For becoming an entrepreneur you do not need to be a Bill Gates. With merely Rs 5-10 lakh in your pocket, you can run your own business, thanks to the ever-growing market of franchising in imitation jewellery.
IMITATION jewellery is turning out to be an ideal business proposition for entrepreneurs who are on a lookout for an industry with low investment. Innovative fashion jewellery seems to have taken a leap ahead when compared with conventional expensive gold metal jewellery. Well aware of the changing tastes of the fashion industry, Hitesh Jain, Director, Expressions Jewellery, launched his brand in August 2010.
Fashion designer Monika Pal Sood, Founder of Youshine, had noticed that there was a vacuum in the fashion industry as fewer options were available in fashion accessories. Monika started Youshine in 2008 as a specialty retail concept offering Western-style fashion jewellery and accessories to young Indian women. Monika started the business with one point of sale in Gurgaon. Elaborating on it she says: “As a trained fashion designer, I saw a gap in the market for fashion accessories and wanted to fill it with trendy yet affordable products readily available from high footfall locations. This was the main idea behind the business. My husband Ashish Sood joined the business in 2010 and together we have built the business in five locations in Delhi-NCR and three in Punjab.”
Brimming with entrepreneurial zeal Hitesh thought of entering the market, as it had huge growth prospects and that was the time they came up with the idea of selling fashion and designer jewellery online. “Both e-commerce industry and imitation jewellery sectors appeared to have a great future. Our main target area to sell the fashion jewellery was the globe, and to reach the globe quickly e-commerce was the quickest option available. Initially, after launching the website, we had a very slow response and what we learned was that it takes a little time to have a firm grip on any new venture, but we started to have our customers not only from India but also from all around the globe,” says Hitesh.
“I started my business of imitation jewellery from Chandigarh, which has a high density of fashion conscious youngsters. Starting with a small kiosk in Sector 22, we received a good response from the youth of the city as fashion jewellery and accessories were in demand,” says Dhiraj Arora, Managing Director, Trenz Jewellery. The brand was started in 1990 when Dhiraj was 12-year-old. He started it with a meager capital of Rs 17,000 and there has been no looking back since then. Dhiraj's father took a shop on rent at Shastri market in 1991 and started franchising in 2003.
Opportunities on a platter
Going the e-way Hitesh started the operations of Expressions Jewellery on August 17, 2010, following which he formally launched the website on January 20, 2011. The brand has widened its horizons and has devised several selling channels like e-commerce, bulk exports, wholesale, retail, etc.
About the market size and opportunities present in this industry, Hitesh says: “The current market size of this industry is pegged at $290 billion and we expect it to be about $590 billion within five years.”
While Ashish Sood of Youshine believes the fashion accessory industry is growing owing to the fact that India has a large population of young people. “India being the youngest population in the world, there is immense potential for Youshine in the next five years. Youshine's target group is the young Indian woman, who is now independent financially and has much higher disposable income to spend on herself. Youshine always strives to bring something new to the customer, which is just what the Indian woman is looking for. We hope to be a 100-crore brand in the next five years,” he says.
Hitesh prefers a store format for its outlet but cannot ignore SIS/kiosk model for the brand. We prefer the brand to be established on high streets and at high footfall malls. On the other hand, Youshine is so far present as a kiosk but plans to launch two exclusive brand outlets (EBOs) in Bangalore and Mumbai, respectively. There is merit in both formats, depending on the location, mall rules and regulations, and of course, commercials. Youshine is located primarily at high-end malls with high footfalls. Expressions' EBO is located at Kingdom of Dreams, Gurgaon.
Youshine has five kiosks in Delhi-NCR and three kiosks in Punjab. The brand plans to have a mix of kiosks and EBOs across major Indian cities. Dhiraj says: “There was a need for pocket-friendly fashion accessories in the market and we designed such jewellery. With gold getting expensive day by day, imitation jewellery is the perfect replacement for it.”
Customising for consumers
The imitation jewellery industry also faces stiff competition with a large number of brands present in the market. Leading imitation brands have customised their product and franchise as well making it easily reachable to its target audience. Hitesh Jain affirms: “When we entered this sector we had many competitors and we still have, but to let Expressions Jewellery shine we needed to have a unique selling proposition (USP) which was to see to it that we did not compromise with the quality, latest designs, trendy fashion, and the most important USP was to target all types of customers. We managed to do the same by working very hard to provide the best prices to the customers as compared to our competitors.”
In the same way Youshine has been successfully able to make a mark for itself by introducing 30 new styles every week at competitive prices.
