As part of an expansion programme, Gitanjali Gems, the integrated diamond and jewellery manufacturer and retailer, plans to enter the e-commerce business, with an investment of Rs 10 crore. It is the first such venture by a company in this sector in India.
Gitanjali has targetted that a tenth of its estimated annual sales in 2015 would be through e-commerce. Its sales last year were Rs 2,700 crore.
Work began last week on designing a website and it has planned a trial run by the end of next month. E-commerce deals should begin by the end of March. “Ours will be a very different kind of e-commerce, where all kinds of gold and diamond jewellery and lifestyle products will be available under one roof at a competitive price,” said Mehul Choksi, group chairman.
Jewellery booked through its website would be delivered to customers through local retail chains across the country. It is scouting for tie-ups with other retailers for such delivery. The company has about 2,800 ‘points of retail presence’. It added 150 to its 200-odd franchise stores in the past three-odd months and has planned to add 300 more before launching the e-commerce business.
E-commerce in jewellery has been prominent for quite a while in developed countries. It is, as mentioned earlier, a new concept for India. “We want to capture the opportunity,” said Choksi.
The company has three diamond and gold processing units — one each in Mumbai, Chennai and Coimbatore — and plans to set up another one in this city, at an investment of Rs 25 crore. This would double its diamond processing capacity from 60,000 pieces per month to 110,000 pieces, and gold consumption from one tonne per month to 1.4 tonnes.
The plant is set for commercial production by the first quarter-end of the next financial year, Choksi said. He added: “Nearly 95 per cent of our jewellery is manufactured inhouse. The current expansion in manufacturing will support our big retail move.”
Presently, all the company’s products are available under the same roof. A proposal to convesrt each of its 25-odd brands into independent products, each with a dedicated set of stores, is the subject of a joint study by three consultancies KPMG, Roche Child and Keynote, who’re working on Gitanjali’s restructuring.
A number of global private equity companies have indicated interest in acquiring stake in the company’s retail and manufacturing business, due to the growing consumption trends in India. “We are studying various proposals, which will be finalised soon,” said Choksi.
