Goal is to expand into countries such as the UK, Australia, Canada, Turkey, Bangladesh: Malabar Group chairman – ET Retail

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Kerala-based Malabar Gold & Diamonds is celebrating its 30th anniversary. In an interview with ET, M P Ahammed, chairman of Malabar Group recounts how it all began from a tiny shop in Kozhikode, its evolution and growth in India and beyond, transformation of the jewellery trade, their global forays and future plans.

1. How has the gold jewellery trade transformed in India in the last 30 years that helped you to become a Rs 43,500 crore company from a single store?

Gold is an intrinsic part of the socio-cultural fabric of the country. The eternal appeal and growing demand of the yellow metal always drive gold jewellery trade in India. The gold jewellery trade in India has undergone significant transformation in the last three decades driven by greater consumer awareness on quality and purity, growth of organised jewellery retail segment, enhanced attention to craftsmanship and increasing focus on quality and price transparency and standardisation. The growth of ecommerce and digital media have played an enabling role by further expanding the customer base and creating new market opportunities.

Jewellery demand is now driven by diverse conventional and contemporary sensibilities. The demand is volume-driven as much as value-focussed. Customers are increasingly becoming discerning. During our journey of the last three decades, our focus has always been on catering to the evolving consumer demand, setting new design trends and offering customers value for money and world-class shopping experience. The launch of 12 jewellery brands and setting up of 13 cluster manufacturing units in India and GCC reflect our growth outlook both in India and beyond. Our unwavering focus on quality standardisation, price transparency, targeted and innovative marketing strategy and customer service is the cornerstone of our celebrated journey from one showroom in Kozhikode, Kerala to a Rs. 43,500 crore enterprise with a presence across India, the Middle East and beyond.2. You had been in the spice trade but subsequently you shifted to jewellery retail. What prompted you to take up jewellery retail trade?

While running my spice trading business, I realised the importance of brand value and the power it commands in the market. A spice retailer who owed a hefty payment to me promised to repay the dues by selling his brand. The episode made me realise the fact that building a successful brand always elevates the business associated with it.

I carried out an extensive market research on other sectors and found out that jewellery retail trade despite being unorganised in nature presented excellent opportunity to build a reputed brand based on trust and transparency. Finally, in 1993, we set up Malabar Gold and Diamonds in a small 400 sq. ft. shop in Kozhikode. By introducing BIS-hallmarked jewellery for the first time in Kerala in 2001 we made Malabar Gold & Diamonds a trusted, progressive and customer-focussed jewellery brand in India. We never looked back after that.

3. You are world no 6 in terms of total revenue and aspire to be the number one by 2030. What’s your business expansion growth plan to accomplish that goal?

We have an extensive network of over 310 outlets across 10 countries including India, the GCC countries, countries in the Far East and the USA. As a part of our mission to achieve the 2030 goal, we have recently inaugurated our global base of international operations, the Malabar International Hub (M-IH) at Dubai Gold Souq in Deira, Dubai. The 28,000 sq. ft. LEED Gold Certified hub spread across four floors houses all functions including global centralized supply chain operations, enabling and supporting functions for existing operations in GCC, USA, Singapore and Malaysia. The comprehensive economic partnership agreement (CEPA) between India and the UAE encouraged us to build the base of our international operations in the UAE.

Our goal is to expand into countries such as the UK, Australia, Canada, Turkey, Bangladesh, to name a few. Our global offices in the UAE will help us streamline our expansion processes and boost overall efficiency, thus helping us expand into new markets as well as strengthen our presence in existing markets.

4. How are you planning to take Indian jewellery craftsmanship to the world? What is your overseas market expansion plan?

We have launched an initiative called ‘Make in India, Market to the World’ to promote exquisite Indian jewellery craftsmanship across the world. With 312 showrooms and 14 manufacturing units located across India and abroad, we are taking the design innovations of India to the world. Our design studio, training centre and R&D division build a strong backbone for the business to grow.

We have showrooms in India, UAE, Bahrain, Kuwait, Malaysia, Oman, Qatar, Saudi Arabia, Singapore, and the US. We are currently in the process of expanding our operations into countries such as the UK, Australia, Canada, Turkey, Bangladesh etc.

5. Gold jewellery consumption has seen steady growth over the years despite sharp increase in price. What are the key factors driving this demand?

As I mentioned, gold is an expression of the socio-cultural ethos of our country. In addition, from the investment perspective, the yellow metal is considered a safe haven investment. Apart from these two core demand drivers, the design innovations to meet the evolving consumer preferences are also creating demand for gold jewellery among younger consumer segments that prefer wearable jewellery and creations that accentuate their persona.

Our pioneering initiatives like One India One Gold Rate which standardizes the gold rate across all Malabar Gold & Diamonds showrooms in India and our quality assurance have played a pivotal role in building greater trust among customers. The organised jewellery retail is the growth engine for the jewellery industry.

6. With the government making gold hallmarking mandatory, what will be its impact on industry and consumers?

Hallmarking ensures the purity and quality standardisation of gold jewellery. Making gold jewellery hallmarking mandatory is a welcome move from the government. Bringing in uniform purity standards in gold jewellery creates a level-playing field for jewellers and the trade as a whole can now focus on achieving market competitiveness by offering innovative designs. The mandatory hallmarking signals the next phase of growth for the jewellery retail trade in India by eliminating unprincipled trade practices, infiltration of unethically sourced gold into the supply chain, lack of disclosure on the quality and purity of gold especially at the retail end. Having said that, the cost of compliance is a matter of concern for the trade at the moment. However, I think the policymakers in the government are monitoring the developments and will take necessary steps to address the concerns.

  • Published On May 8, 2023 at 05:46 PM IST

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