Comments the managing director of India’s Titan Company made on a recent analyst call about its second-quarter results left room for listeners to wonder whether the retailer would be venturing into the lab-grown diamond market.
Until now the company has always remained staunch in its stance that its customers prefer natural and that it goes to great efforts to make sure its entire supply chain is 100% mined. So when an analyst asked what was stopping Titan from moving into lab-grown, managing director C.K. Venkataraman gave a surprising answer.
“Why do you think anything is stopping us from getting into [lab-grown]? We have not yet launched,” he noted.
While this response did not explicitly state the company was moving into the lab-grown sphere, “not yet launched” could be understood as meaning it hasn’t happened yet, but there is talk of it for the future.
Another analyst went on to ask if the company did move into lab-grown, which banner would carry it: Would Titan consider the product for its high-value Tanishq brand or for its mid-level CaratLane stores?
“We wouldn’t like to share anything about our strategy, whatever that is, when it is going to be on this,” Venkataraman said. “If you really think about it, it is a matter of strategy that you are asking us to reveal before we actually launch anything like that.”
The questions on synthetics came after another Titan Company group, big-box lifestyle fashion retailer Trent, announced a lab-grown jewelry pilot. However, Trent is not one of the company’s dedicated jewelry brands, and it functions independently from those. The comment also follow a partnership between De Beers and Titan’s Tanishq brand to promote natural diamonds in India though marketing, education and consumer outreach.
When Rapaport News asked directly whether Titan would be introducing a lab-grown line, Ajoy Chawla, CEO of the company’s jewelry division, didn’t unequivocally rule it out. It was also unclear whether a potential launch would occur under one of its current jewelry brands or by creating a new one, as Hong Kong-based jeweler Chow Tai Fook did.
“The jewelry division of Titan continues to be a strong believer in natural diamonds and is heavily invested in it across all its brands,” he noted. “This is also evidenced by our long-term tie-up with De Beers to promote Tanishq natural diamonds in India. A lot of work has also gone into the value chain over the last five years to ensure 100% pipeline integrity and hence zero contamination of our value chain between lab-grown diamonds and naturals.”
The company views synthetics as more of an accessory than a high-value jewel, Chawla continued.
“At this point in time, we feel the lab-grown segment may eventually emerge as a distinct and separate segment of use cases, perhaps fashion or accessories, perhaps affordable adornment; in other product categories as embellishments, like watches, etc.,” he explained. “It may have its own place in the spectrum of adornment in as much as cubic zirconia jewelry, silver, non-precious, and perhaps demi-fine categories. Many fashion brands have also jumped in and many more could come over time. We will continue to watch this space with great interest, given its adjacency to our category.”
Other revelations
Titan also noted that while jewelry bearing solitaire diamonds weighing 1 carat and above had been under pressure due to “price uncertainties” in the market, sales of studded jewelry with smaller stones were “quite healthy.”
Demand for wedding jewelry has also picked up following the Indian government’s July reduction in import duty on gold products from 15% to 6%, the company said.
“There were many fence-sitters, which impacted first quarter, who were waiting,” said Chowla. “Once gold prices corrected, many people came in [to buy].”
The comments came as Titan reported a 13% year-on-year increase in revenue to INR 133.42 billion ($1.58 billion) for the second fiscal quarter that ended September 30, including subsidiaries. Jewelry sales rose 13% to INR 116.47 billion ($1.38 billion). Group profit fell 25% to INR 7.05 billion ($83.6 million).
Image: A Tanishq store in Pune, India. (Shutterstock)
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