Malabar Gold & Diamonds, India's top jeweller in terms of revenues and one among the top five gold and jewellery retailers worldwide, is targeting to become the world's largest jewellery chain with revenues of Rs 50,000 crore within the next three years. The Calicut-based Malabar, started in 1993 and with revenues of $4.51 billion in 2018-19, is on an aggressive expansion spree in India and abroad to reach the milestone, MP Ahammed, founder and Chairman told Business Today.
Currently Malabar has 257 showrooms, which includes 117 showrooms in India and 140 showrooms outside India, spread across ten countries - which include the Gulf Cooperation Council (GCC) countries, Singapore, Malaysia and the US.
"Demand for gold and jewellery will continue to grow and our target is to double the number of showrooms in India and to enter ten more countries within the next three years. By the end of the current financial year, our business should grow to about US $5 billion or more. Considering the growth we have achieved so far when compared to our leading global competitors, we should reach our target to become the world's largest within three year's time," said Ahammed.
The Hong Kong stock exchange listed jeweller Chow Tai Fook (CTF) Group had sales of US$8.5 billion for the fiscal year ending March 31, 2019. It has nearly 3,500 point of sales, mainly in China. The New York stock exchange listed Signet Jewelers, the world's largest retailer of diamond jewellery with over 3,300 stores under various brands, had given a guidance of US $6.1 billion revenues for fiscal 2020, lower than the US $6.25 billion revenues during the last fiscal. Another global leader, the US based Tiffany had annual revenues of US $4.4 billion in 2019, a 6.53 percent increase from 2018.
Currently, watches and accessories maker Titan is the leading Indian gold and diamond jewellery retailer in India in terms of revenue, ahead of Malabar. Titan's jewellery division with three brands - Tanishq (277 showrooms), Mia (30) and Zoya (3), had sales of Rs 16,030 crore in 2018-19, as per the annual report. In December 2018, Business Today had reported that another leading domestic jeweller, Thrissur-based Kalyan Jewellers, was targeting to reach Rs 25,000 crore revenues from the then Rs 10,500 crore within the next five years.
Malabar, which last week opened its second showroom in Mumbai at the Palladium mall, has plans to shortly open more showrooms in Mumbai and suburbs at places like Vashi, Thane, Borivilli etc. On average, Malabar spends about Rs 30 crore to start a new showroom and the shop normally breaks even within one or two years, said Ahammad.
Malabar, which follows a unique model of co-operative entrepreneurship, has about 4,700 investors who have invested in 100 odd operating companies under a holding company. Each of the investors, mostly middle-east based businessmen and white collar employees, can invest between Rs 10 lakh to Rs 50 crore in the limited liability partnership (LLP) companies that run Malabar. On average, the investors have so far got annualised return of about 12 per cent, which includes performance linked incentives. About 27 per cent of the 13,000 employees are also part of the investor community, who together have invested over Rs 8,000 crore as equity in various LLP companies, he said.
O Asher, managing director, India operations, said Malabar has established an end-to-end manufacturing and supply chain management system, which include 14 factories including four outside India, to make the jewellery.
"We buy the same amount of gold sold every day, which is about 42 kilograms a day and have systems to monitor the revenues and supply chain management in each of the outlets", said Salish Mathew, head - branding and marketing. Malabar, which spends about one percent of its revenues on branding and marketing every year, now has Bollywood actors Anil Kapoor and Kareena Kapoor Khan, South Indian actor Tamannaah Bhatia and former Miss World Manushi Chillar as brand ambassadors.