Opportunity and Potential for Jewellery Ecommerce Market in India

Introduction

The jewellery ecommerce market is estimated at 2% of the overall jewellery market in India in 2021. A comparison with the current jewellery ecommerce penetration in the global market and the developed countries showcases more than 10% future potential for jewellery ecommerce penetration in India.

The jewellery ecommerce market penetration significantly varies by product segments and by sales channels. This article analyzes ecommerce opportunities across five product segments and three sales channels.

Product segments

• Imitation or Fashion Jewellery: Costume jewellery with an average price below Rs. 1500
• Silver Jewellery: 925 Silver jewellery with an average price below Rs. 5000
• Gold and Silver Coins: Coins and bars with an average price below Rs. 50,000
• Low Price Precious Jewellery: Gold and diamond jewellery with an average price below Rs. 50,000
• High Price Precious Jewellery: Gold and diamond jewellery with an average price above Rs. 50,000

Sales channels

• Online marketplace: Examples include Amazon, AJIO, Flipkart, Tata CLiQ, Nykaa, Nykaa Fashion, Myntra, JioMart, Jaypore, Pernia’s Pop-up Shop, LimeRoad, LBB
• Brand website: Ecommerce website or mobile App of digital-first jewellery brands and offline jewellery retailers
• Online influenced offline retail: Jewellery discovered online but sold in a retail store, Try at home, or through assisted selling such as chat, phone call or video shopping

Segment-wise Jewellery Ecommerce Market Opportunity

The low online penetration in the Indian jewellery market can be explained by the dominance of the high-price precious jewellery segment which accounts for 60% of the overall jewellery market in India.

High-price precious jewellery

This segment has negligible online penetration mainly because of the serious purchase nature of this type of jewellery where customers prefer to touch and feel the product before buying. The majority of the offline-first precious jewellery retailers would fall in this category.

Imitation or fashion jewellery

This segment has the highest online penetration at 8%. Some of the leading jewellers selling online in this category include Kushal’s, Pipa Bella, Sukkhi, Estele, Priyaasi, and Rubans.

Gold and silver coins

This segment has 6% online penetration. Some of the leading jewellers selling online in this category include Bangalore Refinery, MMTC-PAMP, Joyalukkas, Malabar Gold & Diamonds, and ACPL.

Silver jewellery

This segment has a 4% online penetration. Some of the leading jewellers selling online in this category include GIVA, Tribe Amrapali, Fourseven, Shyle, The Amethyst Store.

Low-price precious jewellery

This segment has a 4% online penetration. Some of the leading jewellers in this category include CaratLane, Candere by Kalyan Jewellers, BlueStone, Melorra, Mia by Tanishq. Offline-first precious jewellery retailers have also started introducing lightweight low-price precious jewellery specifically for promoting online.

Channel-wise Jewellery Ecommerce Market Opportunity

Online marketplaces

This channel has high opportunities for imitation or fashion jewellery, and gold and silver coins. This is because of the low-price nature of imitation or fashion Jewellery, and the low touch and feel requirements for gold and silver coins. Fashion jewellery brands such as Sukkhi, Rubans, and Priyaasi draw the majority of their sales from online marketplaces. Low price precious jewellery (both gold and diamond jewellery) also sells on online marketplaces, although with relatively lesser volumes.

Brand websites

This channel has high opportunities for silver jewellery and low-price precious jewellery. It allows brands and jewellery retailers to offer customized and personalized services to their online customers. Leading silver jewellery online retailer GIVA derived almost 80% of sales from its website and the remaining from other channels including online marketplaces, modern trade departmental stores, and physical stores.

Online-influenced offline retail

This channel has high opportunities for low-price precious jewellery. For example, online-influenced sales accounted for 80% of CaratLane’s overall sales as compared to just 12% for Tanishq (premium jewellery retailer). In the case of BlueStone, 60-70% of customers shortlist the products online on the website before coming to their physical retail store to complete the transaction.

Jewellery Ecommerce Potential

“Jewellery Ecommerce market in India is growing at a CAGR (Compound annual growth rate) of 28% and is projected to more than double its share from 2% of the overall jewellery market in 2021 to 4.2% by 2025.”

A comparison of online jewellery retail penetration in the US market shows potential for >10% online jewellery penetration in India in the future.

Some of the major advantages of jewellery ecommerce are listed below:

Endless design showcase: Ecommerce allows jewellers to showcase an endless number of designs online, while physical stores always have limited inventory carrying capacity. For example, CaratLane showcases around 7000 designs online against around 1000 designs in-store.

Personalization and customization: Ecommerce allows jewellers to offer flexibility to their customers to customize or personalize their jewellery. For example, Candere by Kalyan Jewellers offers diamond jewellery online with multiple customization options such as metal purity, metal colour, diamond quality, engraving etc.

Zero inventory holding: Jewellers can also showcase and sell jewellery online without holding any physical inventory. For example, everyday fine jewellery retailer Melorra operates in a no-inventory model. All products are custom-made for the end consumer after the order is placed online. This allows them to introduce new designs more frequently.

Expanded reach: Ecommerce allows offline jewellery retailers to expand their customer reach, target new customer segments, and increase brand awareness and sales without necessarily expanding their physical footprint.

Global selling: Ecommerce also offers an opportunity to create global jewellery brands of Indian origin. Thousands of jewellers from India are successfully selling on global online marketplaces such as Amazon.com, eBay.com, Etsy.com, and Walmart.com. Most of them don’t have any physical store presence in the international markets. Many jewellers such as Tanishq, Vaibhav Jewellers, Tribe Amrapali, Fourseven also accept international orders on their Indian websites, provide an option to pay in foreign currencies, and deliver to the international markets. Some Indian jewellers have also built dedicated international websites to deliver a more local experience to international customers. Some examples are Tanishq.ae by Tanishq for the UAE market and Caratlane.us by CaratLane for the US market.

Conclusion

The increase in internet penetration, smartphone penetration, internet speed, and logistics coverage in India would continue to accelerate online jewellery sales in India.

Advancement in technology such as virtual try-on, voice search, and video shopping is adding impetus to online jewellery retail by offering store-like experiences to customers from the comfort of their homes.

This is leading to a blurring of the line between online and offline retail. Hence, measuring pure online retail sales would not be an appropriate measure of the true impact of ecommerce. Online sales along with online-influenced offline retail sales, which already account for close to 10% of overall jewellery retail in India, would be a better measure of online impact in jewellery sales.

Note: This article was exclusively written for the Bullion World Magazine.

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