How PNG & Sons Silver jewellery brand Gargi achieved a valuation of Rs. 180 crore

Aditya Modak, the 32-year-old Director and Co-Founder of Gargi Fashion Jewellery by Pune-based PNG & Sons, on launching the silver and fashion jewellery brand in Dec 2021, successfully listing it on the BSE SME and setting a new benchmark in the industry

In a one-on-one chat with Soma Bhatta, Aditya Modak talks about the small yet strategic shifts that resulted in the silver jewellery segment’s exponential growth from Rs 12 cr to Rs 28 cr within a year, the potential opportunities for legacy jewellery brands to use it as a lever to capture customers young, and reimagining India’s silver jewellery manufacturing ecosystem

Edited Excerpts:

Soma Bhatta (SB): Earlier, silver jewellery was part of PN Gadgil & Sons; why did you launch Gargi as a separate silver and fashion jewellery brand?

Aditya Modak (AM): Two main reasons drove the launch of Gargi as a separate brand. Firstly, we observed a shift in consumer preferences towards jewellery as a part of their everyday wardrobe. At the same time, with the rising prices of diamonds and gold, it is becoming difficult for customers to find pieces that complement their attire. We noticed this demand within our existing silver jewellery line, which showcased growth potential. Secondly, we recognised a lack of organised players in this segment, leading to limited customer awareness about silver and quality imitation jewellery. Gargi aims to address this market gap.

SB: What made the PNG & Sons silver segment grow from Rs 12 cr in FY 2020 to Rs 28 cr in FY 2021 from the same number of stores?

AM: We made three fundamental changes. We first packaged the silver jewellery category under a new brand Gargi. Secondly, we introduced a separate back-end unit working exclusively for Gargi; lastly, we doubled the choices within the price range that recorded the highest demand.

” Our quick success is about the product mix. One of the key insights from our research was that if we are selling silver jewellery, it has to be trendy and offer ample choice. In terms of design, there was an incongruence between the traditional pieces we were selling and the expectations of our young customers “

Aditya Modak, Director and Co-Founder of Gargi Fashion Jewellery by Pune-based PNG & Sons

But essentially, it was about the product mix. One of the key insights from our research was that selling silver jewellery has to be as per the trends. In terms of design, there was an incongruence between the traditional pieces we were selling and the expectations of our young customers.

Our data showed a demand for pieces ranging from Rs 2500 to Rs 5000. So, we introduced various designs within this price range, accounting for 60% to 70% of our stock. The availability of more choices significantly influenced their buying decisions,
By doing so, from the same walk-ins, we grew the customer base by 50%, increased the ticket size by 30% and increased repeat purchases. The efforts were small, but their experience was different, significantly impacting the business volume.

We introduced a new collection every three months, specifically focusing on the fashion range. When replenishing our stock, we always aimed to bring something new, something we had never done before. Whatever worked well would continue, and others would be removed. We continuously emphasised the introduction of new designs while phasing out older ones.

SB: What changes did you bring about in the PNG & Sons retail outlets about displaying and marketing Gargi?

AM: We placed free-standing units displaying Gargi jewellery strategically near the billing counters. Besides a dedicated counter at the store, customers could easily access and explore the products while the billing process for gold jewellery was underway. The display was done appealingly. It was important for our staff to be equally convinced and knowledgeable about the Gargi silver jewellery line. Salespeople and supervisors were trained to understand the customers’ preferences and guide them accordingly. Gargi’s campaign is done separately; we don’t have a PNG logo. It says it is by PNG Sons.

” Regarding manufacturing, India’s silver jewellery industry is less well-equipped than the organised gold jewellery business. While we have the potential to start manufacturing silver jewellery in India, it is currently neglected, with only a few notable players who focus primarily on exporting rather than the domestic market “

Aditya Modak, Director and Co-Founder of Gargi Fashion Jewellery by Pune-based PNG & Sons

SB: Gargi is available online, in standalone stores and SIS format from PNG and other departmental stores. Do you think silver brands will do better online or in brick-and-mortar as a retail model?

AM: Silver jewellery brands have the potential to thrive both online and offline. While retail stores provide a significant customer experience and credibility advantage, the online platform also offers great opportunities. Currently, only 5% of our business is online, but eventually, we plan to go bigger online. We started Gargi in 2021, and we immediately went online since the start of the company. Before that, we sold silver jewellery under PNG’s name.

SB: What is the retail presence of the brand?

AM: All 29 locations of PNG & Sons stores have Gargi shop-in-shop counters. We have two exclusive business outlets in Mumbai and Pune. Additionally, Gargi has collaborated with Shoppers Stop for presence in their outlets in SIS format. We are available in three outlets across Pune and Mumbai, exploring opportunities for Bangalore and Hyderabad. Regarding online presence, Gargi sells through Amazon, Shoppers Stop’s online platform, and their website.

SB: Besides silver jewellery, Gargi offers jewellery in brass. What is the scope for alternative metals in the jewellery industry?

