Midas Touch

Vummidi Amarendra believes he and his younger brother, Jithendra, had started hearing about jewellery right from the time they were in their mother’s womb. After 20 years, while handing over the reins of Vummidi Bangaru Jewellers (VBJ) in 1991, their father Vummidi Raghunath asked Amarendra to take care of only one thing — that the good name built by their forefathers over a century be maintained. 

VBJ is a 118-year-old legacy. From the jewellery box of the ancestors that brought in big sales during auspicious days, the business has gone on to become an heirloom jewellery brand that draws interest from across the seas. Till recently, all three of its showrooms were based out of Madras (now Chennai). But the fourth generation, which includes Amarendra and Jithendra, has their eyes set on expansion and more. 

Humble beginning

The story of VBJ’s growth runs parallel to the evolution of Chennai’s retail markets. However, it’s not in Chennai where the tale begins. It can be traced back to the fag end of the 1800s when the Madras Presidency was slowly gaining prominence. In a small village named Gudiyatham near the Andhra Pradesh-Tamil Nadu border, the Vummidis were the go-to people for ear and nose piercing during the village temple festival. It was then that Vummidi Bangaru Chetty, the first generation of VBJ, sensed an opportunity and moved to the city. At the turn of the century, he started his shop in Madras and, eventually, the whole family moved there. The front portion of their house doubled as the first shop. And then there was no looking back. 

The business picked up and they opened their first shop in George Town, a buzzing area at that time. As years passed, they opened their second shop in T Nagar (the first jewellery shop in the area) as it evolved into the city’s shopping destination. Once Chennai started gaining its cosmopolitan complexion and saw the opening of its first mall — Spencers Plaza — VBJ opened their third showroom inside the mall compound. “They were able to identify opportunities and markets. All of them turned out to be fantastic. The George Town store still stands and is famously known as the corner store although now it belongs to different people after the family partition,” says Amarendra.

The business was passed on through generations but they were all clear about one thing — they had to be sure about the product they were offering. Manufacturing in-house was the key to this. “Today we have hallmarking and testing facilities, but back then, hardly anything of that sort was there. The forefathers were convinced that they had to know what was inside the product they were giving a guarantee for. They had a diamond cutting factory, a silversmith factory, a gold jewellery manufacturing unit — almost everything,” says Amarendra. 

As years passed, the company did away with a few things including the diamond-cutting machine, but left the core feature of manufacturing in-house untouched. With almost all its products designed and manufactured in-house, VBJ was the first jewellery company to position themselves as ‘manufacturing jewellers’. 

Many jewellers followed a trading model given the ease and convenience it offered. That, however, meant it left the jeweller with lesser space to offer guarantee. The Vummidi brothers, both of whom are certified gemologists from Belgium, therefore followed the traditional path of their ancestors when they took over the business. “We didn’t go up to the extent of cutting diamonds like our great grandfathers did, but we designed the jewellery, bought loose diamonds and graded them. Only the top quality goes into the jewellery,” Amarendra explains. 

However this meant that the company’s pace was slow. While newer jewellers such as PC Jeweller, Kalyan Jewellers and Joyalukkas have expanded fast, legacy brands such as VBJ have been only warming up to the concept. Traditional jewellers such as C Krishniah Chetty Group of Jewellers and Thangamayil Jewellery have kept themselves to Bengaluru and Tamil Nadu respectively. Some, like Tribhovandas Bhimji Zaveri (TBZ), have adopted a franchise route for a part of their expansion across India. Bhima Jewellers from Kerala, however, has a few stores in the Middle East, owing to the large Malayali population in the region. 

VBJ could not supply to multiple stores, owing to its in-house manufacturing. The number of stores could only be in tune with what the factory could produce, unlike the trading model where one could buy, stock up and sell. Amarendra acknowledges this, but is resolute: “Unless my factories grow, my showrooms can’t grow. Even if I have to increase 15% of the current manufacturing capacity, a lot of planning has to go in. However, we are not ready to change from this model and mission statements, so our growth will have to be organic and it will be slow,” he says.

