BW Dialogue On Leadership: Kalyan Jewellers On Business And IPO Launch

Kalyan jewellers has grown nationwide as a trust-worthy jewellery retail brand and is scheduled to launch its IPO soon. Ramesh Kalyanaraman, Executive Director, Kalyan Jewellers talks to Dr Annurag Batra, Editor-in-chief BW Businessworld and Exchange4Media, about the brand and its offerings. 

Give us a sense of how did your growth story pan out? 
Kalyan Jewellers started its journey in 1993 from Kerala, in our hometown. When we started, the sector was completely unorganized, with no standard of purity and pricing. Initially, it was a made-to-order business, and all stores were 200-300 square feet area in our town. It was accepted well because it was a different kind of experience which customers had never seen before.
 
We pioneered a lot of fair practices in the sector, like a rate tag which showed the making charges. We also made the old gold exchange system transparent, as well as installed carat analyzers in our stores. We first started expanding in Kerala, then Tamil Nadu, Karnataka, Andhra Pradesh, and so forth. Today we are present across 21 states in the country and 4 countries abroad. The USP of the brand is it is hyperlocal, that is, products are curated locally, and they cater to a specific local population and their taste. We also have “My Kalyan” infrastructure, which is a unique marketing tool located in rural and semi-urban parts of this country where only field staff worked under the supervision of a manager. They get leads from marriage-related ecosystems. 

What were some of the challenges you faced along this journey? 
We started our 2nd store in Kerala itself. There we had a lot of customers asking for specific products. The service expectation was different, so we changed the inventory and sales teams, and how we marketed our brand. From that day till today it is one of the best-performing stores of Kalyan. 

Kalyan Jewellers have been very aggressive about brand building in the last two decades. What are some of the attributes of Kalyan Jewellers as a brand? 
The brand is built on core principles of trust, transparency, and hyper-localism, with marketing along these lines as well. Every year we do campaigns around sub-brands, for example, “Mahurat” which is the sub-brand for wedding jewellery, and “Aishwaryam”, which talks to value-conscious customers. So, we have been consistent in the way we have treated our brand and created the calendar for the brand. 

As a business what were the challenges given the unusual challenges faced in the last 12 months? 
First three months were a wash-out. Slowly the showrooms reopened, the revenue in Q3 now is much better than the revenue of the last Q3. We have seen predominantly two things post-covid: the shift from unorganized to organized. People want to come to stand-alone stores like Kalyan than crowded areas. Second, marriage revenue has come down because people are not calling as many guests. People saved money and that proportion is diverted to jewellery. We have seen a growth of 12-15% industry-wide. 

There is a positive buzz around the IPO of Kalyan Jewellers opening. What are your expectations?
We are a consumer-centric brand, known to people over the past many years. Like the people who have accepted our brand, we believe they will accept our IPO as well. 

What were your management practices during the lockdown? Also, how are you using technology in the lockdown and how are you using it to appeal to the next generation of consumers? 
We have been using technology productively, such as new training programs for the staff, etc. We were doing a lot of cost control measures which are done post corona. We cannot come back to certain marketing ideas we had thought of earlier, all that is to be redone. As a management team, we were working on that, with the mid-level management working on the ground level we were one of the first brands that could open stores and bring back things to normal. We also have an online platform called “Candere”, where people can research online and come for shopping offline. 

From the business, standpoint are there companies you benchmark against in the IPO price? Which companies do you look up to and why? 
We were coming the first time with an IPO. We want people to get a fair value. We are coming out with an IPO for a need of capital wherein there is a need for expansion. Over 60% of the value is with us, and I am also with the investor where I want to see the value of shares go up. 

Who are the other business leaders you lookup to in India or the world over? 
We have to learn things from every person we look at. They may not be a big entrepreneur, but there can be a small guy doing something where there will be a benefit of talking about him and what he is doing. 

In terms of investing in gold, do you see any macro trends that will benefit your business and others in your industry? 
Many new customers are coming in that was not seen till today and the drive has enhanced. This is a major advantage for organized players because even today 70% of business is with the unorganized sector. If the conversion happens to an organized segment that itself is a huge boost for our industry.