How Tanishq HACKED the GOLD Market of India : Titan & Tanishq (A TATA Product)  Business Case Study thumbnail

How Tanishq HACKED the GOLD Market of India : Titan & Tanishq (A TATA Product) Business Case Study

Hi everybody tanishq is one of the most incredible brands in the indian business history and like we saw in the titan episode in the past 20 years the stock price of its parent company titan has shot up by not 10 not 20 but 33 000 going from just 7.11 rupees to 2700 rupees and a mere 10 000 rupees invested in titan 20 years back would be worth a.

Minimum of 35 lakh rupees now although titan has a lot of brands under its canopy the jewelry division alone accounts for 75 percent of its total business and as of 2021 tanishq generated a net sales of 20 600 crores and today it is one of the biggest jewelry sellers in the country so the question is how did titan turn.

Tanish into such a huge brand what were the business strategies that enabled them to disrupt the orthodox gold market of india and most importantly what are the lessons that we need to learn from this case study this video is brought to you by wind wealth but more on this at the end of the video this is a story that dates back to late.

1980s by this time it had been four to five years since the titan brand had started and like we saw from the titan episode mr desa and his team had built an incredible company for the tatas in the tamil nadu government and now after cementing titan's position in india in the 1990s mr xerxes wanted to take titan to the european markets however this.

Proposition did not take off at all why because the european watch market was crowded at all levels at the lower end they had local brands in the middle they had japanese companies like seco and then at the top they had swiss brands so while sales of west asia and asia pacific were good the euro business was incurring losses and eventually that.

Division had to be shut down but you know what guys this is where suddenly titan decided to sell jewelry in europe now the question is why would a watch company suddenly start selling jewelry and that too in europe well that is because something crazy happened in the middle east during that time saddam had taken his gamble whether.

It was part of a plan to capture the world's oil supplies whether he would go marching on to saudi arabia america didn't wait to see iraq will not be permitted to annex the way that's not a threat just the way it's going to be the coalition took only a hundred hours to destroy the iraqi forces in kuwait.

In the hours before baghdad surrendered the oil wells of kuwait were set ablaze by saddam's retreating army kuwait which produced one and a half million barrels of oil a day before march of 1991 the united states had recently invaded iraq over saddam hussein's invasion of kuwait and in the build-up of invasion.

Iraq and kuwait had been producing a combined 4.3 million barrels of oil a day but when the war tensions started rising it led to the 1990s oil shock wherein the price of oil shot up from just 21 dollars per barrel at the end of july to 46 dollars per barrel in mid october and this put nations all across the world in deep deep trouble and in.

Case of india since india imported oil and paid for it in dollars or forex the high prices caused a significant burden on our forex resource by june 1991 india had less than one billion dollars of foreign reserves left which was just enough for three weeks of inputs this was a situation even after substantial borrowing from the imf so.

During this time any company that wanted forex had to generate it completely by themselves in simple words india said if you're a businessman who wants dollars don't come to india for exchange because we need to buy oil if you want to do any kind of import earn or borrow dollars from someone else and then spend it completely by yourself now in case of.

Titan they needed dollars to import their watch components so they started swelling jewelry with the goal that they would make and sell jewelry in europe earn forex then use the money to import watch competence then use those components to make more watches in india and then sell them all across the world but this is when liberalization came.

Into effect in india in 1991. as a result india's i.t companies like infosys and vipro started bringing an enormous amount of forex eventually the oil shop faded away and titan started focusing on the indian market under a different brand name this is how ladies and gentlemen through another jugado method another iconic.

Indian brand was born which we all know today as tanishq now the reason why mr desai and team pursue the jewelry market in india was because while visiting a jewelry exhibition at the taj hotel they made three important observations number one the indian household was extremely passionate about jewelry because it was an investment and not an expense.

And even an orthodox family did not mind spending tens of thousands of rupees into jewelry but secondly the jewellery designs in india were extremely mediocre and the purity of gold was quite questionable this was because impurity was a very good way for the local jewelers to expand their margins and make a ton of.

Profits and lastly in spite of having such an enormous demand and a customer lifetime value in lakhs the margins in gold were extremely high because of both appreciation in value and more importantly because of cheap labor this is what propelled titan to enter.

The jewelry business now by the look of it considering the fact that titan had the cash for the tatas and the expertise to get world class tech it looks as if it must have been easy to crack the jewelry market of india right well not really in fact tanish in the initial few years was a loss-making unit and at one point in time the condition.

Was so bad that they were in talks of selling it off and this happened because of two major reasons firstly the indian jewelry market was very very strongly established with the unorganized players why because the only dweller and indian family trusted were the local family dwellers i say local and family because.

If you ask your parents they'll tell you that even your grandparents and their siblings bought from the same dweller secondly back then 22 garrett gold was the de facto standard this is where you've got a product with ninety one point six percent gold and eight point five percent alloys but titan started out with 18 carat.

Jewelry this was because the 18 carat was studio would not get scratches easily and would give a firmer grip to the gems and stones this way they could focus on innovative designs with started jewelry but guess what in india back then and even today design was secondary proportion of gold was primary why.

Because gold for indians was an investment and not just a piece of jewelry so the weight of gold weight of diamond making charges appreciation value all of it mattered to the indian buyers and they didn't mind a simple design as long as it had more gold this is when mr xerxes and his team decided to introspect tanish very very.