The jeweller also stayed away from private investors. “We had actually thought of that route but we came back. When you are manufacturing and selling it, your cost of production will be higher than when getting it outsourced. But the confidence and peace of mind you get is intangible. I cannot explain that to the investor. I can’t tell him it’s bad to outsource because the numbers would speak otherwise,” Amarendra says.

The resolve has not gone in vain. VBJ boasts of customers who have, for years, been trusting the jeweller alone to buy their ornaments. Amarendra talks about NRI customers who, while coming to India, come to Chennai first and buy jewellery from VBJ. He says, “Earlier, Chennai was the only international airport in the south. But even after airports have come up in many cities, people still land in Chennai, buy from us and then leave for their home towns. That gives us a sense of responsibility and pleasure, in knowing that we have been able to keep up the trust.”

Redesigning the workplace

Over generations, the peripheral factors also changed. Eager to be the early adopters of technology, during early ’70s, the company bought a computer that almost took up an entire room. “It didn’t do much, but they were excited to have a computer,” Amarendra laughs. Jokes apart, he notes that the company has been investing in technology with a strong belief that it would be the next big thing in propelling business and revenue. 

VBJ’s factories — all four of them — are today of international standards, equipped with the latest technologies such as 3D printing and laser solderings. The goldmith has shed his seated down aachaari avtar and has adapted to a desk job. This was not easy for many who followed the conventional way of working. 

“When you tell someone who has always been sitting on the floor to work to move to a chair — no matter how ergonomic the proposal — it is difficult. For him, some things are better done sitting on the floor, for example, using his toes to hold and pull things. We had to convince an entire generation to adopt new ways which meet ideal working standards. Today, our factories have reached that goal,” says Amarendra, beaming.

Two in Chennai, one in Coimbatore and one in Mumbai, the factories have been set up with an investment of Rs.60 million each. While the company initially had three factories in Mumbai, two of them were later shifted to Chennai to have better control over operations and to stop leakage of designs. 

Anupam Karmakar, head of design at VBJ, who reaches office at 8 a.m. along with his team, believes it’s best to start early for creative ideas. “We travel a lot and it helps us understand more about designs, trends and draw inspiration from different parts of the world.” Out of the four collections which VBJ launched till date, two — Kirigami and Persiana — have international references. While the former is inspired by the paper folding and cutting art practised in Japan, the latter, as the name suggests, draws its style from the Persian architecture and colour schemes. “The designs are unique to VBJ,” says Karmakar.

The generational change at VBJ was not only on the promoter side, but also on the hired talent side. The company saw a serious shortage of skilled jewellers and this meant a threat to product quality and a hindrance to any expansion plans. So the brothers decided to start a small curriculum for training hired people. 

A year ago, they started hiring young men who were interested in art and provided them with a six-months training course that included computer basics, English language, designing and CAD. Each batch comprises 10 new recruits. Currently, the second batch is being trained. 

Stepping out

Apart from upholding the legacy of the family, his father’s advice to Amarendra was not to attempt anything drastic. Amarendra and his brother, however, were not ready to stop with what the ancestors set up and were keen to make their mark. Digital being the talk of the town, they felt it could be the next big thing in retail.

So in 2014, Amarendra set up Zaamor, an online portal for diamond jewellery. The company did have an online presence since 2004, but at a very modest level. Zaamor was a full-fledged portal with return policies and payment gateways. According to Amarendra, it has the largest collection of solitaire diamonds, with $1.6-billion worth excess inventory than the next two online players put together. 

Online sales currently contribute only a small portion of the business and Amarendra concedes that it will take a long time for Indians to switch to online jewellery. However, in the case of solitaires, he feels, there has been a considerable shift from offline to online. He also feels the online channel helps the company reach out to customers overseas. While they haven’t started shipping abroad yet, he claims to receive several requests from NRIs who feel VBJ is a better option in terms of designs and price compared to what is available abroad. “We see a big opportunity there, and we are considering it,” he says.

