Being a late entrant, the Online Jewellery (diamond/gold) business in India is still in its nascent stage. But interestingly, the Indian jewellery e-tailers space is co-habited by not only companies catering to the entry-level and mid-range of the market but also high-end jewellery. Though traffic may vary in terms of buyers of all categories, it would be right to say that online business in jewellery has caught on in India, and is only getting bigger by the day. It has also changed consumer perceptions to a great extent as ecommerce offers best possible deals like COD option and home delivery option being the best feature of online shopping. It’s not only a fact that E-tailing or online retailing of jewellery is on a catch-up mode with traditional jewellery outlets, but some companies feel it’s an add-on facility for the consumers. Many buyers, prior to visiting the traditional shop, go Online to view, select and compare jewellery, saving time for both the buyer and seller. Today, perceptions of Indian consumers and the over-rated trust deficit that deters them from clicking the ‘Buy’ buttons have changed... it’s a different scene out there from yesteryears!
A visionary once said, ‘Technology alone is rarely the key to unlocking economic value: companies create real wealth when they combine technology with new ways of doing business.’ Newer trends for the greater usage of technology are emerging in business environment every day. This will provide greater opportunity to jewellery business due to the dramatic increase in internet users as well as smart phone users. Women will be playing a major role in the future of this business. If one considers the global scene, India has one of the lowest Internet penetrations for women across emerging nations. Surprisingly, only 8.4 % of the female population is online but market watchers are of the opinion that this figure is poised to grow in the coming years. With more companies entering the space and with a women centric category like jewellery and with the gradual narrowing of gender gap in Internet penetration, it is without doubt that online jewellery business will witness real growth in India. In general, the mindset of the Indian consumer shopping online is evolving, more so the women buyers, who will be making a marked difference to the growth of online jewellery business in the future.
To get a better picture of the latest trends and dynamics of this revolutionary evolution, it is essential to have a look at the Internet and Mobile Association of India’s (IAMAI) recent report. Besides being optimistic on the growth of e-commerce in India, IAMAI also highlights some challenges facing e-tailers to push their volumes forward. The total digital e-commerce was expected to grow 33% to 62,967 cr in 2013, while the exact figures are still to come. An important plus point to take note is that being a IT Major, India has all the right ingredients that are required to scale online jewellery retail like internet penetration, online enhanced product offerings and a younger demographic who has trust in online brands. In the next 4 to 5 years, these very vital variables are sure to contribute to a substantial growth for jewellery e-tailing in the country. The challenges of Online business like, buyers wanting to see the product before buying ; don't trust internet ; don’t believe e-tailers; complaints of less product variety compared to traditional retailers ; late delivery of products and so on and so forth has been dealt with head-on. Online jewellery companies in India offer best possible deals, COD option, and home delivery option with adequate security which has changed consumer perceptions about ecommerce. And so, as prospective buyers are able to research the brand/product before buying, the gap that exists between awareness and purchase - essentially areas like product comparison, pricing research, and product feedback etc. - is taken care of, making it easier for them to make a purchase. Today, e-commerce activities in the country has increased to such a mammoth level that even established traditional retail jewellery companies are opening their own online stores with updated contents.
For a number of jewellery e-tailers , it is just not your average POP-up e-store anymore. They are also launching their own stores in select cities to compliment the online trade, despite the huge offline investments that has to be incurred in rentals and operational costs. But does it make business sense? Apparently it does , going by the Online e-tailers who see it as a complementary step and a part of marketing activity, executed to give a chance to customers to get a “touch and feel" of the product. This works well for the Online companies as well as the buyers, especially in India where some companies deal with high-end jewellery. Here, making a purchase decision is complicated, considering the high price etc. Surely, these stores help in establishing one-to-one relationship with consumers on a long term basis. In addition, by companies showcasing their new launches at these stores, customers could try on the jewellery comfortably; feedback can be collected, and later the jewellery pieces could be added to their collection. Seems to makes a lot of business sense!
Studies show that Asia-Pacific region would emerge as the biggest ecommerce market. It’s no surprise that China and India (the two largest Internet- users countries), are expected to be the main driving forces behind APAC’s ecommerce growth. In 2012, consumer interest in ecommerce went by 128%, apparel and consumer electronics category fascinated online shoppers the most. This trend in Indian ecommerce is bound to continue in the years to come. Many offline promising industries have strategic plans to grab a significant share of this growth, like the G&J industry. The traditional diamond/ jewellery business is one such industry which has jumped on to the bandwagon... lock, stock and barrel!
