought in by the Central Government in terms of demonetisation and Goods & Services Tax (GST), we reached out to the prominent jewellery retail houses of India. In the first series of interviews with K Srinivasan, managing director, Emerald Jewel Industry India Ltd., Coimbatore and Sankar Sen, managing director, Senco Gold Ltd., Kolkata, we have tracked the current state of the retail industry, expectations from the upcoming sales season and what the millennials want.
Constantly on Growth Mode
From a humble beginning as a single store company, Senco Jewellers Ltd. has today grown in to a prominent retailer with pan-India presence. Along with a number of swanky retail stores across various Indian markets, the group has expanded its reach through a wide network of franchisee partners. With its unique footprint across India, Senco has built a loyal customer base that vouches for its alluring collections, supreme quality and excellent customer service. Sankar Sen, managing director, Senco Gold Ltd., gives the complete lowdown on the company’s making and milestones.
The Growth Story
Under the stewardship of MC Sen, Senco Jewellers started its operations from a modest store at BB Ganguly St. Kolkata in 1938. Later, the business legacy was carried forward by PC Sen (second generation) with the opening of more branches in Gariahat and Shyambazar in the following years. But under the dynamic leadership of the Sankar Sen (third generation), the group grew into its present avatar Senco Gold Ltd. and from 2001 onwards, started spreading its wings across Bengal. The momentum of growth and expansion of the group was further accelerated by Suvankar Sen (fourth generation) when he took up the reins in 2007 and by 2012, the company emerged as the largest jewellery retail chain from eastern India and one of the biggest in the country.
In the last two years, the company has witnessed a scorching pace of expansion adding almost 30 new stores and increasing their retail space to almost 2,00,000 lakh sqft. From a single store company, today Senco Gold Ltd. has transformed into a corporate with 84 retail stores across 14 states. It has a pan-India presence in markets like Kolkata, Mumbai, Delhi, Bangalore, Lucknow, Guwahati, Patna, Bhubaneswar, Ranchi, Bhopal, Raipur, etc., under the brand name of Senco Gold & Diamonds. Keeping with the present pace of expansion, Senco Gold Ltd. is all set to reach the milestone of 100 retail stores in India by 2018. Presently spearheaded by Sankar Sen and Suvankar Sen together, the group employs more than 1,500 professionals and engages more than 2,500 dedicated and highly skilled karigars, crafting more than eight lakhs jewellery pieces every year.
Senco Gold is a pioneer in producing lightweight handmade jewellery which suits the pockets of a typical middle class customer in India. Being headquartered in Kolkata gives it unique access to a pool of karigars who produce a variety of latest designs which are light and trendy. Currently, the gold jewellery business constitutes 92 per cent of the revenue and diamond, platinum and studded jewellery forming the other eight per cent of the revenue.
As all the Senco Gold jewellery are hallmarked for purity by a third party, Senco as a brand has earned the customer’s trust and loyalty. The diamond jewellery is also certified by internationally reputed third party laboratory for the quality, colour and cut of the diamonds. Moreover, there is a transparent and customer-friendly exchange policy for all jewellery purchased from Senco which gives customers’ further peace of mind. We also have an 11-month instalment scheme called ‘Swarna Yojana’ which enables the customers to plan for their jewellery purchases. Trust, excellent customer service and long-standing relationships have enabled Senco to continue servicing its 6,00,000 customers and keep adding new ones.
Senco Gold Ltd. is one of the few jewellers who have a successful franchise model. With one franchisee from 2001, the business has grown to 40 franchisees with a sizable turnover of 550 crores in FY17. Senco Gold treats its franchisees as respectable business partners with equal stakes and as a part of its expansion plan, is working towards growing the franchisee business in the coming couple of years. Through this asset light model, Senco Gold Ltd. has substantially grown its scalability.
Trust will Win Customers
Due to a number of regulatory changes brought about by the central government, we do see an upheaval in the industry. We feel that more and more customers will now migrate from the unorganised segment and smaller stores to bigger organised players and chain stores. Jewellery business has been around for a long time, spanning across centuries and in all these years, customers have seen many upheavals and changes. They will continue to buy jewellery with same enthusiasm as before but yes, now they will shift towards more trustworthy jewellers who provide a better customer experience. The industry should adopt professional practices and ensure transparency to keep in line with these regulatory changes initiated by the government.
