The jewellery industry is one of the fastest growing sectors in the Indian economy. It is hugely export oriented and labour intensive, thus contributing greatly to the foreign exchange and to the employment. The demand for jewellery in India is unique and to some extent inflexible to price. The gold demand in terms of pricing is explained by its religious and cultural significance, like the jewellery is purchased for gifting purposes, weddings and as an investment.
It’s not easy to build an e- commerce platform that connects manufacturers and retailers. There are challenges like designs getting copied and cataloguing the existing jewellery products, etc.Jewellery customisation and personalisation are hard because they cannot be stocked. This poses a painful process for the retailer. While people love personalisation, it is difficult to scale the business because of the inherent issues in the manufacturing process. This could be solved by automating a bunch of backend manufacturing processes.
Most customers who do wedding shopping boast of shopping for jewellery from nearby cities because they assume bigger cities have better collection of designs. Most of the jewellery designs that we see online are computer-rendered images (the 3D images are subject to virtual lighting and high-resolution images are created). This is a time-consuming process. With the growing e-commerce companies in the jewellery industry, this seems to be a good problem to solve.
Selling jewellery online is hard. That too when you have at the least seven to 10 offline retailers within 10 km from where ever you live.In the current jewellery industry, most of the big brands are setting up their e-commerce division. Unless the brand differentiates or solves a real problem, it is difficult to sell online. Typically, sales happen where there is ease-of-buying-and-gifting products. Apart from these, there are a lot of offline retailers who use their e-commerce website as their business card and are selling on Flipkart and Snapdeal.Some of the proposed problems may be difficult to solve because most of the transactions in buying big ticket items in jewellery happen in cash. The idea of Digital India and the use of plastic money could help solve some issues in the future.
The idea of using technology in the distribution of jewellery is in the early stages, and I believe there will be lots of innovative products in this space that will together make jewellery shopping a unique experience. They will help make India a hub for manufacturing and a distributor of gem and jewellery for the globe.
The Jewelry industry is now enjoying strong growth for several reasons:
Increased Shopper Confidence
Improved Product Displays
Better Customer Service
Though social and mobile shopping applications are also helping all online retailers, including jewelers, it’s the aforementioned improvements in online retailing which are driving the newfound interest and investment in online jewelry companies.
Since the price of item is price sensitive the customers reject the items like gold coin or medallions if the price of gold depreciates on the day of delivery. It's a high value item so insurance charges and logistics charges becomes very high which increases the cost and inturn makes it difficult to compete with the local vendor. There is also a risk of missed delivery or delivery into the wrong hands. Moreover there is a risk of theft etc.
The size of rings and bangles is a major concern, many a times customers order for an item and reject it due to difference in size. Due to a limitation in the card limit of most of the online buyers, selling of high value gold and diamond articles becomes very tough.
Marketplaces like Amazon, Flipkart, Ebay, etc. Hold the payment to the vendor for about 18-21 days which results in the interest loss to the vendor as margins are very less. Moreover these market and places charges the vendors on the bill value which again results in increase of the cost of the item being sold on these places.
The article has been pen down by NikeshBardia, Director, AnopChandTilokChandJewellersPvt Ltd.
(Disclaimer: The views expressed are solely of the author and indianretailer.com does not necessarily subscribe to same.)