Mumbai: Novel Jewels, the jewellery business vertical of Aditya Birla Group, is planning to open 100 stores across India in the next 18 months with an investment of Rs 5,000 crore, its chief executive Sandeep Kohli said.
Besides owned stores, the company also plans to look at franchisee models, Kohli told ET in an exclusive interaction. “We’ve already got a huge unsolicited kind of response from people wanting to be our franchisees. So we will very soon roll that model out,” he said.
Novel Jewels, which owns the Indriya jewellery brand, hopes to cash in on the increasing trend of jewellery consumption moving from the unorganised sector to branded players.
Currently, organised jewellers account for nearly 40% of the total jewellery market, up from 22% in FY19.
“There is a huge scope of growth in the branded jewellery space, so the opportunity in this market is huge,” said Kohli who joined Novel Jewels from Unilever earlier this year.
Novel Jewels has been expanding at a pace of almost a store a week since its launch in end-July, and has 10 stores across Delhi, Mumbai, Pune, Ahmedabad, Jaipur and Indore. It has also set up a captive manufacturing facility in Mumbai.
“While gold prices are rising, the government’s recent move to reduce the customs duty is helping consumers to purchase gold,” Kohli said. “We are probably the only large-scale player entering into this business in the 2020s with this kind of investment after many players that came in the 1990s or before.”
He said initial customer response and sales have been better than expected. “People are liking our stores, assortment, design and the experience at the store. This will help us break even faster than planned,” Kohli claimed.
India’s branded jewellery market is currently dominated by players such as Tanishq, Senco, Joyallukas and Kalyan Jewellers.
The franchise model is one of the major growth catalysts for top players to expand into new geographies as it is asset-light and enables faster reach, said Naveen Trivedi, retail analyst tracking the jewellery industry at Motilal Oswal Financial services.
Jewellery is a capex heavy segment and requires high inventory cost for ownership stores. “Average investment per store would be Rs 25-30 crore or more depending on the size,” Trivedi said.
