Online Jewellery Market in India
Technology is changing the way people shop. Consumers are increasingly getting comfortable shopping online. They have shown faster online adoption for standardized products such as books, electronics, apparel, footwear & home décor. Although Jewellery is a non-standardized and high-involvement category, the online Jewellery market in India presents an explosive growth opportunity.
“Indian online Jewellery market is estimated at $850 Million in 2019 and is projected to grow to $3.7 Billion by 2025, at a CAGR of 28%.”
Online Jewellery Market Potential
The above chart shows a comparison of online retail and online Jewellery retail penetration for Global, US, China, and India markets.
Online retail contributed to 14.1% of the global retail market in 2019. China had the highest online retail penetration at 36.6%, compared to 10.7% for the US and 4.3% for India.
Online Jewellery contributed to 7.6% of the global Jewellery market in 2019. Both US and China had high online penetration with 10.3% and 9.0%, respectively. While India had a mere 1.2% penetration for online jewellery.
The low penetration in India can be attributed to the overall low penetration of online retail (4.3%) in India. However, India has now become the fastest-growing ecommerce market in the world. And online retail is projected to contribute to 8% of overall retail in India by 2030.
“Indian online Jewellery market has the potential to reach up to 10% of the overall Indian Jewellery market.”
It can be derived as a direct benchmark with the current U.S. Online Jewellery market. This would be equivalent to more than 8 times the current online Jewellery market in India. Although, it could take more than a decade to reach there.
Online Jewellery Penetration in India
Online Jewellery penetration in India has almost doubled in just three years from 1.21% in 2019-20 to 2.32% in 2022-23.
Online influenced retail sales is much bigger due to high value nature of jewellery that requires physical touch and feel.
Tanishq, the largest jewellery retailer in India, reported 18% of overall sales from online influenced retail sales in the fourth quarter of 2022-23.
Factors Driving Online Jewellery Growth in India
Factors driving online jewellery growth in India
There are several factors driving growth for the online Jewellery market in India. These can be broadly classified into below four categories:
1. Number of online buyers
Currently, around 20% of people in India shop online compared to 69% in the US. This number of online buyers is expected to reach 50% of the population by 2026. The evolving digital ecosystem would play the most important role in this growth. This includes an increase in internet penetration, an increase in smartphone users, and the availability of low data tariffs. Also important would be the availability of high-speed internet for faster website downloads. The logistics & delivery infrastructure (greater pin code coverage) and digital payment infrastructure (multiple payment options) would also increase the number of online buyers.
2. Number of online Jewellery buyers
The growth in the number of online Jewellery buyers in India largely depends on the number of jewellers selling online. The attractiveness of the offers and discounts and the trust of online jewellers (customer reviews and ratings) would play an important role. The detailed product descriptions, product image quality & videos, and easy returns would also help in online buying.
3. Frequency of online Jewellery transactions
Repeat online purchase behavior of customers depends on the overall online buying experience delivered by jewellers. The key enablers are timely delivery and post-purchase customer service. Additionally, a large product variety, online marketing and promotions, and reward programs would entice repeat jewellery purchase.
4. The average size of online Jewellery transactions
First time online buyers are usually more comfortable shopping smaller ticket Jewellery items. Based on their initial experience, they tend to develop more confidence in buying higher ticket Jewellery items.
Online buyer confidence can be enhanced through an intuitive and frictionless website and augmented reality technology that provides online try-and-buy experience. Jewellers can also offer live video assistance and personalized design options to support bigger ticket purchases. Jewellers with an omnichannel presence are more likely to succeed as they can offer online order and store pick-up option, and online select and home try-on options to their customers
Conclusion
Given the potential of the online Jewellery market, having an online presence is a must for every Jeweller in India.
As omnichannel customers tend to spend more, Jewellers with physical presence have the advantage to convert their offline buyers into online buyers and increase their share of wallet. They can further leverage their existing relationship and trust with customers to gain faster online traction and build a positive online reputation.
References
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