Swarovski rides high on premium, jewellery business in India

Much has changed for Swarovski in India from the time a certain maharaja used to approach Sukanya Dutta Roy, its consumer goods business director here, for specific designs. When Swarovski entered the country, its image was that of a company that produces only luxury products. Since then Swarovski has learnt a lot and changed accordingly.

The company in the past few years has moved out of its previous focus of being located in five-star hotels and has focused on premium locations at mall properties resulting from its initiative to move into a more premium category and become acceptable to a wider range of customers.

Dutta Roy says it got its distribution correct with presence in all the major cities, and now it has a certain amount of brand standing and brand awareness. "Now is the time for us to get the Indian consumer to accept us in his or her wardrobe as a regular accessory," she adds. In India, the consumer goods business brings in about 60 per cent of sales, where as globally it is much larger.

Dutta Roy, who joined in 2008, says the company is just at the cusp of premium retail growth in the country. The company, which currently stands at 40 stores, the latest one in Ludhiana, said it will continue store expansion provided its primary concern is taken care of, which is real estate. Beyond metros and tier-1 cities the company will continue its expansion into tier 2 cities as well. In 2008, when Roy joined there were just 16 boutiques.

India is now one of its core markets besides Brazil and Mexico in the 2020 transformation plan, said Markus Langes-Swarovski, member and spokesperson of the Swarovski Executive Board who also heads the Swarovski Professional Business in Wattens, Austria, in an interview to BT earlier, adding that Swarovski will be launching a particular collection for the Indian market soon. Roy says India contributes about 5 per cent of the global turnover, and is likely to increase since India is the white spot that Swarovski is keen to tap into.

Swarovski has also moved its focus on the jewellery business in 2008, which has served it well in bringing down the price point and catering to a more fashion driven market, along with the open facade at its stores. Jewellery, which is currently about 85 per cent of its products at its stores in india, is a little more than the global make up of about 80 to 85 per cent.

While the company would want to grow substantially in the country, lack of suitable locations is holding it back. The company, which has set up its stores at malls, prefers it at the locations, since their concept for an open faade works best in the locations and adjacencies can also be managed better. High streets are not a part of the growth strategy for those very reasons.

Franchise-based operations are the company's focus, Dutta Roy says adding that multi-brand operations such as Kamal Watch and Kapoor, has helped its reach grow much wider in areas such as Gawahati, Indore and Bhopal, where the company might not set up a proper boutique. What has however, held them back is availability of suitable retail space. "We have not had too many projects in the pipeline. For us, cannibalisation is not at issue, but the availability of good real estate space is," says Dutta Roy.

Despite the fact that its stores, usually a 600 to 700 sq ft in size, at smaller cities take relatively longer to turn profitable, but are still present in the company's plans. "Because that is where the growth is going to come from," says Roy adding that today a customer in these locations would not want to wait for an occasional trip to a bigger city to stock up.

Currently, about 70 per cent of Swarovski stores are in bigger cities, says Dutta Roy. Adding: "More and more stores are being planned in tier-II cities."

The company applied for 100 per cent investment in India late last year and is waiting for a response from FIPB to take the next step, which is to keep an option open for strategic investments, which may not be suitable for its franchises. "Our partners will continue," says Dutta Roy.