How Tanishq HACKED the GOLD Market of India : Titan & Tanishq (A TATA Product) Business Case Study

Summary

The video script narrates the remarkable journey of Tanishq, a titan of the Indian jewelry market, from its inception to becoming a leading brand. It delves into the strategic moves that disrupted the traditional gold market, including the innovative Carrot Meter to ensure purity and the 1922 strategy to gain customer trust. The script also highlights the importance of market research, problem awareness, and empathy in product offerings, as Tanishq catered to diverse customer segments with collections like Mia and Zoya. Lessons learned from Tanishq's success emphasize thorough market understanding and the power of trust and customer-centric solutions.

Takeaways

• 📈 Titan Company's stock price has seen an incredible surge, increasing from 7.11 rupees to 2700 rupees over the past 20 years, largely due to the success of its jewelry division, Tanishq.
• 💎 Tanishq is the primary revenue driver for Titan, accounting for 75% of its total business, with net sales of 20,600 crores in 2021, making it one of India's largest jewelry sellers.
• 🌐 Titan initially struggled to penetrate the European watch market due to intense competition and eventually pivoted to selling jewelry in Europe to generate forex for importing watch components.
• 🔍 Mr. Desai and his team identified key opportunities in the Indian jewelry market, such as the passion for jewelry as an investment, mediocre designs, questionable gold purity, and high margins due to cheap labor.
• 🚀 Tanishq's entry into the jewelry market was initially challenging due to competition from unorganized local jewelers and the preference for 22-carat gold over the 18-carat jewelry Tanishq initially offered.
• 💡 The introduction of the 'Carrot Meter', a Swiss machine using spectroscopy to measure gold purity, allowed Tanishq to build trust by offering free purity checks and exposing the impurities in local jewelers' products.
• 🔄 The '1922 Strategy' allowed customers to exchange their impure gold jewelry for 22-carat Tanishq jewelry by only paying manufacturing charges, effectively acquiring new customers by addressing the trust barrier.
• 💰 Tanishq addressed the cost barrier by launching the 'Gold Harvest Investment Scheme', enabling customers to make monthly deposits towards the purchase of gold jewelry, making it more accessible to the middle class.
• 👩‍💼 The brand showed empathy by launching the 'Miya Collection' for working women who wanted affordable, elegant, and easy-to-wear jewelry, and the 'Zoya Collection' for the ultra-rich seeking unique, high-end designs.
• 🌐 Tanishq capitalized on the digital wave by investing in 'CaratLane', an online jewelry company, demonstrating an understanding of market trends and catering to diverse customer segments.
• 📚 The case study of Tanishq highlights the importance of market research, creating awareness of problems, and the power of empathy in building a successful brand that resonates with customers.

Q & A

What significant growth has Titan's stock price experienced in the past 20 years?

In the past 20 years, Titan's stock price has increased by 33,000%, going from 7.11 rupees to 2,700 rupees.

What percentage of Titan's total business does the jewelry division account for?

The jewelry division alone accounts for 75 percent of Titan's total business.

What was Tanishq's net sales in 2021?

As of 2021, Tanishq generated a net sales of 20,600 crores.

Why did Titan initially decide to sell jewelry in Europe?

Titan decided to sell jewelry in Europe to earn forex to import watch components due to the high demand for dollars to buy oil during the 1990s oil shock.

What was the impact of the 1990s oil shock on India's forex resources?

The 1990s oil shock led to a significant burden on India's forex resources, leaving the country with less than one billion dollars of foreign reserves by June 1991.

What was the initial challenge Tanishq faced in the Indian jewelry market?

Tanishq initially faced the challenge of competing with unorganized local family jewelers who had strong customer trust and loyalty.

What was the 'Carrot Meter' and how did it help Tanishq?

The 'Carrot Meter' was a machine from Switzerland that used spectroscopy to measure the purity of gold. It helped Tanishq establish trust by allowing customers to verify the purity of their jewelry for free, revealing the impurities in products from local jewelers.

What was the '1922 Strategy' and its purpose?

