India’s jewelry industry, traditionally reliant on in-person purchases, is witnessing a significant shift towards e-commerce.
According to CLSA Asia Pacific Markets, the online retail market is expected to reach $22 billion by 2018, prompting established jewelers to expand their digital presence.
A report in Mint stated that Gitanjali Gems Ltd, India’s largest diamond and gold jewelry retailer, anticipates online sales to constitute up to 20% of its total sales within two to three years, a substantial increase from the current 1%.
This growth potential has attracted notable investors, including Ratan Tata, who invested in Bangalore-based online jeweler BlueStone last year.
Major jewelry retailers are forming partnerships with e-commerce giants such as Amazon, Flipkart, and eBay, capitalizing on the Indian government’s relaxation of gold import restrictions.
Gartner Inc. estimates the total online retail market in India will reach $6 billion this year, driven by free delivery and significant discounts.
Per the report, Mehul Choksi, chairman of Gitanjali, acknowledged the changing consumer behavior, stating that while Indian consumers traditionally prefer to examine jewelry before purchasing, this shift is occurring rapidly.
Gitanjali now retails through various online platforms, including Amazon, Flipkart, eBay, and Jewelsouk. According to BlueStone estimates, the online jewelry market is projected to reach $2.5 billion within the next five to ten years.
The report added it represents less than 0.1% of India’s $55 billion jewelry market.
India’s demand for gold jewelry reached 662 metric tonnes in 2014, valued at $26.9 billion, making it the world’s largest consumer.
The World Gold Council predicts bullion demand will expand to between 900 and 1,000 tonnes this year.
The digital marketplace allows companies to offer various designs without maintaining physical inventory.
The report stated that Rajeev Sheth, chairman of Tara Jewels Ltd, attributes this shift to changing consumer behavior, particularly among young Indian women exposed to global trends.
To build trust in the online jewelry market, companies like BlueStone and Caratlane have introduced innovative services such as home try-ons, allowing customers to examine products before purchase.
The report noted that as traditional jewelers adapt to the digital landscape, the Indian jewelry market is poised for significant transformation, blending centuries-old traditions with modern e-commerce practices.
