T. S. Kalyanaraman – Newly Minted Billionaire
January 24, 2013 Leave a comment
As per Bloomberg’s calculation T. S. Kalyanaraman ,Chairman and Managing Director of Kalyan Jewellers, the largest jewellery chain in India, is now a billionaire.This is his response to the news:“I don’t calculate my net worth.I am more keen to trade, develop my brand, but you may be right.”
Here is his story in his own words:
“My family has been in business for the last 110 years. It was my grandfather, T. S. Kalyanaramaiyer who first moved away from priesthood and became a businessman.He moved from Kumbakonam to Thrissur to start a textile mill. I think it was in the 1930s that the mill was taken over by the government and that was when he decided to start a textile shop.Later, my father Seetharamaiyer joined him followed by myself and my four brothers. Now, my sons also have joined the business.
Even when we were in school, my father used to take us to the shop during the vacation. That was our first initiation into business. I would say, from that time, business became a part of our system itself.As I was the eldest son, I was taken to the store first. When I was 12, my father made me take cash from customers. My father watched as I collected cash from customers. If I made any mistake in calculating, he would correct me.I was not forced to join the business. I was interested and excited to be a part of the business activities.I must also admit that I looked forward to being taken to a hotel for a masala dosa after the day’s work.
As we did the transactions, my father also advised us on all aspects of business like purchase, accounting, etc.He used to tell us that we must stock what the customers wanted the most. He was of the opinion that we should never buy what we liked but only what the customers liked.He was also very particular about the quality of the goods we sold. He was totally against cheating customers.He also advised us on how to behave with the customers. He used to say all the time that the customer is the king and if he doesn’t come to the store, we are nobody.He said, less margin and more turnover would give more profit. So, we grew up listening to even the smallest piece of advice from my father.Till today, I am following what my father told us, and he had learnt all that from his father. Now, I have passed these guidelines to my sons also.
My apprenticeship continued till I completed my graduation in commerce.In 1972, after my B.Com from Sree Kerala Varma College, I was given the charge of Kalyan Textiles. The stock capacity was around Rs 15 lakh and turnover was around Rs 25 lakh then.It was a thrilling experience to be on my own, going to Mumbai to purchase textile materials from there.My grandfather’s name was Kalyan and it is my good fortune that I inherited his name being the eldest grandson. Though I was in charge of the shop, every evening, my father used to come and check the purchases and sales.By the end of first year, the turnover was Rs 30 lakh. My father used to encourage me a lot. After we saw good turnover, my father realised that I would be a good businessman.
My strategy was to increase stocks and appoint people to take care of customers individually.I had instructed my staff to behave cordially with all customers, and that made a lot of difference. I wanted everyone to come again and people loved coming to our store.Every year our turnover increased. So I kept investing more on new stock. I have nostalgic memories of the shop and even today, I go there at least once a week.
In 1991, my father partitioned the businesses among five sons. We had a turnover of Rs 1.5 crore from textiles at that time.In 1993, I decided to start a jewellery shop, named it Kalyan jewellers. The reason behind starting a jewellery shop was, many customers used to ask us why we have not started a jewellery shop.They felt if we had a jewellery store, they could buy saris and jewellery for the wedding from the same place. That was because we had the trust of our customers. I would say the inspiration behind Kalyan Jewellers was our customers. The capital was Rs 50 lakh from my side and another Rs 25 lakh as loan from a bank. So, the overall investment was Rs 75 lakh.
In those days, all the jewellery shops in Kerala were small. So, I decided to opne a huge store like the textile showrooms we had started.Also, there was not enough stock in any of the shops. What they did was, show a design and then customise it for the buyer in a month’s time.I wanted customers to have all kinds of jewellery to choose from, and they should go back with whatever they wanted. Our store had an area of 4000 sq.ft fully air-conditioned with ample sitting capacity, clean toilets and enough space for car parking.I had seen such shops outside India and I wanted to give the same experience to Indian customers too. Kalyan Jewellers has the distinction of having the largest jewellery showroom in South India. I wanted my customers to have a pleasurable experience in our showroom. And they did appreciate our efforts.In the first year, our turnover was around Rs 50-60 crore (Rs 500- 600 million). We added silver, diamonds and traditional jewellery to our collection, the following year. Customers from nearby towns like Palakkad, Kozhikode, Kochi etc. started coming to our showroom in Thrissur.
In 1995, my eldest son Rajesh Kalyanaraman joined the business after completing MBA. We then planned to expand the business. We started a showroom in Palakkad, our first one outside Thrissur. At that time, our turnover was around Rs 75-80 crore (Rs 750-800 million). In 1997, my second son Ramesh Kalyanaraman also joined us. In 2000, we opened our fourth showroom in Coimbatore in Tamil Nadu.Today, we have 31 showrooms; 8 in Kerala, 14 in Tamil Nadu, 4 each in Karnataka and Andhra Pradesh and one in Pondicherry. We have about 4000 employees now. My eldest son is in charge of purchasing and accounts and the youngest one takes care of sales and marketing, and I have the overall supervision.We make use of technology a lot and are in touch with all the shops through video conferencing.
The designs preferred by customers vary from state to state. The preferences of the people of Andhra Pradesh are totally different from Kerala. Even in Kerala, you will see that the tastes of the people of Thrissur are different from those of Trivandrum. So we have a database of the sales of all the items in each shop, to figure out customers’ preferences.Before we open a shop, we do detailed surveys of the area to find the likes and dislikes of each region.Traditional designs of each region differ. For example, dasavatharam, manga mala, mullappoo mala are some of the traditional designs of Kerala, which will not be bought by the people of other states.
The decision to buy the Rs 30 crore (Rs 300 million), seven-seater (including two pilots’ seats) Phenom 100 executive Embraer jet, was a well thought out one. It was only done to save time because time is money; nothing connected with luxury.Our stores and the new ones we plan to open are spread across very small towns where there are airports but there are no frequent flights. For just a one- or two-hour job, I would spend one-and-a-half days because I would go there and come back only the next day.You never know if the next flight will take off or land in time. Not to speak of the cancellations which are becoming the order of the day.The private jet not only allows me to save on the reporting time and associated rigours but also ensures coverage four or five branches in South India in a matter of 10 to 12 hours. Normally this would take me four to five days.We have 31 showrooms now and will have 50 soon.It takes a lot of time to go from one to another to check quality, supervise the purchase and also go through the designs and meet the customers.We feel that our top-level management and directors must have more flexible itineraries to save on transit times to help us achieve the growth plans and also ensure effective monitoring of business.That is why we decided to buy a private jet and by doing so, we became the first business house in Kerala to do so.
We are the only jewellers to have a Rate Tag. Now, our customers can compare the rate with the others. The rate of the gold per gram varies everyday. The making charge varies from 4 to 20 per cent.Be as transparent as you can in your trade. The big thing in life is trust.We are number one in India now. We have a stock of more than Rs 1000 crore (Rs 10 billion).Our plan is to have 50 showrooms all over India by 2015. In the next five years, we also plan to have our presence in all parts of India and also in the Middle East, Singapore, Malaysia, Sri Lanka, etc. where there are more Indians.If we are successful today, I would say, it is because of God’s blessings and then acceptance by people. These are the two most important things for a business like ours to succeed.”