The enormous potential in the online model have influenced many prominent players of the Indian jewellery retail industry to take advantage by adopting the e-tailing model right from the initial stages. Gitanjali Group is one such entity whose early initiative to inherit a separate, rather focused, approach on Indian ecommerce market paid good dividends. The Group had to invest a significant amount on resources for content building - educating online customers about how to buy, product differentiation and measuring the quality of a product online! Currently, the other major online players operating in this space includes Bluestone, Caratlane and Tanishq, a recent entrant in Online business.
Looking deeper into the Online jewellery business in India, the theory by the end of 2011 was that Indian consumers need to touch and feel everything before they buy. But that changed quickly as buyers went about purchasing jewellery like they did with other products, using ecommerce services more for convenience. According to IAMAI, during March this year jewellery products saw a large rise in online visits and the number of visits more than doubled to 3.76 million as compared to 2012. The domestic gems and jewellery market is roughly Rs 1.2 lakh crore, out of which only under 1% is sold online, according to a study.
Though the imitation segment comprises major chunk of overall jewellery sale in India, real jewellery carved out of gold, platinum and silver is in good demand amongst domestic consumers. Studies show that in recent times there has been more shoppers buying jewellery online. There was a time in India when gold jewellery or diamonds and other precious stones were only bought from the trusted family jeweller. But now the trend is changing and more and more people are open to buying jewellery online. Today, Online jewellery retail in India is at a very initial stage but poised for huge growth in the future. It would not be inaccurate to say that India has never before been so open to buying jewellery online as it is now. Online jewellery sales include mostly branded jewellery, gems-studded jewellery, jewellery for fashion, lightweight designs. The wearability of such jewellery surged the demand of jewellery, if it’s accurate that jewellery is the largest selling product on eBay India. Associated Chambers of Commerce and Industry of India survey indicates that the online retail market in India may grow to Rs70 billion (over $1.30 billion) by 2015 from Rs.20 billion in 2011, as buyers access internet more often for shopping jewellery. If one compares the Online Jewellery business in US, it surely indicates the potential of the Indian jewellery market.
Companies are also tailoring their services accordingly. For example, Carat-Lane uses its own trained staff, and not regular couriers, to transport goods. Solitaires are planned purchases and selling jewellery is about relationship buildings. And they are doing their bit to raise the bar for transaction size and expand the universe of what's acceptable in e- tailing...
This gap is likely to narrow if CaratLane, online jewellery store founded in 2008 and based in Chennai, is any guide. Each month the company's website receives 500,000 page views and records up to 1,000 transactions; last year it grossed around 500m rupees ($10m) in revenues. The average value of purchase for solitaires is 100,000 rupees and smaller items like gold bangles and earrings go at around 18,000 rupees
Still, many Indians are not able to trust an online jewellery store, according to CaratLane will hinder it from reaching its ambitious goal of reaching 1.5 billion rupees in annual sales next year. The firm recently opened its first retail outlet in Delhi, India's capital, and is planning to launch two more in Mumbai and Hyderabad. The store in Delhi does not carry any inventory and displays only imitation jewellery on its shelves. But a few touch-screens give customers a glimpse of the myriad designs on offer; they can also talk to a real-life sales person. It is the trend nowadays is to sell expensive jewellery is by offering both, Online experience as well as a comforting mortar- bricks store to see the pieces before making the purchase.
Founded by Vidya Nataraj and Gaurav Singh Kushwaha in mid 2011, Bluestone does a little over 3500 transactions in a month, with earrings contributing maximum for this Bangalore based company. The company is growing at a rate of 100-110% quarter on quarter in terms of revenue, Bluestone.com. The company was set up seeing the potential in the ‘sunrise sector’ and understanding that the online retail jewellery business in India is poised for a huge growth. More and more customers these days are opting to buy online and the trust factor is increasing. Tapping the opportunity, BlueStone is now set to take on the online precious jewellery market to newer heights. With a large customer base, efficient supply chain strategy and focus on customer service, Bluestone’s is on a steady growth path witnessing an annual growth rate of 300%. Contrary to the offline trends, BlueStone reports a 70 % studded to 30% pure gold products.
