Adapting to the new digital world
Retail is one of the few sectors in India which has been showing promising signs of digital innovation and when it comes to selling merchandise through the online medium, gems and jewellery is one of the fastest growing segments. Point by point, Bhavana Jakhia explains how e-commerce is not just a better bet over a physical store but also why it is here to stay.
E-commerce will facilitate small to medium businesses to start an e-commerce website and with that, people from tier II and tier III cities of India will be able order jewellery from exclusive boutiques and brands that only have outlets in major cities. They can order trendy and latest collections from cities such as Mumbai, Bangalore, Delhi, etc. Moreover, e-commerce enhances transparent transactions and thus, making for fair practices.
E-commerce has changed many folds in the last few years. Customers have gained confidence in buying jewellery online, as relevant and detailed information is provided by the sellers and brands. Whether it is the description of jewellery, an option of selecting quality of diamonds, selecting gold-colour or upgrading the diamond size, all this is just a few clicks away.
Major consumers, who are buying jewellery online, are the young millennials who have found comfort in technology and apps. The generation who are in the early 30s have also adapted to the use of net and have started making online purchases. They are gaining confidence and are ready to experiment now with buying luxury items like jewellery online.
Key challenges in the e-commerce are:
Lack of Cyber Law
Though India has some rules and regulations for cybercrime, there are still many loopholes in the system. The only way to try and resolve this is by integrating a good payment gateway system which can help in controlling frauds. The customers also have to be vigilant and take certain precautions for themselves.
Taxation on goods
India is very sceptical on paying certain taxes on goods especially on jewellery. The rule states that anyone purchasing jewellery over Rs. two lakh must give a PAN card or passport if paying in cash but the customer may not be willing to do so which creates issues. But in the e-commerce, anything above Rs. 50,000 has to be paid through a bank transfer or by credit card which helps e-commerce in ensuring transparency.
Language can be a problem for certain tier III cities of India. The rural villages have started using e-commerce to order goods but certain people who cannot read or write English, may not be able to use e-commerce website. The way we can help such people is by giving language options on the website. This step will also help customers connect with the e-commerce platforms better, thereby boosting sales and expanding customer-base.
Here are the four major plus points of an online business compared to a brick-mortar store.
Online business are cheaper to start, as you can even manage it from home. There is no rental cost of property. Plus, utility bills are also lower compared to have a shop. The number of employees needed for running an online store, as compared to a physical, will also be significantly less. If in a physical store you need 10-12 staff members, then for the same online business, you will require just 2-3 people.
You can easily add, delete or replace a product online. Even the price of the products can be changed in a few clicks. Just login to the stores backend from wherever you are and at whatever time you wish to, make the necessary changes in the given fields and within a minute, it will reflect on your online store. But to perform the same task in a physical store, you may have to devote a few staff members as well as it may require a lot of time.
It is easy to perform online marketing for a web-store. Customers can not only see your products online but also buy them at once. In case of a brick and mortar store, online marketing communication may reach a potential customer but the conversion is challenging if the customer is based in another city.
Over one billion customers use the internet in India. All these people are your potential customers. But in a brick-and-mortar store, your reach is restricted to only a geographical location. E-commerce has helped Indian GJ industry to tap overseas market. People from international locations are able to access current trends in India and then, buy jewellery from India brands. The access has become easy for overseas customers but in terms of demand, brands still have a long way to go.
Five years down the line online jewellery businesses will be at its peak, as the newer generation of people will be more involved and comfortable with e-commerce buying. Brands would have earned the confidence, built a loyal customer base and the customers would have hopefully seen the benefits of online purchases.
(The author is Head of Digital Ventures at Om Jewellers)