The '1922 Strategy' was a customer acquisition strategy where customers could exchange their impure gold jewelry for Tanishq's 22-carat jewelry by paying only the manufacturing charges, with Tanishq bearing the cost of gold.

How did Tanishq address the barrier of cost for middle-class families?

Tanishq launched the Gold Harvest Investment Scheme, allowing customers to deposit a fixed amount per month for 11 months, with Tanishq paying the 12th installment, making their products more accessible to the middle class.

What is the significance of the 'Miya' and 'Zoya' collections in Tanishq's strategy?

The 'Miya' collection addressed the needs of working women who wanted affordable, elegant, and easy-to-wear jewelry, while the 'Zoya' collection catered to the ultra-rich seeking unique, high-end designs.

What lessons can be learned from Tanishq's case study?

Lessons include the importance of thorough market research, making customers aware of problems before offering solutions, and the power of empathy in understanding and meeting customer needs.

Outlines

00:00

📈 Titan's Transformation into a Jewelry Giant

The script begins by highlighting the remarkable success of Titan Company, a subsidiary of the TATA Group, which saw its stock price surge from 7.11 rupees to 2700 rupees in 20 years. The company's jewelry division, Tanishq, has become a dominant player in India's jewelry market, accounting for 75% of Titan's total business and generating a net sales of 20,600 crores in 2021. The video aims to dissect the business strategies that led to this success, including the challenges faced and the innovative approaches taken to disrupt the traditional gold market in India.

05:02

🌐 Titan's International Expansion and the Birth of Tanishq

The narrative moves on to Titan's attempt to expand into the European market in the late 1980s, which faced stiff competition from local and Japanese watch brands, as well as Swiss luxury brands. The venture was not successful and had to be shut down. However, during the Gulf War, the oil crisis led to a significant increase in oil prices, impacting India's forex reserves. Titan, needing forex to import watch components, pivoted to selling jewelry in Europe to earn the necessary currency. The liberalization of India's economy in 1991 changed the landscape, allowing Titan to focus on the domestic market, leading to the birth of Tanishq.

10:03

💎 Disrupting the Indian Gold Market with Tanishq

The script details the strategic observations made by Mr. Xerxes Desai and his team at a jewelry exhibition, which led to the decision to enter the Indian jewelry market. They identified the Indian household's passion for jewelry as an investment, the mediocre designs, and questionable gold purity in the market. Despite Titan's financial backing and technological prowess, Tanishq initially struggled due to the entrenched unorganized players and the preference for 22-carat gold over the 18-carat jewelry Tanishq offered. The company adapted by focusing on transparency in pricing and purity, introducing the 'Carrot Meter' to measure gold purity, and launching the '1922 Strategy' to exchange lower purity gold for Tanishq's 22-carat jewelry, thereby earning the trust of Indian consumers.

🚀 Scaling Tanishq Through Innovative Strategies and Market Understanding

The final paragraph discusses the strategies that helped Tanishq overcome the barriers of trust and cost in the Indian market. The 'Gold Harvest Investment Scheme' allowed middle-class families to invest in gold over time, making it more accessible. Tanishq also addressed the needs of different customer segments with collections like 'Miya' for working women and 'Zoya' for the ultra-rich. The company's empathy-driven approach to understanding customer needs and its ability to adapt to market changes, such as the rise of digital platforms, contributed to its growth into one of the largest jewelry sellers in India. The video concludes with lessons learned from Tanishq's journey, emphasizing the importance of market research, problem awareness, and empathy in building a successful brand.

Keywords

💡Tanishq

Tanishq is a renowned jewelry brand in India, known for its high-quality products and innovative business strategies. It is a subsidiary of Titan Company Limited and has become synonymous with trust and purity in the Indian jewelry market. The brand's success is a central theme of the video, illustrating how it disrupted the traditional gold market with its strategies.

💡Titan Company Limited

Titan Company Limited is the parent company of Tanishq and is noted for its significant growth in stock price over the past 20 years, as mentioned in the script. The company's diversification into the jewelry market with Tanishq is a key narrative in the video, showcasing how it leveraged market opportunities and customer insights to build a successful brand.

