PNG Jewellers bets on omni-channel strategy, franchise model for growth
today Aug 19, 2019
PNG Jewellers has come a long way from a small shop in Sangli to owning 30 stores across India. It is now hoping to tap into new customer segments across India with its innovative designs, collections, and promotional campaigns.
As part of its growth strategy, PNG Jewellers has announced its initial franchisee offering, a unique program through which it aims to strengthen its retail presence and plans to add 15 new franchise stores over the next two years.
PNG Jeweller is concerned that the recent hike on import duty on gold from 10-12.5% by the government is impacting sales and is hoping for some concrete steps by the government to boost jewellery purchases.
Saurabh Gadgil, chairman and managing director of PNG Jewellers, speaks to FashionNetwork.com about its journey, the USP of PNG and its growth strategy, and also shares his views on the import duty hike on gold.
FashionNetwork.com: Talk us through the journey of PNG Jewellers?
Saurabh Gadgil: PNG Jewellers began its journey 187 years ago and it continues to be on the path of excellence. The very proud legacy of PNG Jewellers began with a small shop in Sangli where the family used to sell gold. Carrying forward the vision of Gadgil family's doyen, Dajikaka Gadgil steered the business to Pune and expanded its horizon of success. With his hard work and persistent efforts, he steered the business to great heights that it has reached now.
FNW: What makes PNG Jewellers stand out from a host of other jewellers in the country and which jewellers do you consider as competition?
SG: Relationship and mutual trust between PNG Jewellers and its customers is what stands out and this has been carried forward for generations. The key to achieve this were the business morals and ethics. These have been passed on from generations in the family, and even today the group stands tall and proud based on the three pillars: trust, purity and commitment.
Other distinguishing factors are designs, collections and the kind of festivals and promotional campaigns we undertake for the benefit of our customers. Our innovations are enabling people to wear jewellery not only at functions but also day to day work. We consider Tanishq to be as our biggest competitor.
FNW: What is the expansion plan and growth strategy going forward?
SG: PNG Jewellers currently has 30 stores in India. Last year PNG Jewellers as a part of its growth strategy and expansion plans announced initial franchisee offering with two options under the— the franchise-owned company-operated (FOCO) model and the franchise-owned franchise-operated (FOFO) model. The idea is to convert existing interested standalone unbranded jewellery stores into PNG Jewellers stores under the FOFO model. PNG will invest in the makeover and the old existing jewellery at such stores will be melted and cast into new pieces. With expert training the look and experience will be the same as all PNG Stores. The strategy received overwhelming response and PNG Jewellers now has five franchisee stores two in Pune, one each at Dombivali and Vasai. In the next two years PNG Jewellers plans to reach 20 stores from existing five stores.
FNW: Which markets/channels contribute the most to PNG sales at the moment?
SG: Majority of our sales come from the Pune & Mumbai region.
FNW: What is the online strategy for the brand?
SG: The jewellery buying customer is evolving fast. The online presence of PNG Jewellers caters to all such customers. Strengthening of the online presence is an organic move towards providing an omni channel presence and 360-degree customer experience to our customers. Besides, the offline-online integration provides pan-India reach and taps into the much sought after new age customer.
The growth driver online is bullions followed by gold jewellery and closely backed by diamond jewellery category. Going forward, we are looking to strengthen the jewellery category and the sales trends are already moving in the desired direction.
FNW: Any plans to strengthen your presence in the overseas markets? If yes, which countries and by when?
SG: We have stores in UAE and the USA currently. With Indians now all across the globe there will always be opportunities to expand. Currently, we are concentrating on optimizing our growth in India and then strengthen our presence further internationally.
FNW: What are your take on the government’s recent hike of import duty on gold and has it had any impact on PNG’s business?
SG: The hike on import duty on Gold from 10% to 12.5% in this budget will negatively impact the gold industry. At a time when gold is at a six year high at 38,000-plus (rupees per 10 grams), mirroring the global trends and with the approaching season festival from August/ September, the Union Budget 2019 came at a crucial time for gems and jewellery industry. The industry which employs more than 50 lakh people and contributes 7-8% of GDP is still waiting for the much talked about comprehensive gold policy to be implemented. From 2% in 2012 to 10% now the import duty was levied to curb current account deficit which narrowed down to 2.5% of GDP in 2019. We expected the duty to be cut by 4-5 %. This would have helped eradicate grey market and help organized players. The Government needs to take some concrete steps quickly to boost jewellery purchases.
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