Aditya Birla Group’s Novel Jewels plans to open 100 stores across India in the next 18 months, investing INR 5,000 crore. This was stated by its chief executive, Sandeep Kohli.
Novel Jewels to roll out franchise models with stores
While talking to ET, Kohli mentioned that besides their own stores, the company is also considering franchise models. He said, “We’ve already got a huge unsolicited kind of response from people wanting to be our franchisees. So we will very soon roll that model out.”
Meanwhile, Novel Jewels, the owner of the Indriya jewellery brand, aims to benefit from more people buying branded jewellery instead of unorganised sector products. Organised jewellers now make up almost 40% of the total jewellery market, up from 22% in FY19.
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“There is a huge scope of growth in the branded jewellery space, so the opportunity in this market is huge,” remarked Kohli, who transitioned to Novel Jewels from Unilever earlier this year.
Novel Jewels now operates in 10 locations across India
Since launching at the end of July, Novel Jewels has been opening stores at nearly one per week, now having 10 locations in Delhi, Mumbai, Pune, Ahmedabad, Jaipur, and Indore. They’ve also established their own manufacturing facility in Mumbai.
Further he said, “While gold prices are rising, the government’s recent move to reduce the customs duty is helping consumers to purchase gold. We are probably the only large-scale player entering into this business in the 2020s with this kind of investment after many players that came in the 1990s or before.”
He mentioned that the initial customer response and sales have exceeded expectations. “People are liking our stores, assortment, design, and the experience at the store. This will help us break even faster than planned,” Kohli stated.
Notably, India’s branded jewellery market is mainly led by brands like Tanishq, Senco, Joyallukas, and Kalyan Jewellers. According to retail analyst Naveen Trivedi from Motilal Oswal Financial Services, the franchise model helps these top players grow into new areas quickly because it doesn’t require much investment and allows faster expansion.
Furthermore, Jewellery requires a lot of capital and high inventory costs for owned stores. “Average investment per store would be Rs 25-30 crore or more depending on the size,” said Trivedi. Kohli mentioned that designs in the stores will change frequently. “If you buy a piece of jewellery now and come back in 45-60 days, that design may not be available,” he mentioned.
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Jewel brand aims to be among top three
Additionally, the company aims to be among the top three national players within five years. “We want to focus on freshness of design and innovation and offer a higher variety of assortment that will focus on the new age consumer,” said Kohli. He added, “Our focus will be on having a very high assortment level – it could be as high as 30% more compared to other significant players and a freshness of design and innovation. We want to be a national brand, but also a local brand by catering to regional sensibilities through our designs.”
Kohli said, “Most of the jewellery in our store is designed by our in-house team, and we are expanding the team every month to keep innovating and bringing the best and freshest jewellery buying experience for people.” Currently, the company is focusing on offline sales, but they may offer an ecommerce model in the future.
“Most of jewellery buying still remains largely an offline purchase. A lot of discovery is happening online – search for the latest trends, designs etc. We want to follow that consumer journey where we want to be discovered online and seamlessly enable our customers to purchase offline…at some stage we will get into an e-commerce kind of selling model also but for the time being we are focussed on building our own brand experience for offline sale,” Kohli said in the end.
