Tanishq bets big on small cities

Tanishq, the jewellery brand of Titan Company, plans to spread two-third of its expansion footprint across tier-II and tier-III geographies. Overall, the Tata Group firm aims to reach out to at least 130 new small towns while setting up 200 more outlets — company-owned and franchise — in the next five years in India.

“In India, we are unqualified leader across every jewellery segment by a long gap. But, there is still a large opportunity to grow because jewellery is always a local business. That’s why we planning to set up 40-50 outlets, mostly in towns and small cities, each year for the next five years,” Titan CEO (jewellery) C K Venkataraman told TOI on Wednesday.

Tanishq retail chain currently has 275 exclusive boutique stores in 170 cities. Out of that 226 are franchise and 50 outlets are company-owned. Setting up a Tanishq shop in a small town costs around Rs 15-20 crore, while a big-format outlet Rs 40-50 crore, he said.

According to the Tanishq CEO, unlike many other businesses, which make less profit from smaller cities compared to the bigger ones owing to sagging demands, jewellery is bought by every category of people across all places.

On the online jewellery sales, Venkataraman clarified that it helps in discovering, exploring and researching a whole range of products of a company. “But, our online sales ambition is not high, except for one-or two lighter segments. We still want to depend on retail or offline format, which covers around 96-98% of our total sales. We have not exposed all the product range for online sales. But, we will open omni-channel sales soon,” Venkataraman added.

On Tanishq’s overseas ambition, he said, “As an asset-light brand, we are examining options and hopefully, would come with a concrete plan in seven to eight months’ time. Our own market is so huge and we have only 4% share in it. We are surely going to open shops in NRI-dominated markets like Dubai and Singapore.”

The brand, the CEO feels, was weak in wedding segment. “In Stree Dhan (the ornaments given to the bride by her family), the wedding jewellery segment, we are increasing our focus. In the next few years, we will try to meet more hyper-local demands of the customer,” he added. Wedding jewellery makes almost 20% of our total sales. Rest 80% is dailyware, special occasion and men jewellery (5%).

India’s organised wedding jewellery market is worth about Rs 60,000 crore and Tanishq holds around 6% (Rs 4,000 cr) of that market. The jewellery division of Titan has sold products worth Rs 12,000 crore last year with a profit of more than Rs 1,000 crore.

Courtesy: Economic Times