AM: While our focus primarily lies on silver jewellery, we also offer jewellery in premium quality brass. Regarding maintenance, customers may not fully understand the nature of silver jewellery, which always tarnishes with exposure and time. This is why we have introduced a brass line of jewellery, as brass offers more durability in polish. Unlike silver, brass does not oxidise naturally. We have deliberately categorised our brass jewellery as premium, currently only 5% of our inventory. Brass is chosen due to its utility and long-lasting nature. We have implemented quality procedures to ensure the standard of our brass jewellery offerings.

SB: Are there any specific sourcing challenges regarding silver jewellery?

AM: Regarding manufacturing, India’s silver jewellery industry is less well-equipped than the organised gold jewellery business. While we have the potential to start manufacturing silver jewellery in India, the silver jewellery market is currently neglected, with only a few notable players, and they focus primarily on exporting rather than the domestic market.
There are limited organised retailers in the domestic silver market, and those outside the organised sector often demand lower prices that manufacturers are unwilling to accept. Secondly, the margin and volume in the export market are considerably higher. Therefore, we have to rely on suppliers who source from outside India. Additionally, customers are generally unwilling to pay higher prices for silver jewellery.

” Connecting with customers at a younger age through Gargi increases the likelihood of establishing a long-term relationship with them. With a silver jewellery line like Gargi, PNG & Sons can cater to this segment and become their trusted brand “

Aditya Modak, Director and Co-Founder of Gargi Fashion Jewellery by Pune-based PNG & Sons

SB: As retail grows, what is your sense of how the supply chain will affect it?

AM: As retail grows, the supply chain will play a crucial role in its success. To fully capitalise on the growing retail sector, we need to strengthen the supply chain, expand the reach of organised retail, and create an environment that encourages domestic sales. It will enable the retail sector to match the quantitative reach of exports, which the current players still need to achieve. It will drive suppliers to shift focus to domestic markets.

SB: Are you planning to start a manufacturing unit for silver jewellery, similar to how some retailers have their gold or diamond jewellery units?

AM: No, we don’t have immediate plans to get into manufacturing. Instead, we prefer to explore joint ventures or partnerships with established manufacturers with the capacity and expertise in silver jewellery production. This approach allows us to leverage their manufacturing capabilities while focusing on our strengths, such as staying up-to-date with the latest market trends and designs. Our priority is maintaining agility in responding to market demands and delivering the latest designs to our customers.

SB: What are the advantages of a legacy jewellery brand launching a sub-brand in silver jewellery?

AM: The opportunity lies in targeting the youth segment, particularly those not actively considering gold jewellery due to its high price. Connecting with customers at a younger age through Gargi increases the likelihood of establishing a long-term relationship with them. As they progress in their careers and have the financial means, they will be more inclined to purchase gold, silver, and diamond jewellery. With a silver jewellery line like Gargi, PNG can cater to this segment and become their trusted brand. However, it’s important to note that disposable income has significantly reduced due to a consumption-based lifestyle, including expenses like EMI payments, mobile bills, and entertainment. This poses a challenge, especially in urban areas, where disposable income is scarce. Therefore, PNG needs to focus on engaging potential customers at an early age, around 15-16 years old, to establish brand loyalty and capture their attention before they reach the age when they can afford to purchase jewellery. Gargi gives a strong handle to PNG to capture this segment.

SB: What is the target customer’s behaviour towards such jewellery brands? How does it vary between offline and online platforms?

AM: Most of our walk-in customers fall within the age range of 30 to 40 years. However, the age group is typically between 25 and 35 years regarding online sales. The younger crowd, aged 18 to 25 years, who shop online are not yet brand conscious and make more impulsive purchases, often from platforms like Amazon.

Online shopping is predominantly driven by gifting purposes, with males accounting for 45% of online buyers. Many brands in this segment market their products for gifting purposes, as the pricing is appealing.

SB: What are the future plans for Gargi?

AM: So, our plan involves expanding our presence in B2C and franchising. We focus on offline and online platforms. It’s a good time for the silver market. We are working towards establishing our presence in Shoppers Stop, to be available in 7 to 10 stores by the end of this year. Additionally, we plan to franchise stores. We are also considering opening a couple of our stores. We are open to expanding beyond Maharashtra. We are currently in talks with a party from Delhi and another from Bangalore.

” It’s a good time for the silver market. We are strengthening our collaboration with Shoppers Stop to increase our SIS presence. Additionally, we plan to open franchise stores. We are also considering opening a couple of our own exclusive stores “

Aditya Modak, Director and Co-Founder of Gargi Fashion Jewellery by Pune-based PNG & Sons

As for e-commerce, our target is the metro cities. We have seen good traction from metro cities, especially Bangalore, Hyderabad, Mumbai, Pune, and Chennai. These cities have a higher level of awareness and better logistics support for online purchases. Our focus for the first three years is to maintain the growth momentum. While we anticipate some saturation and a potential need for strategy adjustments, we are prepared to adapt to any changes in the market. This year, we have set a target of Rs 50 cr turnover and are optimistic about achieving it.

The Retail jeweller India Magazine