BlueStone.com was founded in 2011 with the intent of providing exquisite gold and diamond jewellery to the Indian consumers at affordable rates. BlueStone houses gorgeous pieces of jewellery designed to appeal to people with unique tastes. It is also, one of the first companies to serve the online elite and aims at revolutionizing the jewellery and lifestyle ecommerce scene in India with its firm focus on affordability, quality and user experience. The website provides consumer friendly features like Gold Mine Saving Plan (installments), Wedding Bespoke services, Home Try-on and prototypes, 30 day return, lifetime exchange and many more. The 30-day no questions asked return policy feature and home-try on service by e-tailers offered by the Bangalore based Bluestone have been attracting more consumers. The company addresses issues such as quality, carat fragmentation through phone conversations via Customer Care wing. To tab post sales issues, the company sends dummy rings for size verification during the pre-sales exercise.
Tanishq of the Tata Group has also entered the ‘online jewellery retail’ fray of late, having tasted success already with the brand through its chain of stores. Founded in 1994, Tanishq is a part of the TATA group and a retail jewellery brand in India. Tanishq’s gold and platinum, diamonds, kundan, polki and other precious stones in jewellery collection are very popular in the country. Spread all over the India, Tanishq has over 119 exclusive showrooms across 75 cities. It has its own state-of-the-art manufacturing unit. The company’s design studio houses qualified national and international award winning designers. Tanishq offers a certificate of authenticity with each solitaire piece based on Gemological Institute of America standards. Payment months are only by Credit Card, Debit Card and Internet Banking.
Another relatively new entrant is StyleMyDiamonds.com (the retail wing of Diamonds Factory-London) specialises in allowing patrons to customise their jewellery with no additional costs. StyleMyDiamonds.com was incepted in 2013. The parent brand has its roots in London for the last 10 years and has been serving customers across 70 countries. It further expanded into USA, France, and Germany and has now entered the Indian market with this e-commerce venture.
At StyleMyDiamonds.com, one can do all this at a price lower than that of readymade jewellery at retail stores. The entire experience is made easy with education and buying guides along with the option to engage in a live chat with the StyleMyDiamonds.com team. The brand USP lies in the use of highest quality diamonds, metals and gems which are designed and manufactured in-house, ensuring excellence in customer satisfaction. In the years to come, the company endeavours to further penetrate its existing markets and to be recognized globally as the leading purveyor of affordable, ethical, high quality diamonds and jewellery
A few years ago, no one would have ever realised that one day the internet would be trusted for something as valuable as gold and other jewellery, and that too in India! But companies who were savvy enough to indulge in trust-building measures like giving a Hallmark certificate with every piece of jewellery, cash on delivery service, 14 days no questions asked return policy and a fully trained customer care team which can resolve all your queries did the trick. If the component of trust and choice is intact, people will be open up to online purchases. Some companies have been able to close sales deals worth Rs 1 million on heavy jewellery, thought they feel bringing in choice is the biggest challenge. At present, most sites offer a wide range of chains, pendants, rings, earrings, bracelets and simple as well as elaborate sets. Whether the jewellery pieces are branded or unbranded is of not a major criterion but authenticating the products is of utmost importance for the retailers. This instils confidence in the buyers about the quality and price of the jewellery piece.
Safety in online jewellery is also touted by the Online companies as buying Online is quite safe in terms of supply chain as the products move in a completely secure environment and payment mechanisms are already quite secure in India from bank transfers, verified by visa. In any case, a large portion of the business happens on cash collection mode before or at the time of the delivery. Also, considering the product being of high value, most successful online jewellery sites give importance to service, before and after sales. On the top of the list of priorities is customer care service as it is most important to gain customer's confidence. Lest we forget, a couple of large multi-store retail chains who also went on to enter Online business, eventually discontinued their virtual venture for want of traffic in their websites. This could be due to inadequate focus on their Online business, as Online businesses involve a whole gamut of Networking exercise to be effective and successful.
The potential for online jewellery business size is huge in India and though the overall domestic gems and jewellery market is estimated to be around Rs 1.2 lakh crore, the current online jewellery market is less than 1%. When it comes to real jewellery segment the average price per piece is around Rs.12000-14000. In real jewellery segment, there has been tremendous growth .The existing players have been showing around 100% growth quarter on quarter. This has come as a surprise as this category has the highest average selling price. More so as, in India, buying precious metal typically involves multiple consultations with friends and family. Some innovative e-tailers however have taken initiatives of another kind. To add offline experience for the discerning buyer, some e-tailers like Caratlane opened offline experience lounges in Delhi and Hyderabad. Soon there were others like BlueStone opening lounges on similar line. In the near future, many more jewellers are expected to go on Online business in India... as it is believed that this market growth is continuous; and has invariably grown some percentage as you read this!
Aruna Gaitonde, Rough&Polished, Mumbai
