Founded in 1966 as a single company for cutting and polishing diamonds in Surat, the Gitanjali Group is a Rs 8,500-crore business today, with a presence in jewellery manufacturing and distribution, infrastructure, retail and lifestyle. Gitanjali Gems, market leaders in the $3.4-billion branded jewellery segment, contributes 40% to the revenues of the group. Mehul Choksi, CMD, Gitanjali Group, in an interview with FE?s Sohini Mitter, talks about challenges in the jewellery market, Gitanjali Gems? global ventures, expansion plans and its foray into e-retailing Excerpts:

How challenging is it to cater to multiple consumer bases across various countries?

Gitanjali Gems has operations in the UK, US, Middle East, Japan and China, besides being market leaders in India. The challenge is only limited to initial development and penetration in different geographies. Over the years, we?ve gathered consumer preferences and buying behaviour in these markets. The strategy remains to develop a new market through distribution routes and thereafter penetrate via franchises or own stores.

You are leaders in the diamond jewellery market. However, your gold business hasn?t been as flourishing. Why?

We lead the diamond market with a share of 35% to 40%. In the gold market, our presence is negligible. We launched two brands, Maya in 2005 and Shuddhi in 2009. Maya is a Rs 700-crore brand now and has done particularly well in South India. Gold is a very different market. In India, people treat gold as an investment, not perceived as a fashion accessory, whereas diamond products are present at the level of aspirational accessories. Both markets have to be addressed very differently.

What triggered your decision to foray into e-retailing? How do you plan to go about it?

E-retailing is new and helps to develop a sales channel for jewellery. India has the potential to not only become an e-retailing hub for domestic consumption but can be a true service-oriented destination for global demand. We?ve set up a centralised supply chain team dedicated to e-commerce for the operational part. We also have tie-ups to develop this business multi-fold. We want to create one of the largest jewellery portals in the next three years, giving access to Indian jewelery and supply chain efficiency to global consumers. An investment of about $100-$150 million has been made for our e-retailing venture, which we hope to launch by the end of FY11.

How have your string of global acquisitions furthered your business? Any such ventures in the pipeline?

We have these strategic acquisitions to gain access to the sales of largest jewellery markets as well as optimise manufacturing in domestic facilities. We are very pleased with the performance of all our acquisitions. Gaining topline from these markets as well as managing supply chain is a dual advantage with overseas chains. We?re looking at a potential Italian asset. We?ll be able to elaborate only after a final decision is taken.

What are your expansion plans?

We currently have 185 flagship, 215 franchise-run and 470 shop-in-shop stores across the country. By FY13, we plan to launch 200 more stores in various formats. We want to penetrate into Tier III towns, which have aspirational consumers with a purchasing power.

Global private equity firms are interested in acquiring stakes in your company. How will that impact your business?

There are some approaches on this topic. But no concrete decision has been taken on whether we want to divest any stake at this moment.