In search of lustre

DTC revamps strategy, to launch new diamond brand

Diamond Trading Company (DTC), the sales and marketing arm of De Beers, the diamond cartel that owns 60 per cent of the world diamond business, is introducing a new jewellery brand called Sangini in India.

To be launched in September, Sangini, priced upwards of Rs 7,500, will sell through 600 retail stores in the first year. "The brand will have a national presence and is inspired by the sun," says Samit Bhatta, sales and marketing manager of DTC's India office.

DTC executives say the idea behind Sangini is to offer a "neighbourhood" diamond brand to the Indian consumers and to be present across a range of price points. Introducing Sangini, however, does not mean that the company's flagship brand Nakshatra is taking a backseat.

It's brand ambassador Aishwarya Rai has done yet another high-budget campaign for Nakshatra and DTC has spared no cost on the ad film. The star is said to have charged close to Rs 5 crore and the campaign has been shot in Namibia by Tarsem Singh.

But why is DTC taking a big gamble? For starters, it's to get a bigger foothold in the Rs 750-crore branded diamond jewellery market, the fastest growing (50 to 70 per cent) segment in the Rs 54,000-crore jewellery business.

However, the bigger reason is that DTC is trying to set its house in order after witnessing a "below-than-expected" sales growth of its three-year-old Nakshatra brand.

Though DTC officials do not divulge figures, an insider says Nakshatra's turnover is about Rs 65 crore. And there are at least 200 new diamond brands, 16 of them with national presence, jostling for consumer attention.

DTC itself has Arisia, the high-end solitaire brand (Rs 25,000 onwards) and Asmi for working women (up to Rs 15,000), retailed through 48 and 360 retails stores respectively.

To set things right, four De Beers sightholders for Nakshatra "" Gitanjali Jewels, Unidesign Jewellery, Kirti Ornaments and Josh Diamond "" have come together to form a new company called the Brightest Circle Ltd.

It plans to streamline the distribution and marketing network of DTC's flagship brand. Currently, the sightholders manufacture products for Nakshatra and DTC lends it name and shares the promotion cost.

Diamond industry sources say that Brightest Circle is reworking the Nakshatra strategy and will introduce completely new designs to align with the aspirational needs of young spenders. Also, though Nakshatra is retailed at 275 shop-in-shops, most retailers push their own brands.

"The sales target for each shop is between Rs 30 lakh and Rs 40 lakh a year. But most fall far below target and hardly do business worth more than Rs 3 lakh-Rs 4 lakh," says a source. Brightest Circle, it is learnt, plans to axe retailers who have shown poor performance.

Bhuvan Khimji, chief operating officer of Brightest Circle, says that currently 90 per cent of its business comes from traditional jewellers whereas 5 per cent of its sales are generated from its presence in malls like Pantaloons and Shopper's Stop.

India has 40 De Beers sightholders of the total 86 that the company has worldwide. To give a fair share of the pie to different sightholders, DTC has carefully divided its business. Apart from Brightest Circle which manufactures the Nakshatra brand, sightholders like Srenuj & Company and Blue Star Ltd produce for the Arisia brand.

The Asmi brand is similarly manufactured by Gitanjali Jewels and Kirti Ornaments, while it has roped in 13 sightholders to make products for the Sangini brand. But while DTC's brands have high recall, with interest in diamonds growing it is yet to be seen whether people are ready to buy a branded piece of rock.