Realizing the huge potential of online retail in India and using his background/experience in jewellery and diamonds, Mithun Sacheti laid the blueprint for CaratLane.com. His vision of selling solitaires and diamond jewellery over the internet was shared by a man whose expertise lay in a complementing area. With Srinivasa Gopalan, Mithun started CaratLane.com in 2007, with the site going live in 2008. From then, it’s been a journey of crossing milestone after milestone! Iamwire interacted with Mithun, talking about his company’s vision and future strategy as well as the key challenges that he has to face in his business. Here are the excerpts:
1. When was CaratLane started and by whom? What is the vision behind the company?
CaratLane is the realization of a dream to change the way diamonds are bought and sold inIndia. Set up by Mr. Srinivasa Gopalan, a seasoned entrepreneur in information technology and Mr. Mithun Sacheti, the scion of Jaipur Gems. We launched in October 2008 with the aim of offering a smarter alternative to buying diamonds and jewellery to consumers in India.
2. Why did you choose this business model and category?
Our key strengths are our global sourcing model as well as our knowledge of diamonds and jewellery. We specialize in solitaire diamonds, studded jewellery and gold coins.
Sourcing from over 4000 suppliers across the world, Caratlane offers the widest range of over 120,000 certified solitaires. Through a virtual-inventory model and by avoiding retail rental costs, we are able to pass on savings of up to 25% to consumers, compared to retail prices.
3. What is your USP and differentiators from your competition?
CaratLane jewellery differentiates itself through its design philosophy, catering to the refined tastes of the Indian consumer with a global outlook. Our brand is now associated with various design innovations around social and cultural motifs and contemporary style. We have in-house designers and our own manufacturing facility. This allows us to be quick to market with new contemporary designs for jewellery, while maintaining strict control on quality and finish.
4. What are the various marketing channels used by CaratLane? Any non-conventional strategies? What is the role played by social media in building your brand and attracting new business?
We leverage a number of digital marketing channels such as Paid and Organic Search, Banners, Email etc. We are also very active in social media such as Facebook where we have an active community of jewellery enthusiasts who engage with us on jewellery designs. We regularly share offers and previews of collections with this community.
We also encourage customers to rate the products on our website, write reviews which are available publicly. This helps to build credibility with potential customers.
One key innovation has been the recent opening of the Solitaire Experience Lounge inDelhi. The Experience Lounge brings the experience of online shopping in the retail environment. A customer is able to speak to our diamond consultants in person, can browse through our collections, and when ready, can place their order online.
5. What has been the repeat purchase behaviour of consumers and what are some of the ways that you have been able to bring down the customer acquisition cost for CaratLane?
Over 30% of our transactions are from repeat customers, despite jewellery being a category which customers don’t purchase very often. We regularly communicate with our customer base, giving them previews to our new collections, offers as well as invitations for exhibitions that we do.
6. How do you enhance customer experience at your site? What role does technology play in the same?
Improving customer experience is an ongoing process that should never end. We are constantly attempting to improve our website, as well as the experience of the customer beyond the website (e.g. through chat, packaging, delivery etc.). A key part of the customer experience on the website involves high quality product images.
This is critical because the customer does not have the opportunity to touch and feel the jewellery before buying. So we have a big team of designers who shoot and develop these high quality product images for displaying on our website. We are also in the process of integrating virtual makeover technologies that can help a customer see what they would look like if they were to wear any of our jewellery.
7. What are the investments made by CaratLane in various processes, such as technology, logistics, inventory management etc. and how do you monitor quality checks and control?
We have invested in our own design team and manufacturing facility. We are continuously investing in tools, technologies and people that can help us become more operationally efficient and also provide a great customer experience. All our jewellery is certified by external labs, and we have stringent internal quality checks for every piece of jewellery that we ship out.
8. What is the demand pattern in terms of geography and is it skewed towards a particular region or segment?
About 60% of our sales come from the top 8 cities, which is probably the norm for eCommerce inIndia. What we find is that a number of inquiries and sales from the Tier 2 and 3 cities are for products that are not easily accessible to them.
For e.g. Jewellers in Tier 2 and 3 towns don’t have much to offer in white gold jewellery. Ecommerce helps to provide access to such customers.
9. What are your revenues for the previous year? What has been your growth pattern? What are your marketing spends? What is your cost of revenue?
We clocked revenues of approx Rs.50 crores last year and are targeting Rs.150 crores for FY13.
10. What are some of your key challenges in the business and how do you plan to resolve them?
Online jewellery is a fairly nascent category inIndia, and the key challenge is to establish online as an option that consumers should consider when they plan to buy jewellery. Trust plays a key role in this, and we have to take a number of steps to establish the trust factor among consumers.
Our zero-inventory model allows us to offer unbiased advice and consultation to consumers who are looking for solitaires. All our products are certified from internationally reputed labs, and we take utmost care during shipping using tamper proof packaging. Jewellery is fully insured during transit. We use SSL technology, the most widely used data encryption coding system for secure e-commerce transactions.
11. How many employees do you have and what are some of your Human Resource challenges?
We are currently a team of 80 people and growing every week. From an HR point of view, our endeavour is to make CaratLane one of the best places to work, so that we are able to attract the best talent.
Even though we are fairly young and small, we have invested in setting up HR processes and intend to provide fulfilling and challenging career growth to every employee.
12. Given the current state of affairs, what is your outlook about the market and your company’s long-term prospects? Do you see any major hurdle that may derail growth?
We are very confident about the potential for eCommerce, specifically in the lifestyle and jewellery category. More and more consumers inIndiaand around the world are adopting online shopping for the convenience, range and value that they get, and our customers give us the same feedback.
Local logistics providers are also recognizing the opportunity in eCommerce and are developing logistics solutions that are customized for the needs of the eCommerce industry.