The company has taken baby steps into the international market already. Sensing good demand from foreigners as well as NRIs, VBJ is now planning to set base in the US and Singapore. Receiving positive response from the four exhibitions in the US, VBJ has set up a small office in the country to start transactions and is planning to open its showroom by 2019. On asked about the rationale behind choosing the markets, he says, “There is good demand. Plus, since we make the jewellery ourselves, we want to sell them to people who appreciate it rather than to those who are seeking cheaper buys. The process of doing this isn’t cheap. People who understand this are willing to pay for it and that’s what we are looking for. The US is one such market. Singapore is also similar.” The jeweller that has been adorning deities of several temples in India over years has, recently, crafted jewellery for some temples in the US too. 

“We approached many jewellers in India to know if they could customise jewellery. And since most of the people who visit our temple are from India, we also asked them for their suggestion and they suggested Vummidi Bangaru Jewellers unanimously,” says Ravi Nallakrishnan, temple trustee, Sri Venkateswara Swami Temple, Aurora, USA. Once the order was placed, VBJ completed the work in about six months. “The designing process was very complicated as it was meant for carved sculptures and life-size deities. We were surprised by the dedication that the artisans had for their work. They ensured that the armour, which had diamonds set on gold, fit the sculpture perfectly. The glory of the temple has been enhanced immensely with their magnificent ornaments. The layers of gold were beautifully handcrafted to bring out the regal look of the deity,” says Nallakrishnan.

Closing at a little less than Rs.10 billion in FY18, VBJ expects further growth in its designer jewellery collections such as Dalia, Kirigami, Persiana and Navaratna. The company also has plans to promote the same overseas rather than generic jewellery. 

The company’s focus has been changing with the changing times. While on the one hand, millennials have been shunning heavy jewellery, on the other hand, the share of jewellery in wedding expenses has been increasing. “More money is being spent on weddings, with south Indian brides aspiring to have grand weddings like their north Indian counterparts. Our designers, thus, sit and talk to the brides to meet their expectations. We even ask them to come and try it on when the jewellery is not fully ready,” Amarendra says.

The company is also making an effort to understand and meet the expectations of millennials. Amarendra notes that the young generation is looking for light weight ‘wearable’ jewellery that is durable and convenient to put on and take off. “That’s why we are constantly investing in technology to give them a better finish in light weight jewellery, locking system and flexibility,” he says. 

Every year, 15% of the budget is allocated for ‘new developments’ — which could be setting up an institute, a new line of jewellery and so on. The young hands have more innovative ideas such as connecting small diamond jewellers across the US and helping them source cut and polished diamonds of exact specifications from India at better rates. Over the next two years, VBJ plans to spend around Rs.2 billion-3 billion for new showrooms in newer markets.

VBJ was one of the 19 Indian jewellers to collaborate with Forevermark, the diamond brand from the De Beers Group, to create a red carpet collection that was on private display during the 90^th Academy Awards on March 4, 2018. “VBJ and Forevermark share a mutual passion for diamonds and understand the intricacies of craftsmanship. They have a great understanding of the southern market and its requirements. Their focus on sustainable practices and future-ready retail operations set them apart from other jewellers,” says Sachin Jain, president, Forevermark India.

Going forward, the market is flush with opportunities. The implementation of GST has helped the organised segment that earlier faced a threat from the non-tax paying unorganised players armed with better pricing power. But on the flip side, challenges too are looming. The biggest of them, according to Amarendra, is the mixing of synthetics with natural diamonds. Such practices can make the customer turn away not just from the jeweller, but from the entire industry, he fears. Apart from getting their diamonds and stones checked by GIA, VBJ has now imported a Rs.4-million machine to test the authenticity of diamonds that are already set on the jewellery. 

Other challenges include competition and price wars. While Amarendra says that competition has always been there, advertisements that focuses on price points take the industry backwards. “When it happens, you cannot give too many offerings. You have to reduce your design capability and opt for mass production with mild variation. You can’t make something which is really different and offer it for a low price. This was a major challenge we faced,” he says. 

While the company overcame the pressure by deciding to mass produce a few items in-house, Amarendra sees the next challenge rising from within, in terms of enticing the next generation to this business. He fears that it might scare them away if the business looks too tough and complex. “We have been bringing processes into our own businesses — SOPs are set and reporting lines have been made clearer so that management is easier,” says Amarendra hoping that the legacy lives on.