💡Business Strategy

Business strategy refers to the methods and actions a company takes to achieve its goals. In the context of the video, Titan's business strategies for Tanishq, such as the Carrot Meter and the 1922 strategy, are highlighted as key factors in the brand's success, demonstrating how they addressed market challenges and consumer needs.

💡Market Disruption

Market disruption is a process where a new product or business model disrupts an existing market by offering a different value proposition. The video discusses how Tanishq disrupted the orthodox gold market in India by introducing purity certifications and innovative designs, challenging traditional jewelers and winning consumer trust.

💡Investment

In the video, investment is discussed in the context of both the financial growth of Titan and the consumer behavior towards jewelry. The script mentions how a small investment in Titan 20 years ago could yield substantial returns, and how Tanishq's Gold Harvest Investment Scheme allowed consumers to invest in jewelry over time, making it more accessible.

💡Purity

Purity, specifically in relation to gold, is a critical aspect of the jewelry industry. The video emphasizes how Tanishq addressed concerns about gold purity by introducing the Carrot Meter, a device that measures gold's purity and helped the brand establish trust with consumers who were wary of adulterated products from local jewelers.

💡Customer Lifetime Value

Customer lifetime value (CLV) is the amount of revenue a company can reasonably expect from a single customer over the duration of their relationship. The video uses the concept of CLV to explain Titan's strategy in the jewelry market, particularly how the company aimed to serve customers across multiple generations by building trust and offering high-quality products.

💡Liberalization

Economic liberalization refers to the relaxation of government controls on the economy, leading to freer markets. The script mentions the impact of liberalization in India in 1991, which allowed companies like Titan to shift their focus from foreign markets to the domestic market, where they could capitalize on the growing consumer base.

💡Gold Harvest Investment Scheme

This scheme was a strategic move by Tanishq to make jewelry more accessible to the middle class. The video explains how customers could make monthly deposits and have Tanishq pay the final installment, allowing them to 'harvest' the value of gold over time. This approach helped to overcome the barrier of high upfront costs for consumers.

💡Market Research

Market research is the process of gathering, analyzing, and interpreting information about a market. The video script highlights the importance of market research in understanding customer preferences and behaviors, as demonstrated by Tanishq's observations at a jewelry exhibition, which led to the development of products that met the needs of Indian consumers.

💡Empathy

Empathy in business refers to understanding and sharing the feelings of customers, which can lead to the creation of products or services that resonate with them. The video script points out how Tanishq's empathy towards different customer segments, such as working women and the ultra-rich, led to the creation of collections like MIA and ZOYA, catering to their specific needs and desires.

Highlights

Tanishq is a prominent brand in Indian business history with its parent company Titan's stock price increasing significantly over the past 20 years.

The jewelry division of Titan accounts for 75% of its total business, with Tanishq generating a net sales of 20,600 crores as of 2021.

Tanishq's success is attributed to strategic business moves that disrupted the traditional gold market in India.

Titan's initial attempt to expand into the European market was unsuccessful due to market saturation.

The 1990s oil shock led to a significant burden on India's forex resources, prompting Titan to venture into jewelry sales in Europe to earn forex.

Tanishq was born out of Titan's need to generate forex and later shifted focus to the Indian market following liberalization.

Tanishq's entry into the jewelry market was based on observations of the Indian household's passion for jewelry and the poor quality of existing designs.

Tanishq initially faced challenges due to strong competition from unorganized local jewelers and a focus on gold purity over design.

The introduction of the 'Carrot Meter', a purity-measuring device, helped Tanishq build trust by exposing the impurities in competitors' products.

The '1922 Strategy' allowed customers to exchange their impure gold jewelry for Tanishq's 22-carat jewelry, strengthening customer acquisition.

Tanishq addressed the barrier of cost by launching the Gold Harvest Investment Scheme, making jewelry more accessible to the middle class.

The brand's empathy towards its customers is evident in the creation of the MIA and ZOYA collections, catering to different segments of the audience.

Tanishq's digital expansion included investment in CarrotLane, an online jewelry company, to capitalize on the rising digital wave.

