India’s Online Jewellery Business: Culture and Clicks
IN THE online jewellery business, not all that glitters is gold. Trinkets tend to sell well—they are cheap, do not weigh much and thus are easy to deliver. For real precious stones, however, most customers still prefer physical stores, just to be on the safe side.
Nowhere is this split in the market more pronounced than in jewellery-crazy India. In the country, eBay, an online marketplace, sells a trinket every four minutes; solitaire pendants rank third among the hottest selling items after mobile phones and wrist watches. Still, online trade of precious stones accounts for only a tiny fraction of India’s $10 billion e-commerce business as compared to roughly 13% in America.
This gap is likely to narrow if CaratLane, an 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.
But convincing consumers to buy high-end jewellery online has been hard. For starters, CaratLane had to overcome worries that orders could get lost or are not genuine. The firm now outsources logistics to well-known courier companies, which deliver the jewellery in a tamper-proof pack. And diamonds are certified by independent international agencies. It also did not help that only about 1.5% of Indians have credit cards, which stifles high-ticket purchases. To overcome this problem, CaratLane, like other online vendors, now allow customers to pay in instalments.