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E-Commerce Trends In Gems And Jewellery

Monday, March 16, 2015
By Jignesh Mehta

Jignesh Mehta is Founder & MD, Divine Solitaires

The Gems & Jewellery industry is growing rapidly and like any other industry, Gems and Jewellery industry is also setting its foot in Internet and mobile business. Now days, customers prefer not only to see diamonds and jewellery online or through mobile apps, but also make purchases, instantly. Online shopping may be a relatively untouched sector so far in India but it has been growing with an enviable pace since last couple of years.
Ecommerce pundits have voiced reasons as to why apparel wouldn’t see the same kind of sales online as electronics in India. Indian consumers need to touch and feel everything before they buy, was the common line to tow. This is changing fast as buyers show good appetite towards categories such as gems & jewellery and most importantly, are using ecommerce services for convenience.

Indians are known to be fond of accessorizing themselves with ornaments made of precious metals such as gold and silver. The domestic gems and jewellery market is roughly Rs 3 lakh crore, out of which only under 1% is sold online, according to a study by PwC. A major chunk of online sales comprises of imitation jewellery. The current market size of imitation jewellery in India is pegged around Rs. 8000 crore, out of which online retail contributes 2% (approx Rs 150-180 crore).

E-tailers offer better pricing, greater variety, international patterns or designs, third-party lab certification of all their products and easy payment schemes (like EMI) to gain a larger customer base. Moreover, e-tailers extend lucrative discounts and coupons to consumers as the operational cost is low when compared to brick and mortar model.

Real jewellery (carved out of gold, platinum, diamonds and silver) is also catching up gradually amongst indigenous consumers. With features like 30 day no questions asked return policy and home try on service by e-tailers are attracting more consumers to involve in big ticket size transactions. Real jewellery buying process involves series of pre-sales conversation with consumers over phone, mail and live chat.

E-commerce presents challenges, creating excitement for consumers in terms of design, price, and transparency and discounting – but winning the consumer's trust is the biggest hurdle for retailers. Most Indian consumers usually prefer to buy from their family jewelers and attracting them online could be a big challenge. Moreover the touch and feel factor that is very crucial for Indians when buying jewelry is also of concern.

The situation therefore demands servicing the customer offline. While the interface can be online, the e-tailer needs to have a strong team at the back end to answer the queries and even free trials at home for expensive diamonds and jewellery.

In real jewellery segment, the existing players have been showing around 100% growth quarter on quarter, and to some extent it’s surprising as this category has highest average selling price, and buying precious metal typically involves multiple consultations. Divine Solitaires had not only been successful in selling their solitaire diamonds online by being transparent, affordable and trustworthy, but also enhanced their brand value throughout the e-commerce segment. Recently witnessing the increasing demand in the online sale; solitaire diamond worth Rs 12 Lakhs was sold on their home portal.

The entry of Flipkart and Amazon is a welcome change as it will increase the awareness and interest in the category.

The winners will however, will emerge from focused players who understand the finer nuances of fine jewellery and a thorough knowledge of precious gemstones backed by standardized pricing and transparency.

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