|Joyalukkas expands in Gulf, but US, UK plans delayed by downturn|
By Tom Wildhern
DUBAI, February 15, 2009 - The Joyalukkas Group, one of the world’s fastest growing jewellery retailers, is still expanding in the Gulf Arab countries, but has put its expansion plans for the U.S., UK and Singapore on hold due to the economic slowdown, its general manager says.
Joyalukkas, which mainly sells 22-carat gold and diamond jewellery, currently has 67 stores in several Gulf states and in India, as well as one shop on Green Street, a cluster of jewellers mainly serving the British Asian community in East London.
One of its Dubai stores, located in the Bur Dubai shopping district, has the largest floor space in the Middle East – 7,000 square feet dedicated to gold and diamond jewellery and a range of brands. Joyalukkas also has the largest jewellery store in the world, in Chennai, India.
Joy Alukkas, Chairman, Joyalukkas Group
General Manager Mr K. Venugopal, in a wide-ranging interview in his office near the Old Gold Souk in Dubai City, where Joyalukkas has five stores, said the group planned to expand to four stores in Saudi Arabia and to add two more to a total of three in Qatar by 2010.
The Joyalukkas Group also intends to add more stores in southern India.
But plans to open stores in New York or New Jersey, in the UK and in Singapore are delayed because of the severity of the economic downturn.
“We are taking a wait-and-see approach. Now, with the financial crisis, we are lying low,” Mr Venugopal said.
The Joyalukkas Group, owned by Mr Joy Alukkas, is focusing increasingly on B2B (business-to-business) projects and has already launched a variety of schemes to increase footfall to its stores.
B2B accounts for less than 10 percent of total revenues, but Mr Venugopal believes it is a growing priority with great potential for futures sales.
In one joint project with Cocoa Cola and McDonald’s during the 2008 Olympics, Coca Cola encouraged people to redeem ring pulls from cans of Coke in return for a gift of one gm of gold at a Joyalukkas store or a meal at McDonalds.
|Now, people can take stubs from flight tickets with Etihad, the United Arab Emirates’ national airline, and get a 10 percent discount on diamond jewellery when they visit a Joyalukkas store.|
Unilever gives vouchers to employees who achieve targets on sales of products such as Lipton tea. The vouchers can be cashed in at Joyalukkas stores.
Joyalukkas also promotes an incentive programme with dealers at French glass company Saint-Gobain enabling them to cash in vouchers towards jewellery purchases at Joyalukkas stores.
Joyalukkas is looking for opportunities for B2B projects to coincide with the 2012 London Olympics and has already met with leaders of the London Olympics organisation such as former athlete Sebastian Coe.
Joyalukkas wishes to raise its profile in the UK market by adding a store in a London district such as Wembley or Southall where there are already well-established British Asian communities with a taste for 22-carat gold jewellery – and increasingly, diamond jewellery.
Joyalukkas’s Green Street shop in London belongs to the Green Street Jewellers’ Association (GSJA), which is branding itself as a distinctive jewellery quarter before the 2012 Olympics.
In Britain, Joyalukkas’s contact for B2B projects is John Jacob, Marketing Manager (tel. 44-208-5862659, Email: firstname.lastname@example.org)
The Joyalukkas Group, which has 3,000 employees in total, mainly in India, has assigned 25 people on B2B projects full-time in Dubai, its global headquarters, and a further 25 people working in B2B in India.
“We are interested in the corporate gifting of gold,” Mr Venugopal said.
The Joyalukkas Group is also considering launching online jewellery sales, but no decisions have been taken yet.
However, the Group fully recognises the potential of online retail and marketing and will look at this area further.
DUBAI SHOPPING FESTIVAL
Sales at Joyalukkas’s stores in the Dubai Gold Souk area held up well during the month-long Dubai Shopping Festival up to February 15, with strong buying interest from Russians and other eastern Europeans, sales staff at Joyalukkas’s outlets told Jewellery Outlook during a tour of the Gold Souk.
“Russians like pearls and fancy designs and coloured stones, like blue topaz. Many Russians like Italian designs,” said James Joseph, a Joyalukkas salesman.
Joyalukkas stocks a number of Italian-designed jewellery in its stores, including brands such as Florentina, Miluna and Mist.
“Arab customers prefer big, coloured stones,” Joseph said.
Many people shop for jewellery in Dubai to take advantage of zero tax on purchases.
Sometimes large Indian families fly in to Dubai to shop for jewellery and other duty-free luxury items and save so much money by not having to paying any tax that they have effectively written off the cost of the entire trip, Mr Venugopal said.
Joyalukkas offered discounts on some of its own brands during the Dubai Shopping Festival – for example, a beautiful topaz ring on offer with a 35 percent discount for $1,624.
Indian tastes are now shifting towards diamond jewellery as the middle classes grow, and more professional Indian women are buying jewellery for themselves.
“Diamonds are becoming more popular in the middle class in India,” Mr Venugopal said, estimating that India’s middle income group now represents some 350 million people.
The Joyalukkas Group’s retail price points for its gold and diamond jewellery typically range from $2,000 to more than $100,000.
Joyalukkas also sells platinum jewellery which is slowly increasing sales as Indian customers, who traditionally prefer yellow gold, are now becoming increasingly accustomed to the white metal.
However, Mr Venugopal acknowledged that the recent surge of gold prices during the economic crisis had eroded platinum’s premium.
The Joyalukkas Group vigorously pursues corporate responsibility projects, taking the view that a successful company and its employees need to give back a share of their success to under-privileged members of society.
Many employees volunteer to give 0.5 dirham a day of their salaries towards micro-projects, such as supporting children with AIDS, helping handicapped people to work with donated sewing machines, and educational schemes.
The projects are overseen by Mr Joy Alukkas’s wife, Jolly Joy. “Our Chairman believes that is important to give something back to the society we live in, so that we enjoy what we earn,” Mr. Venugopal said.
“Our Chairman Mr Joy Alukkas says that whatever we collect, he will double it.”