Tanishq New

7/29/2019 Tanishq New

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Diversification of

into


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Gems and Jewellery IndustryOverview

Size:

Large market for Gems & Jewellery with domestic sales of over $15billion (Rs 65000 Crore)

Exports of over $15.5 billion;

18% share of total Indias exports India accounts for nearly 55% of world net exports of cut &

polished diamonds in value terms.

Largest consumer of gold jewellery in the world 20% of worldconsumption around 800 Tonnes

India is the largest diamond cutting and polishing centre in theworld 60% value share, 85% volume share and 92% share of theworld market by number of pieces Third largest consumer ofpolished diamonds after USA and Japan

The gold jewellery market is growing at 15 % per annum and the

diamond jewellery market at 27 per cent per annum.


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Overview

Structure:

The Indian Gems & Jewellery industry is highlyfragmented.

A large portion of the market 96% is in the

unorganised sector . 4% branded.Major players in branded retail are Tanishq, Gili, Carbon,Oyzterbay, Sparkle, De Beers and Cartier.


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Titan An Overview

Founded in 1984 Joint Venture between Tata Group and Tamil Nadu

Industrial Development Corporation (TIDCO)

World's sixth largest wrist watchmanufacturer 7 mn watches/annum withcustomer base of 65 million

Market Cap: 4460 CrProduct Portfolio Watches, Clocks,fashion eyewear, Jewellery


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Tanishq - An Overview

Tanishq the Jewelery Division of Titan established in 1995.The name comes from Ta (from Tata) and Nishk (golden coin in sanskrit)It pioneered the concept of branded jewelery and ornaments in India.When Tanishq was launched it sold its products through multi brand stores.In 1998 it decided to come up with its own chain of retail show rooms tocreate distinctive brand image.

Size and Growth: It is a Rs 927-crore brand. 40% Market Share in branded jewellery Growth of 40% over the past 4 years The profit chart has also seen almost a vertical climb.

The contribution to Titan has increased considerably. It is now more than 50%OF Total Titan earnings. It has 87 boutiques in 64 cities across the country.

Market Structure: Oligoply Market with players like Oyzterbay, Gili and Carbon having branded

jewelery occupying around 4% of the market while the rest being unorganizedretail sector.


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Rationales for Diversification

Foreign Exchange Crisis Huge market for Exports

Fragmented market, mainly retailer driven First

Mover AdvantageNo Branding for such a high value product. There was demand of 508 tonnes of Gold in India in 1995. There are 5 6 million marriages every year and involve a minimum of

30 50 gm of gold Jewellery.

Unethical Business practices Our research showed that woman perceived jewellery as their only personal possession.

India being the worlds second largest gold jewellery market after the United States, wewere confident we could succeed by being honest and transparent." - Bhasker Bhat, MD.


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Modalities of diversification

Type of Diversification: Pure

Mechanism: Organic Growth

Concentrated on quality Karatmeter- first non destructive method to check the quality of

goldBrought the diff varieties of jewellery together by bringingin karigars making diff types of jewellery

Good working conditions and good remunerations.

In 1995 Titan changed name from Titan Watches Ltd.To Titan Industries Ltd to change its image fromthat of a watch manufacturer to that of fashionaccessories manufacturer. Started Tanishq in 1995.


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Current Scenario

Sales in 2006-07

Titan 2136 cr.

Tanishq 1292 cr.

In 2006-07 Indias jewellery industry grew by 2per cent and Tanishq by 35 per cent.

In 2007-08 the estimated industry growth is 4 to5 per cent and Tanishq is expected to grow at 45per cent.


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Exports of Gems and Jewellery(US $Million)

Items 90-91 95-96

Cut and

PolishedDiamonds

2641.01 4661.9

Gold Jewellery 203.01 569.19


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References

www.tanishq.in Official Website

Titan Investor Meet (2007) Presentation

Data from Gems and Jewellery ExportPromotion Council

Archives from The Hindu

Icfai center of management research
http://www.tanishq.in/http://www.tanishq.in/


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Sales (Rs Cr) over the years

166

235

327412

567

731

927

0

100

200

300

400

500

600

700

800

900

1000

20000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07

166

235

327

412

567

731

918


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Profits (Rs in Crore)

1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07

Series1 -10.6 -21.96 -10.4 2.07 1.87 6 7.82 14 20 35 60

-30

-20

-10

0

10

20

30

40

50

60

70

Chart Title


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The Three Year Journey

63

32

20

109

84

35

104

90

60

0

20

40

60

80

100

120

2004-05 2005-06 2006-07

E B IT - Titan

P B T - Titan

P B T-Tanis hq

Tanishq New

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