Indian gold buyers embrace the web
As the online retail industry in India gains momentum, it is not only urban centres that are seeing a jump in online gold jewellery purchases.
Posted: Thursday , 07 Mar 2013
MUMBAI (MINEWEB) -
Most Indian e-commerce companies active in the jewellery segment hope to double their sales this year as online shopping continues to gain traction in the country.due to the changing lifestyles of youngsters and an increase in earning power of their parents.
"During the Diwali season, we saw more than around 1,500 transactions on our website over a couple of days. This year, we are looking at hitting 3,000 transactions every week,'' said Mahesh Gupta, president of HariLal Jewellers, who owns a bullion souk in Mumbai.
He added that government or regulatory policies on gold would not help to curb gold sales or gold demand, and that most of it happens to have moved onto the net.
Going online seems to be a sure shot winner for branded jewellers in India. While at the moment, only 10% of branded jewellery sales happen online, the success and growth prospects of online jewellery retail stores has got premium jewellery brands reaching out to the world wide web.
Though India’s gold demand is largely driven by a combination of both retail and urban consumers, urban consumers are eager to raise their gold holding in direct proportion to a rise in income, be it a salaried employee or a businessman.
In the case of the rural customer too, a continuous upward revision in minimum support price of agri commodities has left more investible surplus in the hands of the farmers. Other than food and shelter, farmers would rather put down their investable surplus in gold.
Interestingly, that is where the internet is playing a major role.
Online sales, covering everything from apparel to shoes to jewellery to bags, is on the verge of touching the $659 million (Rs 36 billion) mark, with a recent research report indicating that around 24% Indians shop online at least once a month.
The report indicates that around 57% are spending anywhere between $9.15 (Rs 500) to $550 (Rs 30,000) in one go. With more than 137 million Internet users and more than 400 e-portals in India, selling everything, are set to ensure that online retail in India would grow over the 40% annual rate.
``The upswing in the industry is due to the increasing number of connected Indians who are shopping online, and the increased amount of spend each connected individual is doing on their favoured sites. Though it is the urban population that makes up most of the online shoppers, there is an ever-increasing number of customers coming in from tier-II and tier-III cities, who are also eager to shop online,'' said Jayesh Kataria, bullion retailer.
Leading branded jewellery retailer Gitanjali Group, which entered the online segment recently, saw 40% growth in online sales during the festive season.
Popular items with e-retailers are coins, small jewellery items in addition to wedding collection pieces. With 40 million unique visitors and the number increasing day by day, the online shopping market is expected to swell up to $1.3 billion (Rs 72 billion) by 2015 in India.
Currently, since 10% of this is relegated to the jewellery sector, experts believe this would easily jump to over 15% by end-2013.
What also happens to have worked in the favour of jewellery majors wishing to go online is the investor interest in online jewellery units. Online jewellery retailer CaratLane received $6 million as investment from private equity major Tiger Global in 2011, while online jewellery start-up Bluestone reportedly raised $4 million (Rs 250 million) from Accel Partners and serial entrepreneur Meena Ganesh.