I wanted people to discover jewellery: CaratLane’s Mithun Sacheti
CaratLane’s Mithun Sacheti speaks about the jewellery start-up’s journey so far
Chennai: “A transaction can happen only after discovery,” said Mithun Sacheti, co-founder and chief executive officer of CaratLane, a jewellery start-up headquartered in Chennai. “I wanted people to discover jewellery.”
India’s jewellery obsession is well-known. According to the World Gold Council, Indians bought 662 tonnes of gold jewellery, valued at $26.9 billion, last year.
Only a small percentage of that was sold by the e-commerce market—something that online jewellery retailers like CaratLane.com, Kalaari Capital-backed BlueStone and others want to change.
The venture capital (VC)-backed companies say they offer a much superior experience—a wider variety, cheaper prices at home delivery. Now Sacheti’s CaratLane is also adding physical stores to offer customers the option of seeing and vetting products before they buy them.
CaratLane, which initially started as an online jewellery store, opened its first physical store in Chennai and tenth in India in June. Customers enter the store to soothing music being played on hidden speakers. The obligatory moustachioed security guard with a rifle is missing outside the main door to the outlet, where sleek, contemporary and finely crafted jewellery is displayed in open shelves.
“The store format is simply a complement to our online business; they are not competing channels,” Sacheti said. Both the store and the website essentially serve the same purpose: getting people to notice products.
“If you want to buy a product like a cellphone, for instance, you are clear about the sort of model you want to purchase, whether you want an android or an iPhone. There is so much information available about the product online that the shop becomes only a point of transaction,” said Sacheti, who co-founded the business with his partner Srinivasa Gopalan.
The online retail market for jewellery which, according to Gartner, is expected to rise from $3.5 billion to $6 billion this year, is still a small fraction of the overall jewellery market, leaving room for rapid growth. Online jewellers are well financed and investor appetite shows no signs of abating—for now.
CaratLane was valued an estimated Rs.750 crore when it received its fourth round of funding of $31 million from US investment firm Tiger Global Management in January. The company has raised nearly $60 million since starting out in 2008.
There were reports earlier this year that CaratLane is in talks with Titan for a stake sale. Sacheti confirmed the talks but declined to give details.
Rival BlueStone raised $16 million last month, while the likes of Flipkart, Myntra and Amazon India are also fast expanding their jewellery assortment.
Sacheti comes from a family of jewellers and is a certified gemologist from the Gemological Institute of America. He set up Jaipur Gems in Chennai in 2000.
“I started from scratch here and then set up another store in Coimbatore. We have always grown organically and it took us 7 years to build that second store. It took so long because the cost of inventory is so high,” he says.
So he decided to “put that inventory on the Internet”. This way costs were lower, he could expand faster and offer lower prices. To build trust with shoppers, CaratLane offered insurance on every product, a 30 day-long money-back guarantee and try-at-home service.
“Look, a regular jewellery store can open a 10,000 sq. ft shop but it only has one door. On the Internet, people can discover a gamut of products sitting in their own home. We don’t market crazily or advertise wildly but the traction is built because they have seen it online. And the more they see, the more they buy,” Sacheti said.
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