KOLKATA: Branded jewellers are tweaking their marketing strategy to cope with high rentals, thin margins and competition from neighbourhood shops that a section of the trade claims, source gold from the grey market where it is available cheaper since the 10% duty is not there.
These jewellers are tying up with etailers like Amazon, Snapdeal, Flipkart to sell smaller items that cost anything between Rs25,000 and Rs40,000, and are opening stores only for high-value products which customers want to touch and feel before buying.
"We have reorganised our retail business format to check the threat of cheap gold that enters the market through illegal route. Earlier, we had tied up with Amazon to sell our products, and now we have tied up with Snapdeal. For every footfall, we have seen that there are 100 website visits. We are selling products worth Rs5,000 to Rs25,000 through these etailers," Rajeev Sheth, CMD, Tara Jewels, told ET.
Tara Jewels is also focusing on the shop-inshop format to sell products ranging from Rs15,000 to Rs40,000. "We have 19 brick-n-mortar stores which sell high-value products whose ticket size starts from Rs65,000," Sheth said.
The company gets 15% of its revenue from the retail business in India. About 85% of its revenues come from exports and it has tied up with chains like Walmart & JC Penny to sell diamond and diamond-studded jewellery.
According to industry estimates, the online jewellery market may be worth as much as $2.5 billion in the next 5 to 10 years. Currently, it accounts for less than 0.1% of the $55-billion jewellery market.
Mehul Choksi, chairman of Gitanjali group, said they have become careful about opening new stores. "The rentals are inching up and the market isn't very vibrant. People nowadays prefer light jewellery unless there's a wedding or some important occasion in the family. We too are giving more emphasis on the ecommerce platform and shop-in-shop concepts. We have tied up with all the major etailers. Of our Rs6,000 crore sales, nearly Rs150 crore comes from the ecommerce platform — it is fast growing and will benefit jewellers as their overhead costs will come down."
Pune-based PN Gadgil Jewellers said they too have tied up with leading etailers to sell their products.
"This is emerging as a major parallel marketing model for us. In online business, there are no intermediaries which reduce our cost. The young crowd is a major buyer of jewellery through online. The ticket size is also low now but it will increase in the next couple of years," said Saurabh Gadgil, managing director, PN Gadgil Jewellers.
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