Titan pins its hopes on digital

With its Caratlane acquisition, the company looks to leverage the trust of its flagship brand Tanishq to break into the growing online jewellery market

Gaurav Kushwaha, founder and chief executive officer of Bluestone, one among India's burgeoning breed of online jewellers, is enthused by Titan's acquisition of rival Caratlane. While many may see this as a relief at the prospect of one less competitor in the country's small but growing community of online digital jewellers, Kushwaha says it is the Tata group's entry rather than Caratlane's exit that has him in good spirits. He believes, like many others, that with the Tatas getting serious, more consumers will place their trust in the online jewellery market. And their presence online will bring heft and muscle to the business, which is still a drop in the branded jewellery ocean.

Trust will also be a key factor for Titan as it looks to build its online presence. Bhaskar Bhat, managing director of Titan, has said that the focus is on taking Mia, the first sub-brand that Tanishq launched in 2011, on to the digital platform apart from the existing Caratlane line-up. Mia is a workwear jewellery brand and has been projected as a label of choice for young, outspoken and trendy women; one that is also light on their pocket.

The brand is also being sold on Myntra, the fashion e-commerce hub of Flipkart.

Titan will also be keen to build an online presence as its jewellery business has slowed down in recent years. For financial year 2015-16, income from the jewellery segment saw a decline of 7.6 per cent for Titan. With Mia, the brand seems to be targeting the urban buyer who trusts the Tanishq brand for its purity, but is still on the fence about buying her jewellery online. It is here that the new acquisition will play an important role.

"In the jewellery business, whether you are online or offline, you have to do about Rs 300-400 crore in a three-year span. This is a vast market. When you are bringing the novelty that Caratlane brings, hitting Rs 400-500 crore mark is not a problem," says Bhat. But did Titan need another brand to build its digital empire?

"Caratlane is a pure jeweller in the online space. For us, to reach the level of sophistication in terms of technology would take a few years. This for us is very good… we have two brands, leaders in their respective places, both offline and online," says Bhat.

  The association is expected to increase the volumes sold online. This is on the presumption that there are many potential buyers who would ideally prefer to purchase jewellery with the click of a mouse, but are held back by their inhibitions about these products. With Titan's Mia, the company is banking on transference of customer loyalty from the physical stores to the digital marketplace.

"There is apprehension among customers about buying online. Is it really jewellery?, Can it be trusted? So building a brand is very essential," says Kushwaha. The online marketplace is particularly confusing because it comprises a small band of e-jewellers and a large number of homegrown brands that use the e-commerce platforms provided by Amazon or Flipkart.

"With Tanishq, there is a trusted brand. It will create more awareness among customers to buy online," says Kushwaha. Tanishq sells around Rs 30 crore a year online. This is a mere 1.5 per cent of the Rs 8,000-crore the brand sells at its stores across India and overseas. Industry estimates that less than Rs 1,000 crore worth of jewellery is sold online in India. The overall domestic e-commerce market is valued at Rs 66,000 crore.

A clutch of jewellery startups are in play today, of which Caratlane was the biggest player. It was innovative with its business model, it worked with near-zero inventory levels and kept its operations lean. Another major player is Bluestone, a vertically integrated player that counts Ratan Tata among its investors. Jewelsouk and Joharishop are other online players but they have adopted the marketplace model.

"The onus of getting people online and buying is on us and Tanishq (with Caratlane acquisition). We are the only two serious players," says Kushwaha. Bluestone, which does not disclose revenue numbers, says customers on an average purchase jewellery valued at Rs 25,000 on its site.

While large e-commerce marketplaces such as Amazon and Flipkart have jewellery sold on their platform, pure play jewellery e-commerce marketplaces such as Joharishop are hoping that their platforms could get more traction as customers get over their apprehensions. For Bluestone, the traditional e-commerce marketplaces have not yielded the business that it had anticipated. "We are there. We are not too bullish on that. There is hardly any transaction happening," says Kushwaha. The entry of Titan, everyone hopes, will help. "Jewellery is one area that no single player has cracked. It is evolving and the opportunity is huge," says Ankit Banthia, co-founder of JohariShop. Can the Titan-Caratlane combine light up the digital space?