TS Kalyanaraman, Chairman and Managing Director, Kalyan Jewellers talks about the potential of Oman and the company’s differentiators in the market. An OER interview
Oman is the fourth market that Kalyan Jewellers is entering in the GCC. What are your thoughts on the potential of Oman’s jewellery market?
We believe that Oman offers tremendous potential. There is growing affluence and prosperity which augurs well for the growth of the jewellery segment. Moreover, the country’s affinity for luxury goods also makes it a compelling proposition. Our strategy is to make a strong presence in Oman and we are therefore opening three showrooms at Al Ma’abelah, Ruwi and Baushar in Muscat. We believe that we can quickly achieve scale and size of operations.
The Sultanate has a strong network of jewellery majors in the market. What is going to be Kalyan Jewellers differentiation in a crowded marketplace?
Kalyan Jewellers will bring a world-class shopping experience to the people of Oman. Customers can expect a range of products comprising gold, diamond and precious stone studded jewellery. Kalyan is known for innovation, quality, transparency and customer service and we are confident that we will earn the trust of our customers in Oman as well. We like to operate as a local player and provide designs that appeal to the local sensibilities rather than having a centralised uniform approach. This has worked well for us and we are confident of replicating this model in Oman.
Our manufacturing operations in Sharjah will also enable us to bring the latest in designs from around the region.
Kalyan Jewellers has pioneered concepts like – large format stores, Hallmark, ‘My Kalyan’ etc. in India. Can customers expect these or similar innovations in Oman?
Initially our focus will be to create awareness about Kalyan’s range of jewellery collections and special offers we are introducing as part of the launch celebrations. Moreover there will a special collection of wedding jewellery for functions related to the wedding ceremony and reception.
Can you share the company’s turnover and net profit for year 2017? What kind of growth do you expect in 2018 and over the next three years (please share estimated numbers)?
Our consolidated turnover for FY16-17 was RO570.35mn (INR 9,589 crores). GCC contributed RO120.60 million (INR 2,034 Crores). We would prefer not to make any forward looking statements pertaining to growth.
Warburg Pincus has made a private equity placement in Kalyan Jewellers totalling to INR1,700 crore. What is the significance of this investment?
The investment by Warburg Pincus in 2014 is a vindication of the strategy and growth trajectory of the company and its best practices.
The investment has accelerated our growth plans and we have nearly doubled our showroom network over the past three years.
Does having in-house manufacturing facilities help you in offering competitive pricing in the market?
In-house manufacturing enables us to ensure that all products meet stringent quality standards. Moreover we have the flexibility to create designs in sync with customer needs and market trends, and bring agility to our response. A local production facility reduces costs and customs duty involved in importing jewellery pieces. Our manufacturing operations in Sharjah enable us to meet the bulk of the inventory needs for our showrooms in the Gulf.
Kalyan Jewellers has set a target of doubling its distribution network over the next three years from the current 121 outlets (including Oman). How many outlets are you planning in India, the GCC and Oman as a part of this expansion strategy?
While we did announce earlier that we plan to double our showroom network over the next three years, we are still evaluating the opportunities of showrooms and have not decided on the break-up for each country. Typically we finalise new showroom forays on an annualised basis. In this financial year we have launched eight showrooms in India, five in the UAE and will close the calendar year with three in Oman.
The company has used film stars as a brand ambassadors, are there any plans of using GCC based celebrities in the near future?
All our current brand ambassadors have a significant following especially with the South Asian communities in the GCC. Currently we don’t have any plans to use GCC-based celebrities.