Lessons from Tanishq's success include the importance of thorough market research, making customers aware of problems, and the power of empathy in business.

Wind Wealth, the sponsor of the video, is a platform for investing in bonds of leading NBFCs with a simple investment process.

The video concludes with the significance of continuous market assessment and customer need updates for business sustainability.

Transcripts

hi everybody tanishq is one of the most

incredible brands in the indian business

history and like we saw in the titan

episode in the past 20 years the stock

price of its parent company titan has

shot up by not 10 not 20 but 33 000

going from just 7.11 rupees to 2700

rupees and a mere 10 000 rupees invested

in titan 20 years back would be worth a

minimum of 35 lakh rupees now although

titan has a lot of brands under its

canopy the jewelry division alone

accounts for 75 percent of its total

business and as of 2021 tanishq

generated a net sales of 20

600 crores and today it is one of the

biggest jewelry sellers in the country

so the question is how did titan turn

tanish into such a huge brand what were

the business strategies that enabled

them to disrupt the orthodox gold market

of india and most importantly what are

the lessons that we need to learn from

this case study this video is brought to

you by wind wealth but more on this at

the end of the video

this is a story that dates back to late

1980s by this time it had been four to

five years since the titan brand had

started and like we saw from the titan

episode mr desa and his team had built

an incredible company for the tatas in

the tamil nadu government and now after

cementing titan's position in india in

the 1990s mr xerxes wanted to take titan

to the european markets however this

proposition did not take off at all why

because the european watch market was

crowded at all levels at the lower end

they had local brands in the middle they

had japanese companies like seco and

then at the top they had swiss brands so

while sales of west asia and asia

pacific were good the euro business was

incurring losses and eventually that

division had to be shut down but you

know what guys this is where suddenly

titan decided to sell jewelry in europe

now the question is why would a watch

company suddenly start selling jewelry

and that too in europe

well that is because something crazy

happened in the middle east during that

time saddam had taken his gamble whether

it was part of a plan to capture the

world's oil supplies whether he would go

marching on to saudi arabia america

didn't wait to see iraq will not be

permitted to annex the way

that's not a threat

just the way it's going to be

the coalition took only a hundred hours

to destroy the iraqi forces in kuwait

in the hours before baghdad surrendered

the oil wells of kuwait were set ablaze

by saddam's retreating army kuwait which

produced one and a half million barrels

of oil a day before

march of 1991

the united states had recently invaded

iraq over saddam hussein's invasion of

kuwait and in the build-up of invasion

iraq and kuwait had been producing a

combined 4.3 million barrels of oil a

day but when the war tensions started

rising it led to the 1990s oil shock

wherein the price of oil shot up from

just 21 dollars per barrel at the end of

july to 46 dollars per barrel in mid

october and this put nations all across

the world in deep deep trouble and in

case of india since india imported oil

and paid for it in dollars or forex the

high prices caused a significant burden

on our forex resource by june 1991 india

had less than one billion dollars of

foreign reserves left which was just

enough for three weeks of inputs

this was a situation even after

substantial borrowing from the imf so

during this time any company that wanted

forex had to generate it completely by

themselves in simple words india said if

you're a businessman who wants dollars

don't come to india for exchange because

we need to buy oil if you want to do any

kind of import earn or borrow dollars

from someone else and then spend it

completely by yourself now in case of

titan they needed dollars to import

their watch components so they started

swelling jewelry with the goal that they

would make and sell jewelry in europe

earn forex then use the money to import

watch competence then use those

components to make more watches in india

and then sell them all across the world

but this is when liberalization came

into effect in india in 1991.

