Mumbai-based jewellery company Renaissance Global Limited (RGL) posted a strong 23% year-on-year growth in its direct-to-consumer (D2C) business revenue to Rs 53.8 crore in the second quarter of fiscal 2024 (Q2 FY24), compared to Rs 43.9 crore in Q2 FY23.
The Q2 FY24 results mark the fifth straight quarter of 20%+ D2C growth for RGL, underlining the robust traction of its digital strategy.
RGL’s D2C business has witnessed tremendous growth over the past few years. From just Rs 25 crore in Q1 FY22, quarterly D2C revenues have doubled to Rs 49 crore in Q2 FY24. In fact, D2C revenues have increased every quarter year-on-year.
The company sells its products through both B2B and D2C channels via dedicated online stores for its licensed and owned brands.
Among the brands its sells are Irasva diamond jewellery, Jewelili everyday wear diamond jewellery, Corelle gold jewellery and RIXOS wedding jewellery.
With this, for the first half of FY24, RGL’s D2C business revenue stood at Rs 109.1 crore, registering a 29% increase over the same period last year.
As per the company’s estimates, the annual revenue run rate of its D2C business is Rs 311.8 crore in H1FY24, versus actual FY23 revenues of Rs 239.1 crore.
In FY21, total D2C revenues were Rs 64.9 crore. This accelerated to Rs 123.8 crore in FY22 and further to Rs 239.1 crore in FY23, representing a three-year CAGR of 69%. If the current run rate is sustained, RGL is on track to deliver over Rs 300 crore revenues from its D2C business in FY24.
The D2C business is critical for RGL as it provides higher margins. As per the company, D2C business operates at normalized EBITDA margins of 20-22%, much higher than traditional retail sales. Given that D2C revenues are increasing as a percentage of total revenues, RGL said it is confident this will expand overall EBITDA margins going forward.
RGL sells branded jewellery across high-potential markets in USA, Canada, UK and Asia via both B2B and D2C models. The company has licensing agreements with global brands like Disney, Hallmark, Netflix and NFL. It also owns brands such as Irasva and Jewelili.
In 2020, RGL launched online stores through 6 D2C websites to market and supply its licensed and owned brands directly to consumers. The stellar growth of the D2C business over the past two years vindicates this strategic move, as consumers increasingly prefer to shop online.
The company has benefited from the opening up of the economy after COVID.
It operates three business segments – Branded Jewellery, Customer Brands and Plain Gold Jewellery. The key focus area is the Branded Jewellery division.