Like many in the wholesale diamond trade, Mehul Choksi, director of the Rs 2,000 crore (Rs 20 billion) Gitanjali Gems Ltd, thinks the future lies in organised retailing as the $8 billion diamond cutting and polishing business in India has reached a saturation point.
As a result, Choksi's company plans to set up an exclusive store for luxury watches, perfumes and sunglasses next year. "We plan to invest Rs 50 crore (Rs 500 million) in the luxury goods venture," he says.
But Choksi adds the company's core business will continue to be diamonds. Currently, 80 per cent of the company's revenue comes from the wholesale diamond business. Yet the marketing savvy diamond merchant thinks that the future lies in retailing and it's best to launch as many brands as possible.
In the last 18 months, Gitanjali's subsidiary Gemplus Jewellery, in partnership with Dubai-based jewellery house Damas, has launched nine brands and 25 collections, all produced at its factory in Borivli, Mumbai. The brands include Vivaaha, IIFA Glitterati, D'damas Solitaire and Origin in the diamond category.
In the last five months, Choksi has launched a gold line as well and introduced five brands, including Collection G, Gold Expression, and the Ritu Beri-designed premium Amour line was unveiled earlier this week.
Choksi's ambition is to rapidly corner share in the Rs 75,000 crore (Rs 750 billion) domestic jewellery market, of which the branded segment is not more than Rs 5,000 crore (Rs 50 billion). With price points ranging from Rs 500 to Rs 10 lakh (Rs 1 million), Choksi also thinks he has something for everyone. He has also inked a deal with the Tata-promoted Westside shopping mall to display D'damas at seven of its outlets.
The diamond trader is also putting money behind brand promotion. "We plan to spend Rs 25 crore (Rs 250 million) in marketing this year," he says, adding that over Rs 50 crore (Rs 500 million) has been invested in different brands.
A major chunk of this has gone into getting celebrities to endorse the brands. He has signed up a three-year contract with Amitabh Bachchan for its D'Damas Solitaire range. Celina Jaitley, Mahima Choudhury, Lara Dutta and Akshay Kumar are also endorsing D'damas' motley brands.
Gitanjali is an associate of the $800 million Digico group. The other brands in its portfolio are Gili and Giantti. It is also one of the manufacturers for the Nakshatra and Asmi brands.
Gitanjali, which earns Rs 1,400 crore (Rs 14 billion) from exports, is also eyeing the overseas retail market. "We plan to launch the D'damas brand in 40 outlets in Japan and 50 in the Middle East by next year," says Choksi.