“Youshine exclusively offers fashion jewellery, whereas most other brands deal primarily in apparels, footwear, handbags, etc., and have fashion jewellery as a side business. Youshine is the only brand that operates both in the offline and online space,” says Ashish Sood.
Youshine products cater to all cosmopolitan Indian women and believe that they serve a mindset rather than a specific age group. However, the sweet spot is between the ages of 18 years and 34 years. Also, the Youshine Girl range of products is designed specifically for girls between 3years and 14 years.
Expressions Jewellery claims that it's the brand's USP to target all age groups and all sections of the society. “We have products for any young kid from 12 years of age to any female of any age. Also the price range of our products starts from Rs 50 and goes up to Rs 35,000, which helps us to cater to all sections of society,” says Hitesh. Likewise, Dhiraj has customised the product for its international consumers. “We have a large chunk of customers in the Middle East who like Indian jewellery and designs, so we specifically design pocket-friendly jewellery for them.”
Reaping profits with low investment
For those looking for a business proposition which doesn't make a hole in one's pocket, the industry of imitation jewellery is the best option. Expressions Jewellery has two business models, one in the kiosk format, which requires an investment of Rs 6-10 lakh, and the other is an EBO needing an investment of Rs 16-20 lakh. “We provide an extensive onsite training of seven days to the franchisee. This includes training for the franchise owner, store manager, sales staff, helpers and security. The purpose of the training is to maintain a healthy ambiance in the store and also the sales staff is trained and provided knowledge on up selling and cross selling,” says Hitesh.
Youshine will share its specialised expertise and knowledge of the market with the franchisees. Says Ashish Sood: “It is a cash positive business from day one, which makes it very attractive for potential franchisees. Youshine will provide assistance in all aspects of locating and setting up. This assistance includes demographics and onsite visits, necessary regulatory approvals and architectural setup.” Trenz Jewellery has two kinds of business models for its franchisees. Elaborating on the business models, Dhiraj says: “One business model is a dummy investor where the franchisee just invests and everything else is managed by the brand, while in the second format the franchisee himself manages the kiosk. We also provide complete training and support to our franchisees with one to two month's training.”
Youshine has a standard set of designs that can be customised to suit various modules of kiosk/EBO. The brand will provide in-depth training support and material, which will cover quality checks, accounting, reporting, point of sales, customer service standards, and a host of others. A detailed marketing plan will be designed to assist the franchisee in retaining and increasing customer base.
Gaps in the industry
The imitation jewellery and fashion accessory industry also has its share of challenges. Specifying the challenges present in the industry, Hitesh says: “The main challenge in this industry is to retain the skilled labour. We have somehow managed to overcome this problem, but the best way to remove this problem is to outsource your manufacturing to some extent.”
For Youshine one of the challenges was to obtain a good retail space. Says Ashish Sood: “Gaining good quality retail space at commercially viable rentals is a big challenge. Also, building a team as we roll out is a challenge. Finally, dealing with multiple tax laws at the state level is a major challenge we face today. We overcome these challenges by optimising space utilisation, hiring team members with an entrepreneurial mindset and outsourcing local operations.”
On the other hand Dhiraj feels that there is no dearth of skilled labour. He is also of the view that looking for an ideal space for one's outlet is no longer an issue; the major issue is that of the unorganised sector of imitation jewellery. “There are several small brands in the unorganised sector selling cheap jewellery, which attracts the attention of a major chunk of consumers,” says Dhiraj.
Expansion on cards
As the industry holds numerous opportunities, Expressions plans to expand by leaps and bounds. “We plan to have about 15 stores in metros and tier I cities of India in the coming four months and we also have a target of more than 25 stores for tier I and II cities in the next 24 months,” says Hitesh.
Youshine will launch its first EBO in Bangalore on December 1 this year, followed by an EBO in Mumbai on December 15. “We will expand to major Indian cities, such as Bangalore, Mumbai, Pune, Hyderabad, Chennai, Kolkata, etc., in the first phase, followed by tier II cities, such as Ahmedabad, Indore, Nagpur, Lucknow, Kanpur, etc., in the second phase,” says Ashish Sood.
Dhiraj believes that the kiosk format is the most suitable way of selling the product and plans to expand in North India, including Punjab, Haryana and Himachal Pradesh.
Investment Rs 6-10 lakh Rs 16-20 lakh
Area 60-100sq ft 250-350 sq ft
Break-even NA 1.5 years
ROI 45-50% 42%
No. of franchisees: One
Investment Rs 8-12 lakh
Area 30-200 sq ft
Break-even 1.8 years
ROI 25-35% per annum
No. of franchisees: None so far
Investment Rs 5-20 lakh
Area 150-200 sq ft
Break-even 12-24 months
No. of franchisees: 14