Did you know the gem and jewellery industry provides employment to 2.5 million people in India, as compared to IT services which provides 2.1 million jobs? Yes, the jewellery industry is huge in India.
So, here is the deal. Tesla is hacking cars, AirBnB the accommodation industry, and our own Housing, the real estate space. Who is hacking the jewellery industry? These are highly valued companies with humongous valuations because they are solving a problem worth billions.
Are there problems in the jewellery industry that are worth solving? Below is the list of problems that are ebbing high presently in the industry:
Problems in the jewellery industry, ripe for disruption
Manufacturer-retailer connect problem
Gem and jewellery industry’s total market size is supposed to touch USD 90 billion in 2018. Every year at IIJS (India International Jewellery Show) held in Mumbai, more than 1,000 jewellery manufacturers participate and several retailers from all over the world attend the show.
If you are a manufacturer, you have a minimum of four-year waiting period to be listed on this show. And any retailer attending the show will never get a chance to look at all the several thousands of new designs listed. This event happens once a year. This shows clearly the disconnect that exists in the industry. Manufacturers want to sell more new designs, and retailers want to procure more new designs.
It’s not easy to just build a platform that connects manufacturers and retailers. There are challenges like designs getting copied and cataloguing the existing jewellery products etc. There are startups sprouting up in this space but they still have a long road ahead of them.
Even though big brands like Amazon and Flipkart sell precious jewellery, it is a difficult task for them as the buying behaviour of customers is different when they buy precious jewellery as opposed to them buying a mobile or some other product.
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. With the growing Internet penetration and the advancement in technologies like 3D printing, the manufacturing process can be made a lot faster.
Shopping experience problem
Most customers who do wedding shopping boast of shopping for jewellery from nearby cities because they assume bigger cities have better collection of designs. This holds good in most cases as people from all over Tamil Nadu head to Chennai in order to buy jewellery. It really is an expensive and time-consuming process; sometimes both the bride and groom’s families travel to major cities, spend money on food, and taxi etc., to shop for jewellery.
Is there a solution for this? How about giving a Google Glass to the salesperson and build a platform for retailers so that when customers want to shop jewellery they can sit at home in front of a tablet or a TV (connected via ChromeCast or AppleTV) and do virtual shopping. This will give a seamless one-to-one experience of jewellery shopping. But, is it scalable?
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.
With the infrastructure as service (read: cloud technologies), there are many companies over the globe tackling the ‘render’ challenge. However, this is new in the jewellery space and anyone starting this could gain a pretty good market share.
Small brands’ standing out problem
Because of big brands in the block, mid-sized retailers will start facing an existential threat. Brands always stock updated designs and compete on price, making it very difficult for mid-sized retailers to survive. If there is a platform that could send latest designs to the retailers directly from manufacturers, it could solve the issue. The problem lies in distribution and logistics. Most of the transactions in India happen with cash so it is important to find a solution that will be convenient for everyone.
Who’s doing what?
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 and are shutting down too soon. Unless the brand differentiates or solves a real problem, it is difficult to sell online. Funded startups like Bluestone and Caratlane are easing the buying-and-gifting problem. But these kinds of products accounts for less than five per cent of the entire jewellery available. So how to distribute the remaining 95 per cent products online?
However, brands like VelvetCase and WearYourShine are building marketplaces to help offline retailers sell online. This to a certain extent addresses the problem of the remaining 95 per cent products. Typically, sales happen where there is ease-of-buying-and-gifting products. WearYourShine recently announced that people could buy online on its website and return it in any of the 40 retail outlets it already has.
Niche brands like AuGrav solve the personalisation/customisation problem in gold jewellery and KuberBox, solves it in designer diamond space. 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.
(Disclaimer: The opinion expressed in the article are those of the author and do not represent the views of YourStory in any manner.)
About the Author
Vivek Krishna is the Founder of AuGrav.com, a startup in the personalized jewellery space. Vivek was the second employee of GeneralSentiment, a sentiment analysis big-data platform based out of New York. He has vast experience in tech and the rich domain knowledge in the jewellery industry, which led him to start in this space.
Image credits: Shutterstock
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