as a result india's i.t companies like

infosys and vipro started bringing an

enormous amount of forex eventually the

oil shop faded away and titan started

focusing on the indian market under a

different brand name

this is how ladies and gentlemen through

another jugado method another iconic

indian brand was born which we all know

today as tanishq now the reason why mr

desai and team pursue the jewelry market

in india was because while visiting a

jewelry exhibition at the taj hotel they

made three important observations number

one the indian household was extremely

passionate about jewelry because it was

an investment and not an expense

and even an orthodox family did not mind

spending tens of thousands of rupees

into jewelry

but secondly the jewellery designs in

india were extremely mediocre and the

purity of gold was quite questionable

this was because impurity was a very

good way for the local jewelers to

expand their margins and make a ton of

profits

and lastly in spite of having such an

enormous demand and a customer lifetime

value in lakhs

the margins in gold were extremely high

because of both appreciation in value

and more importantly because of cheap

labor

this is what propelled titan to enter

the jewelry business now by the look of

it considering the fact that titan had

the cash for the tatas and the expertise

to get world class tech it looks as if

it must have been easy to crack the

jewelry market of india right

well not really in fact tanish in the

initial few years was a loss-making unit

and at one point in time the condition

was so bad that they were in talks of

selling it off

and this happened because of two major

reasons firstly the indian jewelry

market was very very strongly

established with the unorganized players

why because the only dweller and indian

family trusted were the local family

dwellers i say local and family because

if you ask your parents they'll tell you

that even your grandparents and their

siblings bought from the same dweller

secondly back then 22 garrett gold was

the de facto standard this is where

you've got a product with ninety one

point six percent gold and eight point

five percent alloys

but titan started out with 18 carat

jewelry this was because the 18 carat

was studio would not get scratches

easily and would give a firmer grip to

the gems and stones this way they could

focus on innovative designs with started

jewelry

but guess what in india back then and

even today design was secondary

proportion of gold was primary why

because gold for indians was an

investment and not just a piece of

jewelry so the weight of gold weight of

diamond making charges appreciation

value all of it mattered to the indian

buyers and they didn't mind a simple

design as long as it had more gold

this is when mr xerxes and his team

decided to introspect tanish very very

closely so immediately the pricing

system was changed the price tags now

display the gold and the gem details

that explain the price of each product

to the customers and overall the focus

shifted from design to purity and value

and this is when tanishq made a game

changing investment into something

called the carrot meter and this

investment completely changed titan's

game forever

to tell you about it like we discussed

before most of the families in india

trusted one family dweller who had been

selling them gold and other jewels for

20 to 30 long years

but at the same time tanishq understood

that these dwellers were adulterating

the products by a large extent and a

common man can not actually

differentiate these intricacies and this

is also something that you cannot just

tackle with marketing campaigns

this is where the carrot meter came in

carrot meter was an important machine

from switzerland that actually used

spectroscopy to measure the purity of

gold this machine was installed in all

tanish outlets and after that titan

launched a special campaign wherein they

invited customers to walk in with any

piece of jewelry and measure its purity

for free now since gold was very very

important to indians people actually

flocked to these stores to check the

purity of their ornaments that they had

actually bought from their family

dweller out of blind trust and guess

what

majority of these people were shocked to

discover that they had been cheated by

their family dwellers for decades and

this was because the gold was not as

pure as the dwellers claimed and when

lakhs of people felt betrayed or

dissatisfied with their jewelry titan

deployed another strategy called the

1922 strategy

and in this scheme women could bring in

their gold jewelry test it in the carrot

meter and if the purity of the jewelry

was lower than 22 karat and higher than

19 karat it could be exchanged for

tanish 22 carat jewelry of their choice

by paying only the manufacturing charges

and tanish could bear the cost of gold

yes you heard that right tanish could

bear the cost of gold

this was titan's customer acquisition

strategy now although it might look like

titan was draining cash by paying for

the gold what we miss out on is the fact

that when it comes to jewelry the

customer lifetime value goes to lakhs of

rupees and if done right just like local

dwellers you could be looking at

customers from three to four generations

of the family

as a result when this 1922 strategy was

executed titan was very cleverly able to

uproot the blind trust of the local

dwellers and acquired lacks of customers

from all across the country this is how

tanishq laid the foundation to build its

brand as a synonym of trust and purity

and the result well by 2023 the jewelry

