Jewellery e-tailor Diamondere wants to crack the US market, seeks to raise funds
While many still consider selling jewellery online a risky proposition, its market potential is huge, considering that jewellery is one of the largest selling products on eBay India. And while there are a number of players already operating in the space, a new one has quietly made its entry in the form of Mumbai-based startup Diamondere Pvt Ltd that owns and operates Diamondere.co.in, an online jewellery site.
But what's different about the startup is that unlike other e-commerce players that focus on India and look at expanding into other markets, when they receive significant traction, Diamondere is actually targeting the US market first. This does not mean that India is not an important market for them. Rather that most of their marketing efforts will be focused on the US market.
"India is still a nascent market and the Indian online jewellery market opportunity is around $50-80 million, whereas the US market opportunity is close to $6-9 billion. Also, the average ticket size and the return on investment (ROI) is much less here, which is why, in terms of marketing spent, India will become a secondary market for us and we will focus our energies towards the US market instead," said Varun Godha, CEO, Diamondere.
As part of its expansion plans, the company will start deliveries in the US in another two weeks, which will be followed by a US office. For the same, the company is already in talks with a few investors in the Silicon Valley and is looking to raise close to $3 million in the next six months.
The startup was founded in February 2012 by Varun Godha, Sameer Phatak (CTO), Sudheesh Sudhakaran (COO) and Anish Godha (advisor, international markets). Varun holds a B.S. degree from Cornell University, US, and was earlier working at Oliver Wyman. His family has been in the jewellery manufacturing business for over three decades, providing him with the support and experience required for an online jewellery business. Also, while three of the founders are involved with the startup full-time, Anish, Varun's cousin, works with the company on a part time basis.
The products are offered in a number of categories that include rings, engagement rings, earrings, pendants, and 'only diamonds'. The products can be filtered according to design, gemstones (diamond, precious and semi precious) and metals (rose gold, white gold, yellow gold and silver). Users can also search for products by name.
All designs are customizable, wherein buyers can choose the metal type, gold karatage and diamond quality. In the sites 'Make Your Own' section, buyers can create their own ring by selecting the diamond and design of their choice and budget. They can also engrave the jewellery (with their desired message) free of cost.
Additionally, customers also have the option of submitting their own designs to the site. They can send an image of the jewellery piece they want (a magazine clipping, a website link or their own drawing) along with the specifications required and the company will send a quote for the same. Once approved, the company claims that it can manufacture and ship the product to the customer in less than two weeks (10 days).
Payments, logistics and returns
For purchasing, users can either register with the site or use a guest account. The company claims that its diamonds and other pieces are certified by accredited agencies (like GIA, IGI and SGL) and it will provide a certificate for the same along with the product. Apart from the usual payment methods, the company has also introduced its own version of cash on delivery (COD) in Mumbai, Delhi, Kolkata and Bangalore, according to which, buyers can pay 15 per cent deposit (of the total payable amount) by credit/ debit card and the company will collect the remaining amount when the jewellery is delivered to the customer. According to Varun, this provides more flexibility to the consumer and filters the serious buyers from the non-serious ones.
The company handles its own logistics, but has tied up with courier companies like Blue Dart, Speed Post, etc. for deliveries.
And while the company offers a free 30-day return policy (that is if the product has the original label, packaging and certificate) for jewellery, buyers will have to pay for all courier and shipping costs to return the product to the company. It also offers free lifetime repair and polish, but buyers will again have to pay for shipping both ways.
The site went live in March this year and is getting close to a 1,000 visitors on a monthly basis. But Varun is not worried about the low numbers since the company has not spent a dollar on marketing as of now.
"Till now, we were more focused on improving our product offerings and building the product catalogue. Going forward, we will ramp up our marketing efforts in a big way," he said.
The site currently offers around 400 products (which can be further customised) but the company is looking to increase this number to 1,000 by early next year. The price ranges from Rs 1,500 for a silver pendant to a display pieces worth Rs 20 lakh. The team size is 15, excluding the vendors who handle the manufacturing.
The online jewellery space
Online jewellery portals have managed to attract investors in India. Early this year, Accel Partners, Silicon Valley Bank (the subsidiary and commercial banking operation of SVB Financial Group) and K Ganesh, founder of TutorVista Global (now under the UK-based Pearson Group) had invested up to $5 million in Bluestone.com, an online jewellery store run by Bangalore-based Jewels Online Distribution India Pvt Ltd. Prior to that, in June last year, CaratLane.com, another diamond and jewellery portal run by Chennai-based Caratlane Trading Pvt Ltd, had raised $6 million from Tiger Global Management LLC.
Diamondere will face competition from both these funded companies, in addition to other players like Pepperfry (that offers both fashion as well as precious jewellery) and 21Diamonds, among others.
(Edited by Prem Udayabhanu)