Hard rock, Indian style

For the last 24 years, Ashok Jain, managing director of Swarn Gems Ltd, has been running a diamond wholesale business from Tokyo's Okachimachi jewellery district.

No surprise then that he's now investing in India's diamond retail market. And to enter the jewellery market, he's launched a unique jewellery retail format - Aastha. That is not all.

While Jain is targeting the upper middle class customers with Aastha, he has also set his sight on the Rs 1,500 crore (Rs 15 billion) branded jewellery market.

The plan is to open 12 exclusive outlets in Delhi by next year to retail the Nakshatra and Asmi diamond jewellery brands marketed by Diamond Trading Company in India.

Currently Jain runs only one exclusive Nakshatra store in Delhi which is expected to clock a turnover of Rs 6 crore (Rs 60 million) in the first year itself.

"We plan to set up exclusive Nakshatra stores in Agra, Jaipur, Kolkata and Mumbai. The reason for entering this segment is that the Indian market is clearly divided between made-to-order and branded jewellery," he says.

Jain should know because he has been in the diamond trading business for many years. In the past he has owned mining rights in Zaire besides running a polishing centre in Gujarat.

Armed with years of experience in the trade, Jain set up Aastha in Delhi earlier this year. He claims that the uniqueness of the store lies in the fact that it's a zero-inventory business where he makes jewellery only on order.

"I buy my diamonds only when I make ornaments for a customer," he says.

And so sure is Jain of his rock's value, that his company offers a full buy-back guarantee at the original price, within three months of the purchase of the product.

To take traditional jewellers head-on, Jain claims that he's made transparency the USP at Aastha. At traditional jewellery stores, secrecy has been the buzzword for profits to flow in.

"When consumers buy at such outlets, they're never sure of the quality of the products," he says.

At Aastha, he offers information on the price of the diamond while spelling out the cost on making, resetting, melting and repairing jewellery as well. He claims that the store keeps a seven per cent margin on the products sold.

Jain, who did his PhD in comparative economy between Indian and Japan from Tokyo University in 1969, wound up his mining business in Zaire after political turmoil gripped the country, followed by the closure of his diamond polishing centre.

But today he firmly believes that diamond retail has a future in India. "Diamond craze is moving from the metros to other cities. With the right pricing it won't be difficult to sell," he claims.