ALL THAT GLITTERS IS KALYAN

An exclusive with the alchemist who is transforming the gold retail market

Kalyan’s loyalty to their customers is as deep-rooted as our traditional loyalty to gold. The yellow metal has been one the most trusted assets for centuries in the country and Kalyan is a name that has personified this trust with its brand. This trust the brand has acquired has been instrumental in inviting a US based private equity firm, Warburg Pincus to pick up 10-12 percent of Kalyan’s stake. In India, gold comes alive through its history, trade, economy, mythology, and craftsmanship. The fact that there is no alternative to this coveted metal is the reason for its growing demand. India is the highest consumer of gold in the world. In the last decade, Indians spent INR 18lakh crore on buying gold in spite of the price of this precious metal going up by over 250 % during the same time. 3 % of India’s population resides in Kerala which consumes 20 % of the country’s gold every year.

To be trading in this significant metal and making a mark in the hearts of the millions of choosy customers in a very short span of time is a credit unique to Mr. TS Kalyanaraman who is supported by his two sons, Rajesh and Ramesh, Executive Directors, who takes care of Purchase & Finance and Marketing and HR respectively.FWD Business goes in conversation with the alchemist who is transforming the gold retail market, the man behind Kalyan.

From humble beginnings to a billionaire, tell us about your journey.

In 1993, at the behest of our clients (from the textile showroom) we decided to enter the jewellery business. Our customers felt that it would be convenient to buy textiles and jewellery under the banner of Kalyan. With an initial investment of Rs. 75 lakhs, which included Rs. 50 lakhs bank loan, we launched our first showroom in Thrissur in Kerala. The showroom challenged existing convention through its large format; air conditioned environment and washroom facilities.

75 lakh investment in 1993 today, Kalyan jewellers is eyeing for over 13,000 crore turnover. We would like to know the challenges faced and milestones you achieved over this years and what is your success mantra?

Kalyan Jewellers has emerged as a trusted and successful jewellery brand as it has focused on doing business in a fair and ethical manner. Our core value Trust is Everything is embodied in our business.We have ushered transparency into the sector by introducing BIS hallmarking and rate tags that clearly spelt out making charges. We were the first to launch customer service outlets in smaller markets, called ‘My Kalyan’ to educated them on the nuances of buying jewellery and also providing them with several opportunities to extract more value from their purchase. The Kalyan Gold Card loyalty programme was a first in the industry and we have recently launched a new concept through the Kalyan Priority Card programme. More than 90% of our business comes from repeat customers -a testimony to the trust and loyalty enjoyed by the brand. I must also add that Kalyan’s success rides on the commitment of more than 8000 employees, 4,000 artisans and business associates who live the Kalyan’s values.

An advice that I got from my father is that one must always sell quality products at reasonable prices, this way, even if we didn’t make large profits, the business will be sustainable. At Kalyan Jewellers, we keep our profits minimal and focus on growing volumes. That has kept us in good stead and this mantra has helped us build lifelong relationships with our customers.

One of the top equity major Warburg Pincus made an investment of 1,200 crore. What made you look out for VC funding and how did you make this happen?

The investment by Warburg Pincus was the first and the largest private equity investment into the jewellery industry in India. We were approached by a few others as well, but we narrowed down on WP because the chemistry between us worked out better than with the others. There were, I would hesitate to say, a few players who had valued us better than WP. But we took a call that it was the relationship and the trust that we had in one another that was more important than the valuations.

Warburg Pincus has a track record of handholding companies like Bharti and Kotak. They are a longer term player and as the single largest directly owned jewellery manufacture-retailer in the country, that is a commitment we understand.

It is easy for the online jewelry portals to receive funds than the traditional ones. Your guide for the traditional jewelers who would want to go for VC funding.

Things worked a little differently for us. We were already an established player, doing well for ourselves when the VC funding happened. We did not do anything specific or out of the way to attract them. My advice therefore would be to continue doing your business, in the best possible manner, and that will be reason enough for people to want to invest in you.

How has been your association with Flipkart and guide us through your online growth statistics that has made you come up with your own online portal?

We joined hands with Flipkart  in February last year and it has been a wonderful association and also a good introduction into the ecommerce space. We intent to launch the first phase of our own ecommerce website by Diwali this year. Phase two is slated for the next financial year. The larger plan is to integrate the brick and mortar business with the online sales, so that customers who purchase online will be able to come to visit the nearest showroom for exchange.

