Diamond jewellery sales are sparkling online, as cost benefits and wider choice lure shoppers to stores on the web.
At Ebay.in, solitaires became the third-most selling category in December, next only to mobile phones and wrist watches. The company says every three minutes, a piece of such jewellery is sold on the global e-retail major?s India website.
As internet users increasingly buy online and web jewelers pass on a price benefit of 10-60%, diamonds and solitaires are quickly becoming top-selling items at India’s online shops. Small and medium jewellery enterprises also use third-party online channels to export gems and precious stones to geographies that were previously inaccessible.
Says Vidya Nataraj, co-founder & CEO BlueStone.com, an online jewellery seller: ?There are no formal statistics for jewellery e-commerce in India. But numbers from the trade indicate around Rs 250-300 crore, which is expected to grow 100% every year. India has never before been so open to buying jewellery online. For some global giants, jewellery has become the largest-selling lifestyle product in India.?
Benefits like infinite shelf space and low real estate expenses are helping web jewellers reduce costs ? particularly for stones ? in a big way. Caratlane.com, a R50-crore online jewellery brand started a little over three years ago, says it passes on a cost benefit of 20-25% to customers for its own brands. The firm, a partnership between Jaipur Gems and Chennai-based Lister Technologies, says volumes have trebled every year since it opened shop.
?There is a choice of over 1 lakh diamond items online, which is just not possible with physical retail. Since we don?t carry inventory and have no physical retail space, we can really work on our margins,? says Kalaivani Sadagopan, senior vice-president, CaratLane.com. The average transaction in CaratLane?s diamonds category is at R1 lakh, the highest at R50 lakh. For studded jewellery, purchases range from R5,000 to R25,0000.
Multi-brand jewellery e-retailer JewelsNext.com says its customers save nearly 60% compared with traditional retail on diamonds during festive seasons, and 10% otherwise. ?In the past 3.5 months, we have seen 100% growth in volumes week-on-week, particularly in diamonds, precious stones and semi-precious stones. Currently, we are present in 10 cities, with a selection of 57 jewellery brands. We are looking at taking that number to 1,500 by year-end,? says Gaurav Issar, co-founder & CEO, JewelsNext.com. The site sells 25-30 pieces at an average R30,000 per day.
Investor interest in online jewellery retail is also picking up. Two of its newest entrants in the space have secured venture capital. Within a month of its opening, BlueStone raised $5 million from Accel Partners while JewelsKart.com, part of LensKart.com is being funded by the $4 million capital the firm had raised from IDG Ventures late last year. Caratlane.com has won $6 million from Tiger Capital.
While buyers log on for cheaper deals, SME wholesalers try to expand their export channels online. DVN Traders, a Rs 20-crore Mumbai-based SME founded in the 1980s, says it has been growing 80-100% since it started exploring its online options three years ago. Before it went online through the global multi-brand business-to-business marketplace Alibaba.com, exports accounted for 5% of its total sales.
?End cost to customers was very high as the export chain was very long. After we started doing business through Alibaba.com, we could cut out a lot on middlemen and offer much lower prices. We have almost no domestic exposure as of now ? exports account for 98% of our turnover,? says Neeraj Choksi, a DVN proprietor. The primary market for DVN?s diamond jewellery is the US, besides Australia and parts of Europe.
Masterpiece Jewellery, an Aligarh, Uttar Pradesh-based jeweller with sales of Rs 6 crore, says its turnover has grown 50-150% every year through its website. It exports to US, UK, Canada, Australia and some Gulf nations, at an average transaction size of Rs 2-3 lakh. On eBay India too, close to 50% of diamonds and diamond jewellery are purchased by buyers from outside India, mainly from the US, with exporters leveraging eBay?s network.
However, online jewellery retail in India is still at a nascent stage, and unlike in other product categories, there is little competition. Like Peyush Bansal, co founder & CEO at Jewelskart.com says, ?Selling jewellery is not like selling books and mobile phones. This is a tough segment to be in, there are possibly less than five players, and there is a lot of investment that goes into building a range.?