Closely so immediately the pricing system was changed the price tags now display the gold and the gem details that explain the price of each product to the customers and overall the focus shifted from design to purity and value and this is when tanishq made a game changing investment into something called the carrot meter and this.

Investment completely changed titan's game forever to tell you about it like we discussed before most of the families in india trusted one family dweller who had been selling them gold and other jewels for 20 to 30 long years but at the same time tanishq understood that these dwellers were adulterating.

The products by a large extent and a common man can not actually differentiate these intricacies and this is also something that you cannot just tackle with marketing campaigns this is where the carrot meter came in carrot meter was an important machine from switzerland that actually used spectroscopy to measure the purity of.

Gold this machine was installed in all tanish outlets and after that titan launched a special campaign wherein they invited customers to walk in with any piece of jewelry and measure its purity for free now since gold was very very important to indians people actually flocked to these stores to check the purity of their ornaments that they had.

Actually bought from their family dweller out of blind trust and guess what majority of these people were shocked to discover that they had been cheated by their family dwellers for decades and this was because the gold was not as pure as the dwellers claimed and when lakhs of people felt betrayed or.

Dissatisfied with their jewelry titan deployed another strategy called the 1922 strategy and in this scheme women could bring in their gold jewelry test it in the carrot meter and if the purity of the jewelry was lower than 22 karat and higher than 19 karat it could be exchanged for tanish 22 carat jewelry of their choice.

By paying only the manufacturing charges and tanish could bear the cost of gold yes you heard that right tanish could bear the cost of gold this was titan's customer acquisition strategy now although it might look like titan was draining cash by paying for the gold what we miss out on is the fact that when it comes to jewelry the.

Customer lifetime value goes to lakhs of rupees and if done right just like local dwellers you could be looking at customers from three to four generations of the family as a result when this 1922 strategy was executed titan was very cleverly able to uproot the blind trust of the local dwellers and acquired lacks of customers.

From all across the country this is how tanishq laid the foundation to build its brand as a synonym of trust and purity and the result well by 2023 the jewelry division's operating income increased from 267.66 crores to 345 crores with profit before tax at 5.37 crores and this is where tanish rise as a blockbuster brand began because it.

Tackled one of the most important batteries of customer acquisition and that is barrier of trust this is when they further moved ahead to tackle the second barrier which was the barrier of cost after the carried meter strategy tanish found another gap in the market for expansion they realized that because of their branding efforts the.

Middle class indian family started to perceive tanishq as a brand that was too expensive for them and from the cost standpoint a middle class family that wanted to purchase gold could not shell out 6 to 7 lakhs at once but at the same time the desire to buy the set was there because after all it was an investment this is where tanishq launched the.

Famous gold harvest investment scheme to buy jewelry in this game if you wanted to buy a gold chain worth 2.4 lakhs and you didn't have that kind of money now you could actually deposit 20 000 rupees per month for 11 months with tanishq and then tanish would pay your 12th installment of 20 000 rupees at the end of the year you would have.

2.4 lakh rupees to buy your gold chain this is almost like an sip for gold and if you didn't want to buy gold after a year you could get the money back with the discount voucher for the additional amount this is how the barrier of cost was brought down as a result danish became more accessible to the middle class population of india and eventually.

They tackled yet another important barrier which was the barrier of cost and lastly what i personally love about these classic brands is that they often consider one factor that no other brand considers in order to identify intricate gaps in the market and this is the factor of empathy in this case tanishk actually observed that working women.

Didn't want to wear very ornate jewelry to work because it looked too flashy at the same time they wanted something affordable elegant and easy to wear so tanishq launched the miya collection that specifically addressed this segment of the audience and started their pricing from 3999 onwards then they also found that the richest people in the.

Society who had the purchasing power wanted to buy unique designs which would distinguish them from the crowd so they launched the zoya collection that starts from 70 000 rupees and goes all the way up to 70 lakh rupees then they also saw the digital wave rising so titan invested into carrot lane in 2016 which is an online jewellery company in fact.

Even today if you go out in the market and you try to examine the competitions of tanishq you will see that there are very very few brands that actually cater to so many categories of audience like executive ultra rich traditional minimalistic designer etc this is how tanishq evolved to become one of the largest valerie sellers in the country.

And this brings me to the most important part of the episode and that are the lessons on the case study before we move on i want to thank our partners windwell for supporting our content windwell is a platform by which you can invest in bonds of leading nbfcs and earn 9 to 11 returns this company is backed by zero does raid matter along with the angel.

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Disclosure even think school is an investor in wind wealth so if this sounds useful to you go ahead use the link in the description to start making safe investments with wind wealth moving on the first lesson that we need to learn is that there is a thin line between what you think your customers like and what they actually like so.

Always do your market research thoroughly before stepping into the market and the most powerful way to do that would be to study the data and then go and talk to people to understand the story behind the data the point we noted over here is talking to people is more important than analyzing data lesson number two sometimes you have to.

Make people aware of the problem before providing the solution in this case although people are buying impure gold the blind trust of the local dwellers needed to be broken in order to establish the informed trust by tanishq this is where titan's carrot meter came in handy and lastly always remember empathy is that superpower that can turn.

A commoner into a king in this case the constant market assessment done by tanishq team gave them million dollar assets in the form of mia and zoya collections so always remember keep updating yourself about what your customers need otherwise they won't need you tomorrow that's all from my side today guys if.

You learned something available please make sure to the like button in order to make youtube bubba happy and for more such insightful business and political case studies please subscribe to our channel thank you so much for watching i will see you in the next one bye bye

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