It’s been three years since Gaurav Singh Kushwaha started his journey to sell jewellery online through Bluestone.com. While this is his second brush with e-commerce (his first venture was Chakpak.com), the ride is still very slow. But unlike Chakpak.com which sold Indian movie content, Bluestone has a more valuable preposition in jewellery.
The Indian jewellery market which comprises real and imitation jewellery is in the region of Rs 251,000 crore (US$ 41.61 billion) in 2013, with potential to touch Rs 500,000–530,000 crore (US$ 82.94–87.93 billion) by 2018, according to a joint report by FICCI –AT Kearney titled ‘All that glitters is Gold: India Jewellery Review 2013’. Bluestone wants to make sure that some of this glitter rubs on them.
Besides Bluestone, the other players in the jewellery e-commerce space are Caratlane, Juvalia & You and Voylla.com. With the backend in place, Gaurav is now ready to take Bluestone to the next frontier, which he says will be all about brand building. YourStory caught up with the founder to chalk the route.
A computer science graduate from IIT Delhi, Gaurav has experience across technology, e-commerce and internet marketing. He started Bluestone with Vidya Natraj however she is no longer with the company. Though he was banking on the e-commerce wave to rub off on the business, the mechanics of a jewellery purchase is very different than a book, apparel or electronics purchased online. “We are an e-commerce player, but also a retailer as well. And though everything is happening online, we are manufacturing our jewellery and controlling everything end to end. It’s not that people can just open a site and start selling jewellery,” explains Gaurav.
To set the entire backend in place, tieup with manufacturers, insurance providers, and build their repertoire of designs took them sometime. Many other players, who decided to sell jewellery in the online space, could not make the cut because of the due diligence that is required at the backend for the business of this scale, such as Stylemydiamonds and 21diamonds who have shut shop. Gaurav admits they have the edge because of being the first movers, but the possibility of offline retailers like Geetanjali and Tanishq getting active online remains a concern.
To hand hold and gain customer trust, BlueStone has a 30-day no questions asked return policy. Gaurav says they are strong in their matrix compared to other e-commerce players as they have strong margins because they do not have to stock products. “For Myntra to sell Rs 100 crore inventory a month, they have to stock some 200-300 crores of inventory. But we don’t have to keep inventory and wait for an order. In that sense, we have flipped the whole industry around. We have many designs for the customer to choose from, order and then we manufacture,” explains Gaurav about their business model.
While profitability is still sometime away, Gaurav claims that they have annual revenue worth Rs 50 crores. The average order size on the site is worth Rs 15,000 and customers in the age group of 25-45 years form majority of the customer base.
Building the brand
Bluestone recently raised its second round of funding worth $10 million from Kalaari Capital, with participation from its earlier investors Accel Partners and Saama Capital.
A majority of the funds will be used in marketing and brand building activities. The company also released its new commercial, made by advertising agency McCann Erickson. Gaurav says the current campaigns are to test the customer response to the brand. Armed with Rs 4 crore advertising budget, many more activities to build the brand is in the offing. The second set of advertising would come out in time for the next wedding season of October-December, says Gaurav.
So far, most advertising done by Bluestone has been online marketing, but given the nature of the business, they understand the importance of traditional advertising in brand building. A bulk of sales for Bluestone comes from metros. “Building a brand is the holy grail in this business, the day I am able to do it well along with policies like our 30-day return policy, customers will start warming up to the idea of online jewellery purchase. Building trust takes time, and for people to have that kind of confidence in us will also take time, we will have to keep working toward that,” explains Gaurav.
Gaurav says they have enough capabilities to process five to six times orders compared to the present levels. He, however, doesn’t share the current number of orders they fulfill.
Today, a bulk of customers buying from Bluestone.com is because their friends or family has had a good experience on the site. With advertising Gaurav hopes to appeal to a larger base of customers to try their services. “Having a good brand perception will help us convert in a number of ways. If you had a good experience and you see us on TV, then you understand it’s a big brand and you start trusting. We cannot just do it with ATL advertising, so we will have to figure out a way that is all encompassing,” says Gaurav. He doesn’t rule out the possibility of hiring a brand ambassador for publicity either.