Malabar Gold and Diamonds: Glittering business strategy

The story of Malabar Gold and Diamonds is truly the stuff that dreams are made of.

It began its journey in a modest office at Palayam in Kozhikode in 1993, and is now ranked 19th among the top 100 luxury goods makers in Deloitte's Global Powers of Luxury Goods rankings.

Initially, the company spent seven years mastering the art of jewellery retail with a singular vision: to become a globally recognised name.

Today, Malabar Gold and Diamonds is not just a regional player but a formidable presence on the world stage, thanks to a business model that prioritises purity and customer loyalty over short-term profits.

Chairman M.P. Ahammed reflects on their success, saying, "We lacked deep knowledge of the jewellery industry and didn’t have any traditional gold business partners. However, we understood that customers are loyal to pure gold. Time has validated this approach. Although profits might be lower with high-quality gold, increased sales compensate for that. This principle has guided our growth."

Innovative business model

Malabar's expansion into global markets is marked by an innovative business model that encourages partnership and transparency. The company’s approach is rooted in inclusivity—over 4,000 investors, including employees and even Ahammed’s driver, hold stakes in the business. "We’ve created a transparent environment where anyone can review our accounts. Our focus has always been on building a brand, reinvesting profits, and ensuring fair returns to our investors," Ahammed explains.

Attention to detail

During its formative years, Ahammed and his team invested time in understanding the nuances of jewellery production. "Initially, I worked closely with goldsmiths to optimise processes, reduce waste, and ensure quality. Our wastage, which was once five percent, is now virtually negligible at 0.001 percent," Ahammed notes. This meticulous attention to detail and commitment to efficiency have set Malabar apart in a competitive market.

Ahammed’s philosophy extends to training and development within the company. "Everyone starts in sales. It's crucial to understand customer needs from the ground up before making strategic decisions," he asserts. The company’s training centre in Kozhikode reflects this commitment to professional development.

Branding

Branding is a cornerstone of Malabar’s strategy. The brand has evolved its tagline over the years from 'Beauty meets quality' to 'Celebrate the beauty of life', aligning its image with global celebrations and joyful occasions. Notable brand ambassadors, including Indian cinema stars like Mohanlal, Hema Malini, Kareena Kapoor and Alia Bhatt, help reinforce this message.

Ahammed’s ambition to set up a world-class brand was sparked by a challenging experience early in his trading career. "We used to supply copra to a company in Mumbai. When that company fell into financial difficulty, they were unable to pay for our goods. If I didn’t receive that payment, I would have faced ruin. They then suggested that we be patient, as they were selling their brand and promised to settle the debt once the deal was completed. It was during this period that I realised a bankrupt company could sell its brand to settle its debts. This motivated me to build a globally respected brand," he says.

Enhancing global footprint

Looking ahead, Ahammed’s aims to create 100,000 jobs and increase the company's turnover from ₹51,000 crore to ₹1 lakh crore, eventually reaching ₹2 lakh crore. The company also plans to expand its market share in India and enhance its global footprint with new manufacturing units and showrooms in Bangladesh and beyond.

Malabar Gold and Diamonds is committed to adhering to strict quality standards and ethical practices. "We ensure purity and sanctity in our gold through moral means, not just technical measures," Ahammed explains.

The company embraces the 'Make in India, Market to the World' ethos, bringing Indian craftsmanship to a global audience. Its innovative schemes, such as One India, One Gold Rate, and omni-channel retail, exemplify its forward-thinking approach.

Social responsibility

Philanthropy is also a key aspect of Malabar's operations. The company gives five percent of its profits to social responsibility projects, including education, healthcare, and environmental protection. Notably, the Hunger Free World project distributes 31,000 food packets daily across India and provides meals to schoolchildren in Zambia.

Malabar also runs the 'Grandma Home' initiative to support and rehabilitate destitute elderly women. 

As Ahammed looks towards retirement, he envisions a future where Malabar continues to thrive. "Our focus on growth and innovation will see us enter the top ten luxury retail brands. The system we’ve built will ensure the brand’s continued success," he concludes.

(This is an abridged version of an article published in Dhanam Business Magazine)