Titan Company’s jewellery division, comprising Tanishq, Zoya, Mia and CaratLane, continued to see strong sales momentum reflecting the strong market share gains during Q4 FY 2020-21 that ended 31st March, 2021. Despite the 70% loss in retail sales in Q1 due to lockdowns, the jewellery division has exceeded the retail sales of previous year on a full-year basis, the company noted.
Titan’s Q4 jewellery sales were bolstered by strong consumer demand in both metro and non-metro towns following the sharp decline in gold prices during the quarter. Titan said the final quarter also had a large business-to-business (B2B) order that contributed to about 10% of the growth in the period. Reported revenue growth for Q4 was around 70% year-on-year due to the low base of March 2020.
“Wedding jewellery has been a strong growth driver for the year and its share in overall jewellery revenue has increased meaningfully, compared to last year. The division’s hero market (increase market share of Tanishq) strategy, of making various local market specific interventions, has resulted in strong growth in Tamil Nadu market, which has traditionally been a stronghold of regional jewellers,” the company said.
Titan said jewellery ticket sizes have normalised compared to the initial period of the year after the lockdown, though it is still much better than year-ago levels. It said the number of buyers (invoices), has moved from near full recovery in Q3 to strong double-digit growth in Q4, leading to revenue gains. Consequently, the Gold Harvest Scheme (GHS) enrollments have also recorded strong double-digit growth, it added.
“However, the margin in Q4 is impacted on several accounts, including one-offs. Like every year, Q4 had a studded activation and even though it was well received by the customers, the studded ratio is lower than the previous year. The share of coins was higher compared to last year. These factors contribute to lower margins. An important contributor to lower margins in the quarter however is the reduction in Customs duty in February. As Customs duty was paid upfront at higher rates at the time of procurement of gold under the gold-on-lease route, and daily pricing of gold is based on duty as at the date of sale, the company had to absorb the loss to the extent of duty already paid at the higher rate,” Titan stated.
The division added 26 Tanishq stores on a net basis in FY ’21, with a retail space addition of about 123,000 sq ft.
Caratlane delivered a growth of 60% for Q4, continuing its strong growth trajectory. Despite the challenges at the start of the year, for the full year FY’21, the Caratlane B2C business grew at 26%. Shaya, the silver and alternate metals brand launched by Caratlane two years ago, grew by 136% during the year. The brand also significantly scaled up its international business delivering tenfold growth in FY21 compared to the previous year.
Titan said that 100% of fresh gold is now being sourced with LBMA certification, adding that the division remains committed to further strengthening its procurement processes towards ‘responsible sourcing’ with the significant use of recycled gold.
The division has introduced a new Tanishq Supplier Engagement Protocol (TSEP) for strengthening the ‘responsible sourcing’ process for diamonds.