E-Retail: A New Channel for Growth


Upselling online

 

Ecommerce as a whole in India was estimated to be worth 400 billion in 2013, of which pure-play marketplaces and niche vertical players constituted about 18 and 17 per cent respectively. Going online naturally represents a huge opportunity for the jewellery industry, which happens to be one of the biggest segments within retail. The Retail Jeweller organised a session on "E-Retail: A New Channel for Growth" to understand how some noteworthy players are trying to making a mark and differentiate themselves in online commerce. Nikita Peer

 

Anshul Khandelwal, marketing head of the Ratan Tata-backed BlueStone.com kicked off the discussion with some strong observations. “Retail formats have changed from mom-and-pop stores to organised chains where the variety is humongous and people enter stores to check out items freely,” he said. “However, jewellery as a category has remained very stagnant for the past 50 years [in terms of] the buying experience. Shopkeepers place a few pieces of jewellery at a time in a tray and consumers try them on and buy. What online shopping offers is the convenience of browsing through an ample variety of jewellery.”

 

Vikas Purohit, head-fashion, Amazon India, said, “A retailer has to be in place where walk-ins are the most and in a manner where conversion is highest. It’s really not about online-versus-offline. For a smart businessman, this is another medium to reach out to customers.” He also questioned the common perception that people go online only in search of deals. “There are deal-seeking audiences as well as novelty-seeking ones. You should maximise [your enterprise] for what people want, especially when you are in a medium like online, where it is easier to get data on consumer behaviour.”

 

Given that in the jewellery segment sales still depend on trust, will it be only traditional jewellers who go online who will gain the upper hand? “Even if a customer is buying a ring worth 2,500 — the value of one pair of jeans — he is more cautious, as the purchase is viewed more as an investment than an accessory,” said Nitin Jain of WearYourShine.com bacled ny P C Jeweller. Deepthi M R, marketing manager of VBJ-backed ZaAmor, said, “The moment people saw VBJ on ZaAmor, the sales went up. The trust factor does play a crucial role, and thus a traditional jeweller with a strong offline brand value could score better online than a new entrant.”

 

That’s not the last word, however: as Deepak Tulsian, head–jewellery, eBay India, said, “For the smaller, not-known players, the platform trust of the marketplace goes a long way in helping them prosper.”

 

What’s more, as Vishwas Shringi, co-founder of Voylla, points out, now that the government has made hallmarking compulsory and agencies like the Indian Diamond Institute (IDI) provide diamond certification, buyers shouldn’t worry about shopping for precious items online. “Among the online jewellery buying adopters are young couples who have moved out of their original village or city for work. These people, who are mostly first-time buyers on their own, know nothing about the technicalities and would rather go to a player who is transparent with respect to price and weight, and whose product can provide some sort of emotional benefit.”

 

“In India, the jewellery consumption is $50-60 billion a year,” observed Jain. “The players who run their business in an organised manner do not constitute more than 25 per cent of the market — all of which go all out to tap largely the wedding category. We want to be an organised [but online] player targeting jewellery in the price range of Rs. 5,000-60,000 because we believe that consumers still want to touch and feel heavy sets before buying.”

 

Kapil Hetamsaria, founder & CEO, VelvetCase.com, claimed to be able to sell wedding jewellery on his platform. “In bridal jewellery there are classic and trendy styles,” he said. “Classic designs are easy to sell online, because the customer knows what to expect.”

 

An important aspect of e-retail in jewellery is getting customers to transact online. This requires the promoters to have deep pockets. Players like Amazon.in are heavily funded; for others, the cost of acquiring customers could be almost prohibitively high. “The cost of customer acquisition cannot have an exact metric,” said BlueStone.com’s Khandelwal, “because it’s all about how much value you generate from that customer over a period of time. If you are to ramp up quickly, you need marketing dollars. Customer acquisition is one of the biggest pain points.”

 

“Marketplaces help with catalogue-building, acquiring customers and also selling them on the site. For a jeweller, selling only through their own site can be a very expensive proposition. Thus, marketplaces can be a starting ground for the ecommerce channel,” explained Purohit.

Previous Trendsetters



Private Equity & Funding: Opportunities & Future
More...
Social Media
More...
Designers Partnership with Retailers
More...
E Retail A New Channel for Growth
More...