 "<b>Lunch with BS:</b> Gaurav Singh Kushwaha, founder, Bluestone")
When your closest rival is from the stable of India’s most trusted jewellery brand, it is not easy to feel confident, but Gaurav Singh Kushwaha, founder of BlueStone, an online jewellery firm, says a competitor like Tanishq, the Tata Group jeweller that own’s CaratLane, is good for the online ecosystem. “The game is to change the buying behaviour of consumers. When only 0.1 per cent of the overall industry is buying online, it doesn’t matter that you are half the market. I think two people can do a better job than one,” says Kushwaha over a buffet lunch at the Le Jardin, the all-day restaurant at The Oberoi, Bengaluru.
The business hotel located on M G Road is decked up for Christmas. Kushwaha is also celebrating: He became a dad to a baby boy 15 days ago.
BlueStone is his second entrepreneurial venture. After a stint with Amazon, Kushwaha joined his colleague, Nitin Rajput, to start Chakpak, a Bollywood-focused site modelled on IMDB, the movie database owned by Amazon. He had got exposed to the way Amazon was playing the internet game and thought it could be replicated in India. Chakpak had over five million monthly page views, a good number, but making money in a content business was still not easy. In 2010-11, he closed down the website, sold the digital catalogue to Flipkart and the site to content firm Trivone Digital Services, which had a common investor Accel Partners, and focused on e-commerce.
“There was a certain maturity I had as an entrepreneur. I knew the way companies are built and how money flows into the system. E-commerce will be the first leg that the internet economy will stand on; then companies that support commerce; and the third layer would be content-driven companies where the revenue model is indirect,” says Kushwaha. He started BlueStone in 2011 with Vidya Nataraj, a former head of music at Landmark who now runs Tailorman, an online bespoke men’s wear firm. He got funding from Accel, Meena Ganesh and Saama Capital to start the company. The partners split due to differences and Kushwaha has since been running the firm with a team of 350 to 400 people. Last financial year, the company earned Rs 125 crore in revenue and is expected to double that to around Rs 250 crore this financial year.
The government’s demonetisation exercise has impacted sales by around 15 per cent, but Kushwaha, like most internet entrepreneurs in Bengaluru, is in favour of the idea, pointing out that execution has been botched up. In the same breath, he argues that execution is always a challenge — for any organisation, more so in a country that has an entrenched bureaucracy and a banking system that is struggling to scale. As we munch on our starters — hara-bhara kebab and chicken tikka, Kushwaha says he believes that as Indians increasingly use digital payment methods, more people will join the formal economy and taxes generated would be used for upgrading infrastructure. “We talk about standing in a queue for half an hour or one hour, but every day we waste 40 to 50 minutes in traffic also,” says Kushwaha, who took a 90-minute ride into the city for our lunch.
Halfway through the conversation, he gets a call from his wife Arpita to book an Uber cab — she has been unable to hail a taxi on her phone. He makes the booking on his smartphone but has to explain the route to the cab driver first and then inform the security at his gated community to allow the cab in. Kushwaha owns a car, but his preferred mode of transport has been Uber cabs, which among other things, allows him time to read the latest in sci-fi and artificial intelligence. Most start-up founders in Bengaluru prefer “Ubering” or use its rival Ola to move in the bumper-to-bumper traffic in the city, he says. It is also a cool conversation starter. As I pause the recorder to head for the buffet, Kushwaha asks why I wouldn’t use a smartphone to do the same task.
Kushwaha, a light eater, picks up the salad. I take a few helpings of some vegetables, a bit of curd rice, vegetable biryani and a spoonful from a spinach-based preparation. Back at the table, Marty, a restaurant host, asks whether we need bread to go with the vegetables. Kushwaha picks butter roti.
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I am told women prefer imitation jewellery to match their dresses these days, I say. Is that true and how does it impact his business? Kushwaha says the bigger impact would be on traditional jewellery as BlueStone produces designs that is for everyday wear. “That is one trend, which is being missed by every other jeweller. What we are trying to do is to blend both the worlds.”
“You are okay with imitation jewellery before marriage or when you are in college. Once you arrive in the world or get married, it is not cool,” says Kushwaha and tells me about the ordeal one of his investors returning from the US had to face. She was asked why she was wearing artificial jewellery when she could well afford the real thing! “In the long run, trends change. We have a much better offering than traditional jewellery — design is the reason why people buy from us.”
BlueStone offers more than 5,000 designs all created in-house. It has also created a special alloy to reproduce them so that they can be shown to customers at their homes. The final orders are delivered in three to five days. Kushwaha says he has little inventory — around Rs 40 lakh worth of gold and diamond to turn in Rs 250 crore of business (the stock is for immediate needs, the rest he can buy from the market in a day). An offline jeweller, in contrast, would need inventory to the tune of Rs 100 crore to turn in Rs 160 crore in the same period, he says.
In 2013, he started manufacturing jewellery using 3D printing after facing “reliability issues” with its manufacturing partners. “So we decided to do it on our own. If we get into manufacturing, we would have control over the delivery, over the end-to-end experience of the customer,” he says, pointing that it is a long-haul game to build an online jewellery brand. “That means, slow growth — actually very slow growth.”
Marty comes with another helping, Kushwaha picks one roti and says that these days are nowhere like the rapid e-commerce growth of the past few years when firms grew rapidly offering discounts. They found themselves in a spot when funding dried up. “It doesn’t happen in the case of brands; they don’t get built in a day and don’t get wiped off in a day,” says Kushwaha, who grew up in Kota and was among an early batch of students at Career Point, the education company. After passing out from IIT, he joined Tavant Software before shifting to Amazon.
As the name Amazon crops up, we shift our conversation to the demand for protection by Bhavish Agarwal of Ola and Sachin Bansal of Flipkart. Kushwaha says yes, there has to be a level playing field, but then he doesn’t know what the solution should be. “As a country, we need to protect, but people who are responsible for those companies, they have not built enough moats or defences,” he says.
“I still don’t agree with the statements of Ola and Flipkart founders when they say we are being hammered/hounded by competitors like Uber and Amazon, so make it a level playing field. It is not a wholesome argument,” says Kushwaha. He points to the “double standards” of players like Flipkart, who initially supported the Airtel Zero plan, “which would have ended up creating an uneven playing field for start-ups”.
Kushwaha says India needs to invest a lot more on technology such as artificial intelligence to understand trends that could impact its people. “Otherwise, you might be blind to the tsunami that is waiting to hit,” he cautions.