It is easy to spot Mehul Choksi in the Italian restaurant at Mumbai’s Grand Hyatt. And not because he looks the part of a Rs3,500-crore jewellery king (though he does that too, with his generous frame and his Ascot Chang-tailored clothes). Recognition comes from having spotted his photographs at various events with the 26 or so film stars who endorse his jewellery. But more on the stars later, we’ve just ordered.
Choksi asks for pizzas and Perrier—no spirits for this strictly vegetarian Jain. The Perrier arrives in no time, with a cappuccino for me. I tell him I was surprised to discover that many jewellery brands I had heard of—Nakshatra, D’damas, Gilli, Asmi, Gold Expressions and Vivaha Gold—all belong to him. “We have many, many brands,” he replies. “So far, we’ve developed 60-70 brands, of which 20-30 are quite famous.” Big numbers, certainly, and ones that might have conventional marketers shaking their heads at the fragmentation of ad spend. But Choksi clearly has a game plan.
Three large rounds of public funding have transformed a Rs10-crore family business into a Rs3,500-crore empire. The money was raised by Gitanjali Gems (named after Mehul Choksi’s two sisters, Gita and Anjali, by their father, the late Chinubhai Choksi). In 2006, an initial public offering raised Rs330 crore. This was followed by a $110 million (around Rs440 crore) foreign currency convertible bond issue that same year and then, in 2007, by a $180 million global depository receipt (GDR). In a business that has seen major consolidations over the last few years, the money proved useful; and Gitanjali Gems, with its publicly funded deep pockets, has gone on a buying spree.
Starry-eyed: Choksi has 26 or so brand ambassadors. (Jayachandran/Mint)
Gitanjali’s latest acquisition—De Beers’ Rs100 crore Nakshatra brand (with $50 million annual sales)—means that it will have sole rights over this cluster of constellations diamond brand, whose jewellery consists of seven stones set around one large diamond.
Public money has also enabled Gitanjali to go global. In the last couple of years, the company has acquired two large jewellery retailers in the US—Samuels Jewelers and Rogers Jewelers—and expanded in China as well. Gitanjali has 20 stores in cities such as Shanghai and Beijing, and plans to increase this number to 100 in the next year.
Amid all the conversation, the pizzas Choksi ordered arrive; margarita and mushroom 12-inchers, with chapatti-like crusty bases. We sample some slices and Choksi asks the waiter to pack one more—younger son Rohan, 17, and his 15-year-old daughter, Maitreyi, are pizza fans too.
Fortified, we resume the discussion on diamonds. Gitanjali is not just branding them, it is undertaking massive expansion in their manufacturing as well. Here’s where the seven special economic zones (SEZs) come in—the one at Hyderabad is already operational, six others have been allotted. “People ask me, why are you venturing into SEZs? Don’t you think it’s a real estate business?” says Choksi. “But there are nearly 30 lakh workers, most work in very bad conditions, and most unit holders are paying taxes, they don’t have the vision to get organized to go to a better space. By setting up an SEZ, we are doing all this for them and it is going to work,” he says confidently.
For the 48-year-old chairman of this jewellery concern, business is all about “branding” and the “value chain”, and these are two terms he uses incessantly. Certainly, both make sense. So his plan is to increase profits by narrowing the up to 17 stop points such as brokers, middlemen, factories, wholesalers, each with a 3-4% net profit.
And what better way to capture the value chain than to get international jewellery brands to manufacture at the Gitanjali SEZ? “Why does the consumer need to know where it’s made? There are lots of Italian brands that have wonderful products, but they do not communicate. They do not spend and they have a weak distribution because they are conservative. I see a tremendous opportunity to bring them to this country,” he says.
Choksi has already done the costing on his many visits to Europe, where there are factories with 800 workers, each probably costing more than 30 times an Indian worker (or $10,000 per month per worker as opposed to Rs10,000 per month for an Indian worker).
One such Italian brand, the Stefan Hafner line, and Gitanjali have already tied up as part of their entry into the watches, silver ware and luxury goods segment.
All this makes for a mind-boggling array of brands. I ask Choksi whether he plans to keep all these sub-brands separate. In response, he points to the jewellery I am wearing: a silver bangle, a Rajasthani pendant and silver earrings. “What you are wearing here and here and here is different. You need to have a different communication for each. If you put them all together, that’s not right... So if you’re looking for something in particular, you go to Collection G (and) you know the pieces are small and simple; for Gold Expression, it’s the language of Italian gold... Just a brand like Tanishq or like Tribhovandas Bhimji (Zaveri) doesn’t mean anything,” he says.
Our pizzas are cleared away, Choksi switches from Perrier to cappuccino and we continue talking brands.
Each of Gitanjali’s many brands has celebrity endorsers and I ask Choksi whether he enjoys hanging out with these film stars. He smiles. And then sighs. “Mostly, they act as stars. It’s tense. It is very difficult to deal with them. If there was a show right here (at the Hyatt) now and they were upstairs, they would take 2 hours to come down. If they don’t come down for 2 hours, they feel their value will increase.” Choksi has had superstars such as Amitabh Bachchan endorsing his brands and I ask him how those events went. “Amitabh Bachchan is very conservative,” he says. “He doesn’t speak at all.”
And what of the others? Choksi tells me of one such brand ambassador (he won’t say which) who was accompanied by her mother for a series of shop openings. “At every shop, the mother would sit back and ask for a jewellery piece; she would go away but her mother would stay back, it got very embarrassing.” I google, almost immediately after I leave, the brand ambassadors for Gitanjali brands—Lara Dutta, Neha Dhupia, Perizaad Zorabian and even Aishwarya Rai. Whose mother could he be referring to?
As for all the other jewellers, he says: “They’re all going to the left, where there is a big traffic jam, thinking how much cheaper they can get, whereas I am always trying to think how can I take Nakshatra to the next stage. How I can charge the multiples that are charged in Japan or that are being charged by Cartier?” He quotes from his guru Jagdeep Kapoor: “People go for mining. Why do you mine the mine? Mine the market, it’s much deeper and much greater and much easier to mine.”
So what does Choksi do when he’s not mining the market? He travels extensively. He enjoys spending weekends in Venice, Florence or Paris. And when he’s in Mumbai, he usually unwinds on his yacht. I ask if he enjoys sailing. “No, not sailing, it’s a yacht,” he replies. Suitably chastened, I splutter, “So do you...yourself?” He says, “No there are people who do that but I love going into the sea at a fast rate—it’s just a beautiful feeling.”
Born: 5 May 1959 (Mumbai)
Education: Studied commerce at GD Modi College in Palanpur, Gujarat
Favourite Gadget: The iPhone
Drives: Mercedes E-Series in black
Favourite City: San Francisco, US
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