24 September 2013, 02:48 PM IST
Here are some exciting statistics - India has more than 50% of its population below the age of 25 and more than 65% below the age of 35. (Source: Wikipedia) We have more than 125 million Internet users and are one of the top three fastest growing markets in the world. Just last year alone, India had 18 million new internet subscribers compared to the 14 million in China.
And a new a study conducted by the Associated Chambers of Commerce and Industry of India (ASSOCHAM) and comScore predicts an even faster growth - reaching 330 million to 370 million users in the next two years, making India the second largest audience after China.
But even though the present Internet users account for only about 10 percent to 12 percent of India's total population of 1.2 billion, the Internet boom in India is already evident.
Yes, it is evident that young India is driving the country's e-commerce. India will have 130 million mobile Internet users by March 2014, a big jump from the 87 million users in December 2012 (Source: Wikipedia)
So what drives this accelerated growth? - Disposable incomes; a young and educated population; rising use of social media and technology; increasing Internet penetration - reaching into smaller cities and the evolution of the online marketplace model.
The next five to 10 years promise a big opportunity in online commerce because of the young India who are going online with their iPads, mobile phones and smart phones, and this method of interacting with one another is becoming a habit for most of them.
The Internet penetration however has created new business opportunities, prompting several new start-ups as well as existing businesses to enter the online market.
Over the last decade, the Indian ecommerce has seen a gradual shift from being a sector driven purely by the online travel business to one with many different verticals and niche segments. The online retail market in India is expected to reach Rs 70 billion by 2015 from the Rs 20 billion market in 2011.
When I did some research trying to find how the new ecommerce wave is being developed, the message was clear – Internet opportunities were not limited to traditional ecommerce alone. A new business environment – mobile commerce, or m-commerce – could have a far-reaching effect given the extent of mobile use in India. And the growing segment in this space appears to be the gems and jewellery industry.
I observed that even though at a nascent stage, while the contribution of online business to overall sales still remains minuscule, the prospects for India's online jewellery market certainly look bright as the number of people shopping online is growing steadily.
As going online seems to be the mantra for branded jewellers in India - with only about 10% of branded jewellery sales happening online, the success and growth prospects of online jewellery retail store has already made premium jewellery brands to jump onto the e-commerce bandwagon, and selling their inventories online seems to be a growing trend.
Online jewellery retailer CaratLane received $6 million (Rs 33 crore) as investment from private equity major Tiger Global last year and targets a revenue of Rs 100 crore this year. Online jewellery start-up Bluestone reportedly raised Rs 25 crore from Accel Partners. E-franchises of such online sellers may just be the next frontier.
Voylla, a one-stop shop for designer jewellery and accessories, has raised Rs. 2.5 crore from Pune-based Snow Leopard Technology Ventures, a division of Kirloskars and shows a far rapid growth Started by two ex-Amazonians in 2012, Voylla.com offers a variety of jewellery, including gold-plated metal or pure sterling silver set with gemstones and diamonds.
As the online commerce grows, jewellers have adopted newer strategies for customer retention. Offering an attractive collection of jewellery designs; different price points; certified jewellery; exceptional customer service; and the option of cash on delivery (COD). Likes of Caratlane, Jewelskart and Bluestone are also present in the space. However Voylla has relied on customer service, quick delivery and an interesting array of offers to grab a quick marketshare. And these strategies, I found, gives a competitor an edge over the others.
But what about the touch and feel factor that is very crucial for Indians when buying jewellery? The online platform lacks this entirely and overcoming this barrier is not easy. So what should you do, even though COD is an option?
To an online business, where the experience of human interaction becomes important, a good customer service is a vital aspect. Businesses need to establish a good channel of communication with the customer while selling online. Here again, Voylla offers a lifetime exchange and a 30-day no-questions-asked return policy to overcome the touch and feel barrier.
For companies like Voylla, customer retention and repeat orders seem to be the focus. And the primary factor to be successful in this area is to create goodwill, which comes by good product, good pricing, good customer service and brand equity.
In India, Jewellery is the largest selling product on eBay India. And the online jewellery retail in India has a huge market opportunity. And for companies like Voylla however, the growth is at 250-300% year-on-year with close to 5,000 orders a month. And these figures will only see a rise as Young India goes for shopping online.
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