People increasingly buying quality, affordable fashion jewellery: Aditya, Co-founder, Gargi

Disposable income of people is reducing as most of the money is getting tied to EMIs, lifestyle expenses and others. That is the reason that people are not keen to buy jewellery, paying high price. Moreover, people prefer to spend on experiences like going on an overseas travel than investing on jewellery. Sensing such change in consumer behaviour, Gargi from the house of established jewellery brand PN Gadgil (PNG) has come up with fashionable jewellery items made up of silver and diamond. In a conversation with Buzz Buzz, Aditya Modak, Co-Founder, Gargi said that the company has jewellery items that is affordable for consumers. While most silver jewelleries are priced below Rs 3,000, diamond jewelleries are priced below Rs 50,000. He said that the company will expand its presence in online and offline routes. While it aims to have 25 per cent sales from online channels by 2027, it is planning to increase number of stores in the coming years. Modak also said that the company expects a turnover of Rs 100 crore by the end of this financial year

Can you provide a brief overview about the operations of Gargi by PNG?

Gargi started in 2021. The company started its operations in November, 2021 and it is predominantly into 925 sterling silver jewellery. Recently, we introduced natural diamond last year. These are the two main products that the company deals with. There are also fashion jewelleries for customers. Those buyers who want everyday jewellery, we also have gifting items.

What is the motivation behind launching Gargi? Do you supplement your parent jewellery brand PN Gadgil, which is already an established player in the gold jewellery space?

The main motivation behind launching Gargi from the PNG is due to the changing customer behaviour. The disposable income of people is declining because of EMIs, lifestyle spend and other factors. That is the reason that it is not viable for people to buy gold jewellery on a frequent basis. They need to have some jewellery with them for attending social events or going to parties or may be everyday work.

What we observed from our parent brand was that certain age group were not coming to buy jewellery because of these factors. That’s why we decided to start Gargi. Gargi is completely contemporary brand as we design our products as per changing tastes of people. We offer pocket-friendly jewellery. 80-85 per cent of our jewellery is less than Rs 3,000 under Gargi brands.

When you see diamond jewellery, 90 per cent of those jewelleries are below Rs 50,000. We are also ensuring the quality of the products. We try to be the best in terms of quality.

Will you enter into gold jewellery like your parent brand or will stay away from gold jewellery altogether for now?

Today, hallmarking is done for higher carat. Indian hallmarking can’t be done for 7 carat or 9 carat, which is very popular in Europe and the US. If hallmarking starts for 9 carat, then we may think of it. There are certain class of buyers, who want to invest in gold but they don’t have that kind of amount. Even if we enter into gold, our jewellery will be available within Rs 50,000. Why I am saying within Rs 50,000 is because, we are really competing with lifestyle expenses. If a person has Rs 5 lakh to spend, then he/she may go on overseas trip than buying jewellery. That is the kind of thing, people are preferring to have the experience over acquiring assets. So, the competition is intra-industry and customers are not willing to overpay for jewellery. Of course, we have 10 per cent of our product which are priced at Rs 1 lakh and above.

Is your brand predominantly targeting the young audience? Can you throw some light on the customer profile of Gargi?

Predominantly what we have observed that till the time, people understand about investments, they defer not to overspend on jewellery. This is people, who are usually in 18-35 age groups. Having said that even customer of middle ages is also buying our jewellery. But, we are a young brand and we are for people, who are young by heart.

How has been the response of customers so far to Gargi’s various products? Can you provide some perspective in this matter?

When we started Gargi, the basic turnover of the company was Rs 8 crore annually. In March 2024, we did Rs 50 crore turnover within less than 21 months. This financial year, we are eyeing a turnover of around Rs 100 crore. So, these results showed that customers acceptance is growing for our brand over the years.

As far as margin is concerned, these products are usually commanding higher margin as they are MRP-based items. But, plain gold is like currency because you can’t sell Rs 100 worth gold in more than Rs 100. So, for traditional jewellers, margin lies in making charged. But, ours are not gold jewellery and these brands usually command good margin. That’s why, we have 15-17 per cent margin on PAT basis.

What are marketing channels being tapped by Gargi as of now? Can you throw some light on your online channels?

Our marketing channel is a mix of online and offline routes. Online is merely 5-7 per cent of our total turnover. Our brands are sold in all PNG showrooms. We are also available at Shoppers Stop. Around 30 Shoppers Stops sell our jewellery brand. On the top of that, we have some franchises and a few own brand showrooms. We are in the process of increasing our own showrooms.

Out of five independent stores, two have already achieved breakeven and other three are in the process of achieving it. Usually, it takes 24 months of time to make a store breakeven. We intend to increase the number of independent stores to 10 by the end of this financial year. Post that, we will be opening around 10 stores per year. We believe in sustainable growth. That is the reason that we evaluate all sides before opening any store.

As far as ecommerce channels are concerned, we want to ensure that the contribution of online channels to be around 25 per cent by 2027. I think that omnichannel approach will be key to our growth.

What kind of utilisation has happened from Gargi’s recent fund raise? Can you throw some light into this aspect?

Predominantly, the funds raised recently are utilised for shop opening. There are certain products that will come up under the brand of Gargi. There are research and development (R&D), which are going on now and we may come up with some new product lines. Second is the offline stores that I talked about and the third is making Gargi a pan India brand for which we will do advertisement. We plan to expand our presence in north and southern regions of the country.