Kalyan Jewellers sets its sights on becoming a $3B business


When you meet the founders of Kalyan Jewellers, in Thrissur, there is not an iota of doubt that they built their business with hard and practical decisions. These decisions are taken every Saturday by the founder, TS Kalyanraman, and his two sons, Rajesh Kalyanraman and Ramesh Kalyanraman, as they lounge in their stately home. Some of the items discussed on the table are the business metrics and performance of stores by region. There are plans being discussed to take it to Rs 20,000 crore in under five years.

Their practical approach to decision making can be enunciated with an example. Seven-years ago they wanted to create a modern organisation and realised that only software platforms could make their operations professional to scale up the business across India. They contacted the likes of QlikView and Oracle to customise processes for a jewellery retail business. Most founders, from the legacy business, implement technology because it is “Corporate” hygiene when they reach a particular milestone in revenues. They seldom use technology to their advantage and in their decision making. The founders of Kalyan Jewellers are different, they use data provided by technology platforms to question their senior management. In fact, their ears are open to everybody with ideas and make note of anything interesting, which will be discussed in their Saturday meetings. Nowadays their discussions are around the millennial customer who is glued to the smartphone and how she could be served at the store.

‍TS Kalyanraman, Founder of Kalyan Jewellers

The beginning

Twenty two years ago Kalyanraman morphed his business from a traditional textile retailer to a jeweller. It was only one store in the beginning and he got in to the business because his customers had suggested an idea of selling gold jewellery in his store. The first store was filled with mistakes and learning. Kalyanraman had ordered jewellery that did not sell in his catchment and the staff did not know how to sell jewellery. He had to start taking things in to his own hands. He started by selecting pieces of jewellery that his catchment liked and trained his entire staff in explaining what each item of jewellery was. Today, it is one of the largest jewellery retailers in the country with a turnover of Rs 10,000 crore. It has the largest footprint of stores – 94 across the country – after the Titan Company Limited’s 190 stores of the Tanishq brand. Its growth was so fast that Warburg Pincus, the New York-based private equity fund, with $35 billion assets under management, decided to invest Rs 1,200 crore in the retailer in 2014 for a minority stake. Truth to be told Kalyan Jewellers was already close to Rs 9,500 crore, in 2014, when Warburg Pincus put in the money and the company was growing with a healthy gross margin of 10 per cent on its revenues.

There are other brands expanding but not at the pace of Kalyan Jewellers. Joy Alukkas has around 60 stores in the country. Jos Alukkas has around 30 stores in the southern region of the country. Other large jewellery companies are Firestar Diamonds owned by Nirav Modi and M P Ahmmed owned Malabar Gold and Diamonds, which has an equal number of stores compared to Joy Alukkas. Other jewellers include B Govindan of Bhima Jewellers and Vallabhai S Patel of Kiran Gems. All these firms are close on the heels of T S Kalyanraman who is the largest jeweller by net worth.

“Most retailers in India are traditional and are limiting their expansion to regions. We have gone pan-India because that is the only way one can build a large business,” says 64-year-old Kalyanraman, Founder of Kalyan Jewellers.

“We never thought the business was going to be this big,” says Rajesh, the Executive Director of Kalyan Jewellers. Rajesh adds that his father had taught his brother, Ramesh, and he to be confident at all times, to learn every day and to create a long-term vision for the business.

Corporate strategy

The company has focussed its business plans in four different buckets and has capex plan of Rs 2,200 crore for its retail strategy.

Production: The company’s strategy is to make its designs fit local cultures and preferences. This is why it has jewellery pertaining to the culture of each state. However, as per Indian traditions, the southern states of Karnataka, Tamil Nadu, Kerala, and Andhra Pradesh would have more gold jewellery. In the Northern regions, the propensity to buy precious gems would be higher. However, as more Indian women travel abroad, lighter variety of gem-based jewellery is becoming popular. Kalyan Jewellers control all designs and they are manufactured by 750 sub-contractors with three production centres completing the final product. The company plans to open a factory of its own soon. The company has launched 13 brands catering to women of different age groups.

Retail: The company has 650 MyKalyan stores, which are based in more than 100 Indian cities, to reach out to customers for support and service. These 800–1000 square feet stores are now mini-jewellery stores catering to people in multiple cities and suburbs. The company wants to open 3,000 such stores across the country. It also plans to take its large format stores to 150 in three years from the current number of 94. Each store is at least 25,000 square feet in size. As part of its global expansion it has 20 stores in the Gulf Region. It is currently experimenting with e-commerce giant Flipkart to ship small jewellery items on the platform. “We spend a lot of time studying the dynamics of each market only they will we open a store,” says Ramesh, Executive Director, Kalyan Jewellers. He adds that the metrics used by his team would be around the income levels of the catchment. “Most of the time there is no organised data, we have to take the risks when we sign up on a location,” says Ramesh. He has set a target of 18 months to break even. Eighty per cent of its large format stores are profitable and the rest are on the path to breaking even because they have been set up just two years ago.

Finance: The company is planning to spend its money on technology that can bring its MyKalyan stores under one platform. It is working with a large global product and services company to implement the same. It plans to spend Rs 40 crore per large format store and open at least 10 stores a year. The company has also completely hedged itself against the price of gold, which means the company holds short positions – expecting prices to fall – in gold future contracts to beat global price movements.

Technology: It has been working on several ideas to deliver consumer experiences in the store using smart phone technology and also improving its analytics engine to understand it customers better. Sanjay Raghuraman, COO of Kalyan Jewellers, says, “We have had several startups that have come to us with ideas on how to connect with consumer by offering experiences. But we have not signed anybody yet. We need startups to understand our business first.”

Clearly Kalyan Jewellers is well on its way to becoming a $3 billion business. Their competition is clearly the traditional jewellery retailer and not the large format jewellers like Tanishq. It may have signed up big celebrity names like Amitabh Bachchan to build its brand. Still, it can do so because it has managed to grow faster than any other retailer in its category.


Camera person: Rukmangada Raja

Video editor: Anjali Achal

Production Assistant: Vincent Arthur


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