Branded jewellery as fashion accessory

IN INDIA, gold has traditionally been purchased either as hedge investment or in the form of highly ornamental heirloom jewellry. The liberal economic dispensation ushered in at the beginning of the 1990s and the emergence of an affluent professional class in the urban space with the boom of the IT industry resulted in the creation of a burgeoning designerwear/cosmetics/fashion accessories market in India.

This has encouraged some domestic jewellry manufacturers to carve out a niche for this precious metal in the fashion accessories market in India. The abolition of the Gold Control Order and the subsequent easing of restrictions on the metal's import, including substantial pruning of import duties, has eased the establishment of this new market.

One of the better organised and more successful ventures is Peakok Jewellry Private Limited, incorporated in Bangalore in early 1991 and spearheaded by Mr. Mahesh Rao, a young entrepreneur with extensive experience in fashion accessories market. Mr. Mahesh foresaw in the mid-1990s that the Indian consumers' relationship with gold jewellry would grow beyond an investment need towards that of a lifestyle and personality statement. Seizing the opportunity, he initiated within the Peakok fold a new brand of 18 carat gold based jewellry called Carbon.

``Globally, 90 per cent of jewellry sold is as dress wear - a part of the wardrobe and not the vault,''says Mr. Mahesh Rao. ``In India branded jewellry as a fashion accessory is still a small portion, less than one per cent, of the total Rs. 40,000 crores per annum jewellry market in India, but it is growing at a tremendous pace of 20 to 30 per cent annually."

The creation, manufacture and marketing of the Carbon brand jewellry is different from the making and selling of traditional jewellry. First of all, a Carbon jewellry piece is not a one-off item painstakingly crafted by a single person. Peakok has a roster of six designers, headed by Ms. Rajeswari Iyer, an alumnus of a German design school who has worked in the U.K., Germany and India. This design team turns out around 180 to 200 styles in a year, with 75 designs per style.

``At any point of time, there are around 600 designs of Carbon brand pieces on sale and we sell an average of 300 to 400 pieces per design,''says Mr. Mahesh. ``An exception was the Sunsign design released last year which sold around 10,000 pieces."

While 18 carat gold is commonly used in Carbon products, some of the designs also use white gold, titanium, steel and gold. Diamond is the preferred precious stone but other coloured stones are also used. A technical speciality of the brand, developed in- house, is the setting of a diamond onto the ring by a single clasp giving an impression that the diamond is hanging free without a base.

Unlike traditional jewellry, which is crafted single-handed, Carbon brand jewellry is manufactured in a modern 15,000 sq. ft. factory in Bangalore manned by 85 employees. There are different departments, each devoted to one aspect of the manufacturing process, such as design, metal master making, rubber die making, wax tree making (the Lost Wax method is used here for casting the intricate gold base), vacuum injection casting, deburring, setting the jewels into the metal, polishing (dental drills with ceramic heads are used here instead of the traditional and slow hand polishing), electroplating and sand blasting.

``We are attempting here to eliminate the low productivity, quality inconsistencies and high precious metal loss associated with traditional jewellry making,''claims Mr. Mahesh Rao. ``We have instituted modern manufacturing practices such as self- contained small groups in the assembly area, self-inspection by the operators, the Japanese kaizen approach to improvements in operational practices and the like. We have brought down our manufacturing loss of gold to 6.8 per cent. The average in the traditional Indian jewellry shop is as high as 22 per cent, while the world average is only 2 per cent."

Comprising items of everyday use, (rings, chains, bracelets, ear studs, tie-pins and cuff links) Carbon items are an impulsive purchase by customers. The brand has no cycles of offtake in the year like the marriage season, which traditional jewellry has.

The profile of the average customer likely to purchase a Carbon item is a well-paid urban professional, 24 to 38 years old having a credit card. Based on the above, it was decided that Carbon should not be placed in the usual jewellry shops but made available at ``shop-in-shop''outlets in large lifestyle stores such as Shoppers Stop, Ebony, Globus, The Bombay Store and Lifestyle, Taj Khazana and some premium boutiques such as the Helvetica in Chennai.

``The Carbon range is now available in 40 outlets across 16 cities and we will be in 23 cities by 2005,''says Mr. Mahesh Rao. ``We are also planning to have our own outlets, the first of which will be opened before the end of this year. We are trying to expand our market by going in for occasions such as festivals, gifting on special days such as birthdays and anniversaries. In addition, we are looking at cross-promoting Carbon jewellry with other branded lifestyle products such as perfumes, clothing and cosmetics."

While the price range of Carbon products is modest (Rs. 2,750 to Rs. 20,000 per piece), unlike traditional jewellry for which a bargain price is struck, there is a nationally uniform MRP for Carbon items. Four years after the brand was introduced, the annual sales of the Carbon range has reached Rs. 10 crores, with an average piece value of Rs. 5,000. Mr. Rao expects the brand sales to touch Rs. 150 crores by 2005-06. Exports may start in another two years.

N. N. Sachitanand

In Bangalore

Send this article to Friends by E-Mail

Section  : Business
Previous : New Honda Accord with all the goodies
Next     : Wishes Unlimited to focus on merchandising