Gems industry that has seen positive growth during the pandemic.
The pandemic situation has brought down many industries. Even though some of the businesses could not sustain themselves, several industries have grown during the pandemic. One such industry is the Gems industry that has seen positive growth during the pandemic.
Gem Selections and Khanna Gems Pvt. Ltd
Gem Selections is a pioneer in the Gems industry. Gem Selections is a retail brand of the company Khanna Gems Pvt Ltd, which is a leading wholesaler, importer and exporter of diamonds, gemstones, jewels and handicrafts. It is the only brand in India that has Government lab certified gemstones and has also won many awards.
Presently, Gem Selections has 1 store in New Delhi and 2 more are coming up. The brand has 324 dealers worldwide and 607 affiliates.
Gem Selections has its factory in Khambhat, Gujarat. It has a very strong online presence with khannagems.com and gemselection.in as its e-commerce websites. This online presence has proved to be a boon in the current situation. The brand has its android and iOS applications and a good social media presence. There are around 5 million visitors to its online portal each month. This itself shows how a large number of people are interested in their products.
Impact of Covid on Gems Industry
The pandemic has brought in many challenges for businesses, but it has also opened up new ways. Where the jewellery market is affected to an extent, the gems industry has seen no impact. Although the export market has been impacted, retail is still going to increase in the sector.
Gems Industry has seen an upward trend mainly because of astrological advice. People have been in a negative state of mind and the fear of security has made them curious to know the future. This has led them to astrologers who in turn advise them on gems that will help them individually. So, the demand side is upwards.
On the supply side, Gem Selections is the only organised brand in this industry and the only organisation that give EMI on the purchase of gems. It has tie-ups with banks and financial institutions. It can give EMI for gems worth five thousand to fifteen lakhs for five years making the EMI affordable.
There are 6 different plans that a franchisee can choose from. They differ in terms of investment and type of stock.
1. Experience Centre - With an investment of Rs 12,50,000, this franchisee will maintain only samples of gemstones. The revenue source is the commission on facilitating gemstones.
2. Spiritual Edition - With an investment of Rs 37,00,000, the franchisee has stock that includes rudraksha and high-quality idols and yantras. Here there is a margin given on the sale of products. Also, the stock is maintained for direct purchase.
3. Flagship Store - An investment of Rs 1,10, 00,000 is needed here. The franchisee maintains a full stock of gemstones and studded jewellery.
4. Gemstone Edition - An investment of Rs 85, 00,000 is required and the margin is on sale of gemstones.
5. Luxury Edition - This is mainly for 5-star hotels and the investment is Rs 37,00,000. The products here include unique and exquisite jewels and handicrafts. The revenue is as a margin on sales. The market is the foreign and national tourists who buy unique items.
6. Jewellery Edition - The investment required is Rs 20, 00,000 and the payback period is 1 year 5 months. There is a margin on the sale of products. The products being only gemstone jewellery. Hence, the stock has to be maintained.
The investment cost includes the setup cost, inventory cost and working capital. All plans have a general payback period of approximately 2 years and 5 months. The stock return doesn’t exist because there is no dead stock. The margin in numeric terms would be 28% weighted average margin because each gemstone has a different margin. For an experience store, it will be a flat 20% commission.
Regional exclusivity will differ from place to place. Franchisees in areas with a higher population will need a lesser radius to cater to a large market and vice versa.
The brand will support the franchisee in all ways. It is a renowned brand name. The brand will give complete and correct training. The franchisee needs no experience in the gems industry. The brand will support inventory management. There is 360-degree marketing, local marketing and daily interaction with the partners. It will also give the staff support. They have an audit mechanism - a 3 tier system in place. Franchisee owner doesn’t need to be involved in the day to day operations of the store. They are also coming up with a gemmology course that will help the manager to inform and guide the customer regarding the gemstone.
A basic model of the Gemstone Selection is different. It has identified that the customer needs the touch and feel aspect in the gems industry. So, with the online presence, it has attempted to integrate the offline store. The order is placed online, but after the customer checks the sample at a store. The brand also has taken steps to avoid any fraud. Each stone has a certificate that comes with a QR code. This code could be scanned and the inclusions of the gemstones could be matched. Each gemstone has a unique inclusion.
The organisation’s idea behind getting leads is to draw the customer to their website. It has huge content on its social media, youtube channel and AI-powered software that draws a large number of people towards purchasing its products.
Edited By: Vaishnavi Gupta