You are also planning to expand to international markets like Malaysia and Singapore, what is your campaign style, whom will you have as the brand ambassadors for the International stores?

Malaysia and Singapore are potential markets and we would like to expand there, as part of our long term vision of being present in every market where people take to gold. It is too early to comment on a specific campaign plan for these markets. Our brand ambassadors are icons in their own right and exemplify the Kalyan brand values of Trust and Timeless elegance. Each one of them plays an important role in highlighting Kalyan’s best practices be it quality, transparent pricing, designs, service and innovation. When it came to narrowing down on names that we wanted to be associated with, we looked at personalities and not just their box office history.

Our ambassadors are Mr. Amitabh Bachchan, Ms. Jaya Bachchan, Ms. SonamKapoor, Mr. Prabhu Ganesan, Mr. Akkineni Nagarjuna and Ms. ManjuWarrier.

What are your plans for expansion in other Indian states?

This fiscal, the plan was to open 20 showrooms (15 in India and 5 in the Middle East) with a total investment of Rs. 900 crore. 11 of these are in new markets – 3 in Rajasthan (launched in April), 3 in Kolkata (launched in May) and 5 in Uttar Pradesh and Madhya Pradesh put together.

You have entered into Real Estate Business and also planning to enter the entertainment and education sector, how do you plan to stand out in the competitive sector?

Ours is a legacy of trust, and to that we hold on, no matter what the line of work. Since its inception in 2011 Kalyan Developers has focused on building world-class homes that are contemporary, luxurious and provide the latest in amenities. It has an enviable track record of delivering quality homes on time and exceeding customer expectations. The same ideology will be followed in the other sectors we plan to venture into.

Recently you had signed an agreement to build 2,000 new homes for marginalized families, we would like to know more about your philanthropic activities.

As part of our community development initiatives we have identified housing and sanitation as the key focus areas. This also gives us an opportunity to contribute to the Government of India’s schemes of ‘Housing for All’ and ‘Swachh Bharat Abhiyan’ launched by the honourable Prime Minister Shri Narendra Modi. We are endeavouring to build collective capacity and have committed Rs. 20 crore to build 2,000 houses for the under privileged sections of society in the Indian states of Telangana, Odisha, Andhra Pradesh and Kerala over the next two years. We have also built toilets in Government schools in Kerala and are building homes in Kerala as part of the state government’s Zero Landless Initiative.

But it is not always about the money. During the floods in Chennai, we were able to mobilise our staff from nearby showrooms and rush essentials within 48 hours after the deluge. Joining the bandwagon of jewellery trade since 1990’s, Kalyan has been extensively known for their trustworthiness, quality and fair play of business. From taking the initiative to sell only BIS (Bureau of Indian Standards) hallmarked jewellery to rewarding their customers with a loyalty programme by introducing the Kalyan Gold Card to opening 101 service centers called ‘My Kalyan’, Kalyan jewellers have epitomised customer satisfaction. Substantiating the same, chairman of the company, TS Kalyanaraman himself calls at least 10 customers to get first hand feedback. The extent of Kalyan’s devotion to its clienteles remains unparalleled with its competitors.

Kalyan opened its 12th store in UAE, expanding its golden trail from 48 stores, 4300 employees in 2012-13 to the recent total of 104 stores with 8000 employees and a mega valuation of INR 13, 000 crore. As the company continues to expand in India and overseas, TS Kalyanaram and his sons are on a persistent move to make gold synonymous to ‘Kalyan’.

Sonam Kapoor on why she chose Kalyan Jewellers.

In the business of Jewellery, Kalyan Jewellers is a highly respected and trusted name. They have grown to become the largest brand in the country, mainly because of their values and the trust that lakhs of people have placed in them. And personally, when I met Mr. Kalyanaraman and his family I was overwhelmed by their simplicity, humility and warmth. Theirs is a tight knit family, just like mine. And it was an easy and happy decision for me to be part of brand Kalyan because I believe in the same values more than anything else. And I am also honoured to be a part of the larger Kalyan family that includes Amitabh sir, Jaya Ma’am, Prabhu sir, Nag sir and Manju as its members.

Text: Sangheeta Bhattacharya 

Photos: Jinson Abraham 

Styling: Lakshmi Babu 

Makeup: Blessy Mary Chacko 

Retouch: Jemini Ghosh