" I’ll tell you a riddle. You’re waiting for a train, a train that will take you far away. You know where you hope this train will take you, but you don’t know for sure. But it doesn’t matter.
How can it not matter to you where that train will take you?" (Mal, Inception)
There are quite a few Ts in Indian jewelry - Tanishq, Tara, Thangamayil, TBZ, etc., and most of them are currently riding three trains: increasing gold price with little change in average value purchased; increasing shift from unbranded to branded (with the Ts stealing market share); and the Indian consumer story (growing middle class, rising per capita income, increasing number of working women, etc.). Their situation is no different from what Mal said.
There is, unfortunately or fortunately, only one, which can be considered a brand (logo, ethics, high quality products, range of products for customers across the country, price, high quality customer service, etc.) - Tanishq. Rest others are copycats or freeriders and trying since they realized Tanishq cracked it major time. Most of them, are simple, commodity sellers.
I am not going to talk about the positives of TBZ here; this thread and many others are just too biased towards the “good things”, with little on the negatives, an important tool to separate the wheat from the chaff as Pat Dorsey said, and which seems the main theme of this forum.
)- TBZ - This Brand is Zero; why? The BrotherZ. There are three known (and maybe more) variants of TBZ, each owned by a member of Zaveri family, which have separated from each other on really bad terms. Just ask one of the sales executives in TBZ Nirmal Zaveri about the other two, and try the other combinations as well. They say quite a lot of things, and it might be difficult to find what is right or wrong, but at the end of the day, TBZ is a diluted brand, with multiple doors opened for negativity to creep in. This is the biggest turn off for me. The brothers, arms against arms vs. the brothers in arms in case of Thangamayil.
)- Customer service? I will rate them1/10on this one - this comes from personal experience at the most of the “brand” stores in Mumbai and rating them on various parameters, including customer service. Not only there is a significant difference between a Tanishq and TBZ, but there is a difference between TBZ, TBZ NZ and the TBZ at Mulund. Examples: showing/not showing the stock to a customer based on their understanding of whether or not a person can spend that amount; restlessness among the employees when customers take time to decide (to which their employees sometimes just say that “we dont have it”), etc.
)- If you want to buy designer wear, you will go to a designer and get something customized made for you…what has TBZ got to do with “great designs”? That to me is just selection/availability bias. There is no way you can look at a necklace and tell it is from TBZ. And btw, the lack of skilled designers and craftsmen is the biggest problem in terms of employees. You cannot manage 43 stores with limited set of designers and skilled people.
)- There is no differentiation between a TBZ or Gitanjali or Tara, by looking at their ads if you were to remove their names from the ads. What does it mean? Neither their products nor other soft aspects are strong enough to make them a brand. You wanna know what brand is? Check the products from Tanishq. Check products from a chinese company called Enzo. You can look at the products, logo, theme and other soft aspects and tell from which brand they are. TBZ is a far cry. If I would put across a portfolio of products or pictures of store interiors, most will not be able to tell which is what!
(2 days ago there was an article on ET, which had the following quote, "After all, as Kiran Dixit, group head for advertising & marketing at TBZ - The Original, points out: “Jewellers who are active on the marketing front have hardly done any differentiation.If you hide the logo of any jewellery ad, it’s very difficult to identify which jeweller’s advertisement you are looking at.”)
)- Then there is something called as making charges, which can make or break the deal for the most, as this is what provides them margins. Notice the comment, "Dixit of TBZ-The Original says: “Everyone in the market wants to attract more and more customers and enjoy maximum market share. This has resulted in intensive price wars in terms of giving discounts on making charges or selling at cutthroat prices.” The customer will not make the high making charges people used to pay earlier. 10-13.5% making for a quality product from a trustworthy brand that will assure quality returns as well upon resale, is maybe what most will be okay with. In case of TBZ and many others, its difficult for a customer to get reasonable value. Its a big put-off. At the end of the day, if you’re not a brand, and you are selling a commodity, then you should be treated as such, and not “a brand play”.
)- Say you could buy a rose plant that gives 10 roses everday for 450 rupees, from someone in a village. This plant is quite special - it will give 14 roses everyday next year, 20 roses everyday the next year, 26 roses everday the next, then 33 and then 40. The best thing is, after 5 years, you can sell it for 4000 and along the way you have collected the proceeds from selling someof the roses. Not bad, eh?
A friend of yours bought a similar rose plant from someone in Mumbai. It also gives 10 roses everyday. He bought it for 1200 rupees. This plant will give 13, 16, 20, 24 and 28 roses in the years to come. Along the way, your friend will have to spend more than you on the plant because he is living in Mumbai, an expensive city, where gardner, fertilizers and taking care make a big hole in the pocket. Then there could be drastic weather conditions as well. Who knows? Your friend’s rose plant might just not be able to deliver as your friend expected. As a result, he will be happy even if he is able to sell the rose plant for 2800 rupees. In fact, he is willing to let go of the sales proceeds in order to be able to sell the plant at 2800. (btw, there is hardly any difference in the quality of the roses from your plant as compared to roses from your friend’s plant. Its just that your friend sells the roses with red ribbon, plastic, etc.)
Who do you think is smart? Of course, you
Thats the comparison between Thangamayil and TBZ.
(there are equivalents of price, p/e, dividends, roe, multibagger returns, rent, salaries, diamond as higher margin business, mumbai based and oriented jewelry firms and town/village orientedjewelry firms, and risk in the example above, for those of you who are wondering what was it about?)
(the example becomes more interesting. Plants have feelings, dont they? So, the rose plants can decide if they want to grow or destroy themselves, by taking appropriate rational and emotional decisions. This gets better. The thinking ability and strength of the plants vary, and change with time, and depends on their ability to apply successful thinking.
That’s an equivalent of promoters)
( Oh, and for those who are thinking a 150 year old plant will have more worth than a 50 year old or 10 year old. Think harder. You only get paid via sale of roses (dividends) or sale of the plant itself (dependent on the number of roses it gives) (returns))
)- Oh btw, for those of you who think the company has an amazing website and online presence and what have you…try referring to a product code on the website to a sales executive and share your experience (in my case, none of the codes were recognized by the executives in various stores).