division's operating income increased

from 267.66 crores to 345 crores with

profit before tax at 5.37 crores and

this is where tanish rise as a

blockbuster brand began because it

tackled one of the most important

batteries of customer acquisition and

that is barrier of trust

this is when they further moved ahead to

tackle the second barrier which was the

barrier of cost after the carried meter

strategy tanish found another gap in the

market for expansion they realized that

because of their branding efforts the

middle class indian family started to

perceive tanishq as a brand that was too

expensive for them and from the cost

standpoint a middle class family that

wanted to purchase gold could not shell

out 6 to 7 lakhs at once but at the same

time the desire to buy the set was there

because after all it was an investment

this is where tanishq launched the

famous gold harvest investment scheme to

buy jewelry in this game if you wanted

to buy a gold chain worth 2.4 lakhs and

you didn't have that kind of money now

you could actually deposit 20 000 rupees

per month for 11 months with tanishq and

then tanish would pay your 12th

installment of 20 000 rupees

at the end of the year you would have

2.4 lakh rupees to buy your gold chain

this is almost like an sip for gold and

if you didn't want to buy gold after a

year you could get the money back with

the discount voucher for the additional

amount this is how the barrier of cost

was brought down as a result danish

became more accessible to the middle

class population of india and eventually

they tackled yet another important

barrier which was the barrier of cost

and lastly what i personally love about

these classic brands is that they often

consider one factor that no other brand

considers in order to identify intricate

gaps in the market and this is the

factor of empathy in this case tanishk

actually observed that working women

didn't want to wear very ornate jewelry

to work because it looked too flashy at

the same time they wanted something

affordable elegant and easy to wear so

tanishq launched the miya collection

that specifically addressed this segment

of the audience and started their

pricing from 3999 onwards then they also

found that the richest people in the

society who had the purchasing power

wanted to buy unique designs which would

distinguish them from the crowd so they

launched the zoya collection that starts

from 70 000 rupees and goes all the way

up to 70 lakh rupees then they also saw

the digital wave rising so titan

invested into carrot lane in 2016 which

is an online jewellery company in fact

even today if you go out in the market

and you try to examine the competitions

of tanishq you will see that there are

very very few brands that actually cater

to so many categories of audience like

executive ultra rich traditional

minimalistic designer etc this is how

tanishq evolved to become one of the

largest valerie sellers in the country

and this brings me to the most important

part of the episode and that are the

lessons on the case study before we move

on i want to thank our partners windwell

for supporting our content windwell is a

platform by which you can invest in

bonds of leading nbfcs and earn 9 to 11

returns this company is backed by zero

does raid matter along with the angel

investors like kunal shah praveen radha

who was the ex-ceo of paytm and others

the process of investment is very simple

all you have to do is go to assets on

the menu click on the asset which is

currently live and when you do that you

will see the asset page which has

detailed information about the asset on

the right hand side you can see a table

by which you can determine how many

units of the bond you want to buy and

then you can proceed ahead with the

payment you can pay via upi net banking

or even the wind wealth fund and that's

it you are done by investing in wind

wealth you can earn returns that are

higher than fds and at the same time not

as volatile as stocks for full

disclosure even think school is an

investor in wind wealth so if this

sounds useful to you go ahead use the

link in the description to start making

safe investments with wind wealth moving

on the first lesson that we need to

learn is that there is a thin line

between what you think your customers

like and what they actually like so

always do your market research

thoroughly before stepping into the

market and the most powerful way to do

that would be to study the data and then

go and talk to people to understand the

story behind the data the point we noted

over here is talking to people is more

important than analyzing data

lesson number two sometimes you have to

make people aware of the problem before

providing the solution in this case

although people are buying impure gold

the blind trust of the local dwellers

needed to be broken in order to

establish the informed trust by tanishq

this is where titan's carrot meter came

in handy and lastly always remember

empathy is that superpower that can turn

a commoner into a king in this case the

constant market assessment done by

tanishq team gave them million dollar

assets in the form of mia and zoya

collections so always remember keep

updating yourself about what your

customers need otherwise they won't need

you tomorrow

that's all from my side today guys if

you learned something available please

make sure to the like button in order to

make youtube bubba happy and for more

such insightful business and political

case studies please subscribe to our

channel thank you so much for watching i

will see you in the next one bye bye

[Music]