With a global growing jewelry market expected to reach a total of $272B in sales by 2020, and customers more and more comfortable with online shopping even for big ticket purchases, jewelry e-commerce is starting to shine on like never before.
It is not a new e-commerce vertical though. BlueNile, a successful US-based online retailer of diamonds and jewelry, started its online trade all the way back in 1999. That is only 5 years later than the inception of Amazon which back then was only selling books, CDs and DVDs. And it is only one year after Google was founded. Fast forward to 2016, online jewelry e-commerce is still lagging behind other online shopping verticals like fashion and electronics in terms of adoption - but it’s about to become mainstream.
Who is pushing the envelope?
While previously mentioned US-based company BlueNile has recorded $473M revenues in the fiscal year ending Jan 2015 by selling internationally, there are other notable players that seem to rapidly attempt for the crown of jewelry e-commerce. The most active market in the most recent years in terms of jewelry online shopping adoption is undoubtedly India. And no wonder, as it is the biggest consumer of gold and diamond jewelry in terms of volume at a global level, as well as a market with high growth penetration of e-commerce with renowned players like Flipkart.
India’s first ever and largest online jewelry store is CaratLane. The company was founded in 2008 and has raised $52M funding to date. One of the founders came from a family owned traditional jewelry business and was inspired by BlueNile during his studies in California. The other founder was a customer of this traditional jewelry business and had a tech background.
Nowadays, CaratLane is eyeing a yearly sales goal of $226M by 2020 in India, while it is estimated to close 2015 with a revenue of $53M (that is a 2.3X growth from 2013 to 2015 and a 4.3X growth from 2015 to 2020) - numbers that show a very rapid growth of the Indian jewelry e-commerce market.
BlueStone, another Indian-based company, saw the potential and opened the digital gates for jewelry shoppers in 2011. Since then they raised $31M to fuel their rapid growth. And most notably is that among their investors one could find Ratan Tata, the Chairman of Tata Group, a conglomerate that gathers all sorts of services and products, including India’s largest jewelry brand, Tanishq. This stands as a proof that the traditional jewelry brands are seriously looking into the online e-commerce trends for the jewelry vertical.
With such a fast growing online jewelry market, India is setting an example at global level. Businesses eyeing the jewelry vertical have much to learn from how Caratlane and Bluestone are shaping the rapid adoption of e-commerce for precious earrings, bracelets, necklaces, rings and solitaires.
How to overcome challenges in jewelry e-commerce?
As both Caratlane and Bluestone are ViSenze’s customers, we’ve picked the brains of our Business Development colleagues, Vasanth Raju and Raj Sawhney, about their insights on the fast growing jewelry e-commerce in India. First of all, to allure buyers into purchasing online big ticket items like jewelry, certain things had to happen:
1. A market comfortable with e-commerce overall
India has the renowned Flipkart, an e-commerce company that has definitely shaped the market since its launch in 2007. It also has a tremendous e-commerce competition, having Flipkart, Snapdeal and Amazon doing their best to attract customers to the online world. Though these companies are active in other, less expensive verticals, like fashion, lifestyle and electronics, it certainly helped getting shoppers more comfortable buying online overall.
Nevertheless, while Flipkart, Snapdeal and Amazon target the masses, online jewelry stores like Caratlane and Bluestone are more niched, targeting savvy customers from mid to upper level classes. Thus market timing is crucial. An online jewelry e-commerce business has more chances to be successful if the market it plays in has general e-commerce already adopted by the early and late majority, while early adopters are ready to pay online for high end, more expensive, items.
2. A clear differentiator from traditional jewelry shops
As mentioned, the Indian market is the biggest consumer of gold and diamond jewelry in terms of volume at a global level. Walking on the streets of Bangalore, Delhi or any other city, one could find traditional jewelry shops left and right. In order to stand out from traditional jewelry shops, Caratlane and Bluestone offer their customers easily accessible online education about how to choose the right gemstone and precious metal. This plays along the general trend of consumers willing to self-inform themselves from online resources, as opposed to depending on information from salesmen in a shop.
Another aspect that sets apart Caratlane and Bluestone from traditional shops is the fact that they provide trust certificates for all the diamonds and solitaires they sell. Surprisingly, this was not common practice on the traditional jewelry market in India, and by introducing the trust certificates, Caratlane and Bluestone had a lot to win.
Last but not least, online jewelry is cheaper than jewelry found in traditional shops, without compromising on quality. That is because the business model allows lower costs.
3. Removal of all possible bottlenecks
Paying thousands of dollars online for a jewelry item can always raise suspicions for shoppers. But Caratlane and Bluestone provide all the possible guarantees that everything will be fine, like cash on delivery options. Sometimes shoppers’ concerns are not due to the lack of trust in an online shop, but simply in being able to predict if something will fit them, both in terms of size and style. This is the reason why they enabled a Try at Home policy, enabling people to choose items that they can try in the comfort of their homes before ordering. A 30 days exchange policy is also accepted by both companies. Additionally, Caratlane introduced in August 2015 a Virtual Try-On app that acts like a mirror with a real-time 3D projection of a fashion item on your looks.
All these options help remove most doubts when considering buying a beautiful solitaire necklace online.
A case for visual search
You might wonder why Caratlane and Bluestone, the two leaders in jewelry e-commerce in India, have rapidly adopted visual search technology on their platform. As a matter of fact, Caratlane was our first customer in India, before our other current customers there like Flipkart and Roposo. And they might have been the first business in India to add visual search to their e-commerce platform.
So why is visual search such a vital feature for selling jewelry online?
To start with, jewelry is difficult to describe in words by an average shopper. A certain ring design is more difficult to describe than a red and gold floral A shape dress with a V neck. How can you describe a ring more than saying “a diamond ring”? So the way shoppers go on their quest for the perfect pair of earrings is by finding inspiration first, browsing through the items in a traditional or digital shop.
What made traditional shops more appealing in the era before visual search was the fact that once the shopper set her eyes on a jewelry item she somehow liked, she could ask the shop assistant to show her other similar items. But now that is possible in the digital world as well, with visual search technology showcasing in real time visually similar items based purely on the looks, and not on popularity. This acts like a virtual shop assistant that pleases shoppers and helps them find exactly what they love.
Of course, the technology needed special tweaking to accommodate the jewelry vertical. While ViSenze has its core specialty in fashion, when encountering this market need we fine tuned our machine learning algorithms to be able to look into types and colors of gems, specific jewelry designs etc.
Is jewelry e-commerce about to become mainstream?
We believe that most offline businesses will turn into online counterparts, and jewelry e-commerce shows signs that is here to stay and shine bright. India is definitely a market to keep an eye on for everyone interested in how this trend is going to turn.