Source: The Hindu BusinessLine
Published on 7th April, 2014
Well-defined differentiators, long-term customer relationships and brand building are vital
In past editions of Start-up Island, perspectives have been shared about the glut of online businesses. There is a need for strong differentiation and well- thought-out value propositions among e-commerce initiatives sprouting in India today. What is good to note is that online businesses are beginning to focus their services around what their target customers need.
Two key aspects of consumer behaviour to consider for e-commerce to work in India as it does in more mature markets are: customers buying (why or why not?) and, if they are buying, what do they tend to buy? Beyond this, it is also important to tailor platforms to educate and enable consumers to make better choices while buying online. Thinking on these lines at the outset ensures that consumers feel better about shopping online than in conventional ways. But what does it take to stand out as an online business?
Gaurav Singh Kushwaha, CEO & Founder of BlueStone, kick-started operations as an e-commerce initiative in March 2012. BlueStone sells jewellery online.
It seeks to provide the family jeweller’s customisation capabilities with the ease that technology brings. Customers can look at samples of gold and studded jewellery on the website and ask for their own personalised or made-to-order designs.
It’s just-in-time manufacturing, and of affordable jewellery. ‘Affordable’ because BlueStone hedges itself against certain rise and fall in gold prices — it only manufactures to orders ensuring raw material and production lines are managed better. “Phones, books, and other goods were already being sold online. Jewellery was a segment shielded from horizontal players in the market. We decided to take an end-to-end approach as opposed to just retailing. In our made-to-order model, we’re able to plan our cash properly, keeps our costs down, and keep it lean all the way,” says Kushwaha.
BlueStone received funding of $5 million from Accel Partners and Saama Capital before beginning operations.
In a recent series B round, with Kalaari Capital as lead investor, BlueStone received $10 million.
Vani Kola, Managing Director, Kalaari Capital, says, “It is always important for us to see that an entrepreneur strives to make every single customer experience unique. Then whether consumers want to buy the product is still a key question. “We spent a lot of time evaluating BlueStone. We liked the thought of the Indian woman, for example, having an experience choosing what she wants to wear in terms of style, the idea of everyday fashion being customised for her and a certified product delivered.”
BlueStone has a customer base of 50,000 buyers and averages ₹35-40 crore annual revenue, notwithstanding seasonal fluctuations. Kushwaha believes that India is an underserved market when it comes to jewellery brands and is looking at spending some of the recently-raised capital on building the BlueStone brand. “So far, we’ve worked heavily on educational content on our website, including enabling chats and access to customer service phone-lines to help customers understand various aspects of jewellery buying. Now comes the challenge of creating a trustworthy brand. “We have a billion dollar opportunity ahead of us and it could realise in four years or a little more,” declares Kushwaha.
Kalaari Capital’s Vani Kola backs that up with, “The company has great potential to go public. I would hope that they become a ₹1,000-crore company in 3-5 years, but as long as they are profitable we’re not worried about exits too much.”
For any start-up, investor confidence can be taken as one proof of success. But nothing works better than the consumer’s trust — in time, then, more people in India will be buying online.
Source: The Hindu BusinessLine