By Fakir Balaji, IANS
Bangalore : Malabar Gold, the flagship division of the Kerala-based Malabar group of companies, has set its sights on the Gulf region to promote and hard-sell its range of jewellery, diamonds and designer watches.
In the run up to opening its exclusive outlets in Doha (Qatar) Manama (Bahrain), Muscat (Oman), Abu Dhabi (UAE), Riyadh (Saudi Arabia) and Kuwait, the company’s overseas jewellery wing – Malabar Crystals and Diamonds, has set up an administrative office and wholesale division in Dubai last week to identify market locations and prepare the ground.
“We are in the process of selecting the locations to open our showrooms in Doha, Manama, Muscat and Kuwait over the next 12 months. A similar exercise is on in Saudi Arabia and the UAE,” Malabar Gold managing director Otamoochikkal Asher told IANS.
“Preliminary enquiries have revealed there is a great demand for Indian ethnic gold and diamond jewellery in the Gulf countries, thanks to the large presence of Indian expatriates, growing interest among the locals and influx of tourists from the world over,” he added.
To fund its foray into the Gulf market and expand its presence in India, the company has raised Rs.5 billion, partly from about 400 investors living or working in the Gulf region and high net-worth individuals (HNIs) in Kerala.
“We have adopted a semi-franchise model to finance our expansion plans in domestic and overseas markets. With gold remaining a sound instrument for investments and savings, several investors and HNIs, who have been our loyal customers for long, have come forward to fund our ventures,” Asher averred.
Though Malabar Gold will be a late entrant into the Gulf market, where leading Kerala-based gold firms such as Alukkas and Chemannurs already have a strong presence, Asher and chairman M.P. Ahmed are upbeat on their first overseas venture, thanks to the presence of around three million Indian expatriates, out of which about one-third are from Kerala.
“A profile study of customers visiting our outlets across the state has revealed that many of them are expatriates from the Gulf region on holiday or annual leave to be with their families,” said Ahmed.
“We have seen sales surging during the marriage season, festivals and special occasions when expatriates gift gold or diamonds to friends and relatives back home,” he added.
“As gold prices in the Gulf market are lower than in India, a majority of these expatriates want to buy our products in the Arab cities they are living or working in for a long time,” Ahmed pointed out.
The company has also seen sales coming from families receiving funds from their Gulf-based or Gulf-returned relatives and then investing in gold jewellery as savings.
Being popular in its home state and equally well-known in the southern cities of Bangalore, Hyderabad and Chennai, where the company has exclusive showrooms, Malabar Gold has a built a reputation for its quality, designs and service.
“We sell only Hallmark 916 gold and diamonds certified by the International Gemologicial Institute and platinum certified by the Platinum Guild International. We also offer one-year free insurance cover for gold jewellery against theft, burglary and fire, besides lifelong free maintenance and buy-back guarantee,” Ahmed noted.
Offering a range of products and designs in gold, diamond and platinum, the Malabar Gold collection includes those with traditional features from the four southern states and West Bengal and select varieties from Italy, Singapore and Bahrain for party and work wear.
Their bridal collection includes necklaces, bangles, bracelets, earrings, and rings, each highlighting the importance of the special occasion. The jewellery is bar-coded comprising details such as the weight of the gold, stone and gem and making charges.
The fine array of gold, platinum and diamond jewellery is crafted to sculptural quality by traditional craftsmen from Kolkata, Rajkot, Delhi, Mumbai, Coimbatore and Kerala.
The company currently runs 13 retail outlets across Kerala, two in Bangalore, one in Mangalore and one each in Chennai and Hyderabad. It plans to open 12 stores in 2008, including six in the Gulf and 18 showrooms in 2009 across India.
“Even as we foray into the Gulf region, we are scouting for key locations in the main cities of Karnataka, Tamil Nadu and Andhra Pradesh in the south, Mumbai and Ahmedabad in the west and Chandigarh and New Delhi in the north to expand our footprint.
The demand for the yellow metal has been spiralling due to increasing disposable incomes, changing lifestyles and as a security in a booming economy,” said Asher.
The flagship division, with a sales turnover of Rs.10 billion in the last fiscal (2006-07) has a diamond jewellery-setting unit in Bangalore. Its outlets also showcase international brands of premium watches such as Tissot, Espirit, Police, Citizen and Seiko.
The resurgence of gold and jewellery as a secure investment, status symbol and fashion statement has made India the largest consumer of the yellow metal in the world.
The World Gold Council (WGC) has estimated the consumption in India would cross the 1,000-tonne mark for the first time by this yearend, if prices remain steady and the current demand is sustained through the coming festival and wedding seasons.
According to WGC chief marketing officer Philip Olden, the projection is based on the consumption pattern over the last 2-3 years, which has grown over 50 percent annually.
“Gold consumption in India shot up by 70 percent to 528 tonnes in the first half (Jan-June) from 307 tonnes in the same period last year. Though a record 815 tonnes of gold was sold in 2005, it declined to 715 tonnes in 2006 due to price volatility,” Olden was quoted in the media last week.