In-depth: Buoyed by festive demand, online jewellery segment eyes 80% growth

Online jewellery companies are expected to post around 80 per cent growth in sales this festive season while this segment is steadily growing at 70-100 per cent YoY.

The top two players in the category – Bluestone.com and Caratlane.com, a subsidiary of Titan – are already seeing three times more traffic on their websites and the momentum is likely to continue till the year end.

Deepika Tiwari, General Manager, Marketing, Tanishq said, “The segment is expected to see about 80 per cent growth in this festive season.”

Pegged at around Rs 800-1000 crore, the online jewellery segment has three to four serious players and several newbies on the block. The segment that earns over 40 per cent of its annual revenues from these festive months is looking at a better growth this year.

The festive season that generally starts around Teej in August goes up to Diwali in October followed by the wedding season. These five months till December are crucial for the online jewellery category.

“The tone is set as early as VaraLakshmi and Teej, and this goes all the way to December. By Diwali, the customer knows that new collections/ products/ offers will come up. It’s become how Christmas is in the West. Everyone is doing their best sale seasons," said Tiwari.

The recent government notification that exempted customers from jewellery purchases exceeding Rs 50,000 from providing the income tax permanent account number has also brought cheer to the jewellery and gems industry.

"It’s just been 48-60 hours before the effects are seen. But offline will also see a boom because of it. Double digit growth for big players can be expected,” Tiwari said.

Caratlane has launched a new offer for the festive season, promising guaranteed deliveries by Dhanteras. Tanishq has tied up with the upcoming Bollywood flick Padmavati as a part of the festive season marketing.

According to the figures shared by Bluestone.com, “The overall jewellery market is about $60 billion and the online jewellery segment is about 0.2 to 0.3 per cent of this. The top two players command about 80 per cent of this pie.

Caratlane clocked a turnover of Rs 177.84 crore in the year 2016-17, as per the annual report of the Titan Company. In the same year, Bluestone, according to a report, overtook Caratlane to become the No. 1 brand in the online jewellery category.

The leading players in the online market get orders in the range of 7,000 per month with the average order value being between Rs 25,000 and Rs 27,000.

The other players in the category are Orra, Mia, Vyolla, Tanishq and Geetanjali Gems among others.

Online vs offline

Most online jewellery brands deal in the everyday designs and light pieces of jewellery. This is another reason for the low cost of online purchases, against an average offline purchase that can go up to Rs 7 lakh for a single piece of jewellery.

Atul Sinha

Atul Sinha, Senior Vice-President, Marketing, Caratlane, said, “We get a lot of traction for our lighter designs since it fits the modern lifestyle. It’s not something that they (customers) will buy and keep in the locker, wearing it only once in a while. Also, the customers can select and buy jewellery online – through website or app, irrespective of where they are – at home, in office or while commuting. This lends a longer time to make a decision about a certain piece and design of jewellery. In a store, you discover what’s inside the store, only after you walk in. In our case, you can discover jewellery sitting at home. Our second set of customers are the ones who browse and select jewellery online, but they go to one of our 25 offline stores to try the piece on and make the final purchase.”

The company started brick and mortar outlets across the country in an attempt to not lose out on the set of customers who are not well versed with online payments or find it uncomfortable. There are also customers who want to try the jewellery on before purchasing it. These are two major reasons that have driven the online players to the offline segment. “Our mission is to democratise jewellery and make it accessible. At the end of the day, we did not want to force a customer to choose a channel. The difference with our offline customers is that ours are informative set of customers since they have already done their research online. The transaction time is down to 15 minutes, against a traditional store, where this time is sometimes over an hour. This helps us keep our store smaller, more efficient and the stores are not an added cost for us. It is more opportunity. Offline sales is highly influenced by the online platform. Online continues to be the most important point of content, even if the volume of sales is much higher from the offline platform.”

Both Caratlane.com and Bluestone.com recently launched a new feature called Try at Home, wherein the pieces shortlisted by the customers are sent to them through an executive and the customers can try the jewellery before they pay for it. Another important spot for growth for the online players is the ‘gifting’ space. Since these companies ship the products across India, gifting jewellery becomes easier. Buying it from the store and parcelling it is risky and troublesome. Sinha assured, “Our shipping is 100 per cent insured.”

The online jewellery platforms not only gives access to the jewellery, but also enables buyers to browse the designs with complete details on the specifications and this detail is a great benefit over the offline stores.

For long, Indians, who have a huge appetite for gold and jewellery, have been purchasing the valuables from their family jeweller. Going to online platforms for gold is on another level in a market where shifting to another offline jeweller is also a challenge.

Sinha is optimistic that the perceptions are changing. “People now know the benefits of online purchases and that we have a 30-day money back policy and that they can return a piece of jewellery if they don’t like it. Also, Titan’s investment last year has added a lot of credibility to our designs/ business and the authenticity of our jewellery for our customers. One set of customers is very comfortable with the online purchases, but a large chunk is not. Over a period of time, I think a lot of customers will move to online and even now, once a customer has bought offline from us, the repeat purchase happens online in most cases.”

Impact of GST and demonetisation

Tiwari said the people who purchase jewellery online are mostly the young who are not affected much by GST and demonetisation.

Sinha said the effect of demonetisation was limited to a few months. “We get about one third of our online order for cash on delivery (COD), this went down for a couple of months. But as the market started normalising, we got back to the previous situation and it is as is, since then.”

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