India 2012: Loose diamonds/jewellery retailing hub

Update 20/3/2010: We have launched India's First hybrid model of diamond retailing by an independent jeweller. Its a momentous occasion as we are living a dream we have talked about in this very post. Find out more here.

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This is the second post in the Blue Ocean Opportunities in Indian gems and Jewellery sector series. My first post is here.

This post has various inspirations. Medical tourism, e-commerce and sramana mitra's posts on India 2020, a query from a finnish visitor to our blog, india's unique position as a diamond processing hub. I know it looks like the opening of a thriller from a future Tom cruise's science fiction movie. So hold on to see the outcome.

For all the naysayers who think Internet is still in its infancy in India, this can be a perfect antidote. An e-commerce initiative not just for Indians but the whole world visiting India.

Imagine a certain Mr. Hakkinen from Finland plans to pop the question with an engagement ring. He logs online and chooses from thousands of diamonds online before settling for a 1.5 carat , asscher cut, fancy yellow , SI2, ideal cut . Not just that , he also orders a setting /style of the engagement ring. He chooses the delivery option of faraway India. No his girlfriend is not Indian, infact, He is visiting delhi for a business trip and plans to mix some personal shopping with it. As he chooses New Delhi airport among various options within the city for the delivery of his ring.

At the New Delhi airport which has been upgraded for the recently concluded Common Wealth games in 2010, he walks into a swanky store to pick up the ring, gift wrap it and also the diamond certificate that comes with it.

Mr. Hakkinen is assured of the best priced diamonds in the world. Thanks to india's dominance in polishing 90% of the world's small diamonds. India enjoys a crucial position in the world diamond supply chain. With 9 0ut of 11 diamonds in the world polished here. These diamonds are then shipped everywhere in the world. Mr. Hakkinen knows this and thats why no other international site (bluenile.com, abazias.com or amazon.com) offers to deliver loose diamonds or their jewellery in India. In fact the diamonds are priced at atleast 20% less than these websites. Enough to pay back for the airlines ticket. And at the heart of this reasoning lies the logic of making that purchase.

This can be a reality for millions of visitors coming into India as tourists, business persons, patients etc. In each of these cases a trip to India can be redeemed for more.

Related Articles:

Blue Ocean opportunites in Indian Jewellery Industry

Jewellery shoppers: Beware of these 5 pitfalls on Ebay India

A newspaper story and a couple of blog mentions caught my attention and I thought I will chip in with my thoughts on this.

The newspaper story that ran in ET about ebay selling 1 product a min and the most selling category online is jewellery must have certainly frowned a few brows. Ebay sells a jewellery piece every 7 mins, more than any other category including cellphones, cameras, coins, stamps etc.

That is definitely a shot in the arm for the entire e-commerce industry in India.
But before you jump with both feet in it. Here are a few things you need to look for when shopping online at ebay India.

1) Home grown certificates for diamond authenticity.Most of the sellers on ebay provide their own certificates for the authenticity of diamonds. There isnt any standardized GIA, EGL certificates offered. which means these certificates dont hold water when you go selling them offline.
2) There is no true exchange/refund. Online shopping entails making a purchase decision looking at the pictures provided by the seller, which are often not so good quality. When a user is not satisfied with the actual product the return costs the consumer 10%- 25% or more as 're-stocking fees'. I found a seller which claimed - 100% satisfaction guarantee and yet had a 20% restocking fee if the item was returned.
3) The gold purity is 14K in most cases. Offline stores rarely sell jewellery items in 14K. This translates into good savings.
4) None of the jewellery is hallmarked. There are studies published by BIS on the prevalent purity of most gold items sold offline. Why cant the same happen online?
5) Adjectives like "full cut" and "premium white" describe the quality of diamonds.When internationally its an accepted norm to use the 4Cs namely cut, colour, carat and clarity.

These are early years of ecommerce in India and the biggest draw of online commerce has been the low prices. So the consumers are throwing caution to the wind and not asking as many questions as they would ask the offline stores. Both consumers should start asking for more and sellers should be prepared to offer more as this mode of shopping has to gain mainstream acceptance.