Bengaluru: Titan Co Ltd is looking to double its market share in the jewellery space over the next 3-4 years from around 5% now, the company’s managing director-designate CK Venkataraman said in an interview. Wedding jewellery, which has been a focus area for the company within the segment, will be a key driver in reaching that target.
“We’ve done exceptionally well. And we know our first-time customer acquisition is happening at a brisk pace even in the middle- to top-end segments, so there’s clearly a migration from other jewellers," said Venkataraman, who currently heads Titan’s jewellery business.
India’s jewellery industry did not have a good 2018. In February, the Nirav Modi-Mehul Choksi orchestrated PNB fraud tainted the entire sector, impacting small and medium jewellers as well as listed chains. But the Tata Group-backed Titan has stood out as among the few brands consumers trust, and that was reflected in its financial performance through 2018-19.
On 1 February, it reported a 45.97% jump in net profit and a 35.35% growth in revenue during the third quarter. Revenue from the jewellery business — mainly retailed under the Tanishq brand — grew 36.95% while profits from the division, before finance costs and taxes, increased 76.51%. Titan earns more than 80% of its total revenue from sales of jewellery.
The company opened 40 new Tanishq stores in 2018-19, its highest number in a year, and expects that kind of acceleration over the next many years, Venkataraman said. Footprint expansion aside, it expects four other drivers to help it achieve its market share target – the wedding segment, high-value diamond jewellery, its Golden Harvest purchase scheme, and its exchange programme for customers.
“We expect Tanishq to achieve 21.9% sales and 26.5% EBITDA (earnings before interest, tax, depreciation and amortisation) compounded annualised growth rate over FY18-21 as it gains from the shift towards organized players led by strong brand, growing store network and focus on high-value studded and wedding jewellery," analysts at Prabhudas Lilladher wrote in a report after Titan reported results on 1 February.
In December, in an interview with Mint, Titan’s current and longstanding MD Bhaskar Bhat said the company expects the 2019 wedding season to be much stronger than 2018. The average bill value for the wedding segment is almost double when compared with the average bill for other categories at Tanishq, Venkataraman said. The company has around 2-3% market share in the wedding jewellery space, leaving immense headroom for growth.
“We’re already a very, very, profitable business (in jewellery) and, therefore, the emphasis is more on becoming stronger in terms of share and focusing less so on margin. But margin comes when sales growth happens," Venkataraman said.