A Systematic Change
Senco has invested in ERP and other systems and that has enabled us to organise our inventory and do procurement planning and thus, manage the supply chain efficiently. The other innovations include: investment in latest ERP systems, setting up of a state-of-the-art CRM system and develop a business intelligence tool to monitor and manage the business. A karigar portal to manage the supply chain and karigars is also under development. That apart, we have chosen one of the top four auditors like KPMG and hence, our transparency of records has made us an attractive option for investments. The organised players are bound to grow more, as the customers shift to a better customer experience and trustworthy brand.
The customer trends are changing. More and more women are entering the workplace. Also, jewellery is competing with other products like travel packages and mobile phones in a woman’s aspirational needs and the available money to spend. Senco is adapting to these new trends by catering to them with lightweight and everyday wear jewellery. Our focus is on creating new designs, affordable diamond and platinum jewellery for the modern woman. We have a dynamic and very creative pool of designers who are dedicated to create trendy designs for modern-day women.
We are enthusiastic about the upcoming jewellery exhibitions and bullish about the sector in the medium term. During the festive and wedding season this year, we are confident that the business will be robust and customers will come to the stores enthusiastically for their jewellery purchases.
Sheer Grit and Determination
With over three decades into the jewellery manufacturing business, Coimbatore-based Emerald Jew
el Industry India Limited (estb. 1984) continues to stay true to its art while retaining its distinctive style and creativity. Through its unmatched craftsmanship, designs and modern manufacturing techniques, the company has earned good business reputation, built a strong manufacturing base and employed a skilled workforce of 4,500 people. The guiding force of Emerald has been the Managing Director, K Srinivasan, who has 33 years of rich and varied experience in the field of jewellery manufacturing and is known for his business acumen, determination and perfectionism. He spoke to Floroscent about his company’s illustrious journey, uniqueness of the brand and more.
Journey and Milestones
In my 33 years of journey, since Emerald Jewel Industry’s inception, from a humble handmade jewellery manufacturer, we have grown into a global jewellery brand equipped with state-of-the-art facilities and latest technologies. I had been deeply involved with Emerald every step of the way and feel proud that today, it is an iconic brand. There is a great demand for our jewellery in retail due to their uniqueness. The company’s retail arm – JewelOne, too has a strong presence in Tamil Nadu and Pondicherry with 13 exclusive showrooms reaching out to the jewellery aficionados.
Our company’s philosophy is to follow business ethics scrupulously and our strength lies in delivering innovative designs, quality finish and purity which are also the key factors for our success. To sustain this reputation, we are constantly upgrading our systems with new technologies as and when they are available in the world to jewellery manufacturing. This approach has enabled us to evolve into a jewellery manufacturer with offerings across all categories, be it gold, platinum, silver or diamond and boast of capabilities to make whatever designs our customers want. Customers can give their own custom-made designs and with the help of our proficient team and advance facilities, we can replicate the same and satisfy them. By understanding customers’ needs, we are continuously creating new designs and that has become our USP. That’s not all. We can deliver quality products at affordable rates.
The Government Policies and Retail Landscape
The imposed taxes by the central government on jewellery are reasonable and the customers totally understand them. Like any change, initially there will be a bit of reluctance to accept them but in the long run, it will be beneficial for the industry. The government is very clear about the system in the interest of the country. So, no excuse will be accepted, except to follow the government’s directives. This is a total transformation and only the fittest will survive. I strongly feel that the entire industry should function in an organised way only. There is no question of being unorganised now. If you are organised, you will be in the industry otherwise you will be nowhere. No choice at all!
Expectations from the IIJS-2017
I am very confident that we will do a good business at the IIJS this year. We are coming with a range of new lightweight collection called Emerald NXT, which has been specifically developed keeping in mind the younger generation. Also, we will introduce a new colour range of jewellery, temple jewellery, new version of handmade traditional jewellery and CNC-based rings and bangles. I feel lightweight and unique designs in jewellery will find many takers at the show, this year.
The present setback is temporary only and the industry will not suffer much. I am confident that we will have a very good business in the upcoming wedding and festive season.
Conclusively, the opportunity in the jewellery retail market is immense but this opportunity exists only for those who can visualise the future and reinvent themselves in order to address the associated challenges. Especially at this juncture, when the industry is undergoing a transformational phase owing to the regulatory changes, the only way to survive and thrive in this sector is to accept and align with the reforms. That apart, a special focus on the millennials, as an important consumer segment, for they form a huge part of the country’s population with distinguished requirements, is the need of the hour. It is also high time for retailers to go beyond the boundaries of sales, marketing and merchandising, develop a holistic understanding of the industry and restructure their business models to cater to the evolving needs of this dynamic market. In the following edition, we will bring to you the series’ next batch of retail stalwarts and present to you their growth story, viewpoints and more.