Growing Pie of Jewellery Ecommerce in India

#DigitalErra
Aug 26, 2017 · 3 min read

Online jewellery shopping has been slowly growing in India over the last few years. Companies like BlueStone are becoming more recognisable names, while Caratlane, another early pioneer, was acquired last year by Titan’s jewellery arm Tanishq.

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The Indian Jewellery market is currently valued at close to $60 billion and is expected to become $100 — $110 billion in next four to five years. Online contribution for fine jewellery is expected to reach 1–2% by then. This is the beginning of an important phase in the evolution of the jewellery segment as a whole.

According to reports, online jewellery market might reach $3.6 billion (20% of the global market) in the next 3 years. Considering the size of the market which is still traditional and fragmented, the online share is increasing steadily.

“Indian consumers prefer to touch and feel the jewellery before buying, but the change in consumer behaviour will happen quite fast,” had said Mehul Choksi, chairman of Gitanjali, which is one of the major jewellery brands in the world.

Young, independent new age shoppers are starting to look at online platforms as a strong alternative to access the latest and most contemporary designs in fine jewellery while enjoying the convenience and options of choice the platform offers sitting at home.

Recent Acquisition

Earlier this year, Titan’s move to acquire a majority stake in jewellery startup CaratLane shows that niche online retailers are becoming attractive acquisition targets for traditional stores that are struggling to adapt to the rise of online shopping.

“The market has definitely been created. The Caratlane acquisition by Tanishq shows that the offline market is taking it seriously,” says Parul Nagpal, founder of CharmsDay, a company that specialises in making silver charm bracelets.

The ecommerce pie in jewellery is only growing, but the offering has to be diversified. A lot of the interest in online jewellery comes from smaller cities. “Smaller towns tend to be more receptive towards anything new,” says Nagpal. “They are experimenters, and it feels like they don’t need the physical experience as much as people in metros do.”

Of course, that’s also partly because most retail brands still focus on the major metros, so people in smaller towns have fewer access points for physical retail.

Apart from CaratLane, there are a few other well-funded startups including BlueStone and Voylla.com. BlueStone, which counts Tata group chairman emeritus Ratan Tata as an investor, has so far raised at least $31 million from Accel Partners, Kalaari Capital and Saama Capital, among others. Voylla has raised $15 million from Peepul Capital. Bigger online retailers such as Flipkart-Myntra and Amazon India are also rapidly expanding their jewellery businesses.

Post-demonetization, business had slumped to 20% due to cash crunch in the market.

Vinod Hayagriv, managing director of jewellery chain C Krishnaiah Chetty and Sons, said the sector has recovered to reach over 60%. “It will take a year or so to attain normalcy,” he added.

Challenge is with Offline Stores

More customers are becoming comfortable buying low-value jewellery without visiting the jewellers as they come with a guarantee certificate. It’s almost about assurance and how beautiful the product.

The challenge that online players face is customer adoption.

“We need to tell customers about benefits of buying online. So our competition is not with online players but with offline ones,” explained Gaurav Kushwaha, Founder & CEO, BlueStone.com.

Jewellery is one of those few categories where customers focus on design and quality, not discounts. And, in an online store, customers can actually spend hours browsing on what they want unlike offline ones.

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