E-Commerce Opportunities for the Gems and Jewellery Industry

E-Commerce Opportunities for the Gems and Jewellery Industry - Reduce Marketing and Selling Costs, Tap New Markets
E-commerce has transformed traditional business channels for many industries, gems and jewellery being one of them. The Gems and Jewellery industry lends itself perfectly to E-commerce.
A consumer can look at magnified images of jewellery pieces on his or her laptop, compare jewellery across three to four stores and have the jewellery delivered to his or her doorstep.
The advent of online jewellery shopping would have brick and mortar companies worried. However, for the industry as a whole E-commerce implies exciting new opportunities.
It would not be incorrect to state that E-commerce would increase total volumes of sale for the industry. However, the benefit will be enjoyed by those players who can understand online channels of business and use them to their advantage.
Business to Business (B2B)
Most of the electronic commerce that takes place today is of a business to business (B2B) nature. B2B simply implies that both seller and the buyer are business corporations. B2B portals are gaining popularity in the Gems and Jewellery industry. Its benefits are unmatched by traditional business channels.
Advantages of B2B
The Gems and Jewellery supply chain is spread across different regions and it is controlled by a few big companies, thus it is a major cause of concern for most companies. However, B2B portals can be used by a jewellery company to reengineer their supply chain.
Supply Chain Solution
From the buyers’ point of view, B2B medium can be used to procure supplies from a supplier who can offer them at the most competitive price. More importantly the purchasing company does not have to over depend on just a couple of suppliers as he can search for other suitable suppliers and avoid a supply crisis.
Lower Costs
Sourcing goods from a B2B portal eliminates middleman costs. It provides an environment for business houses to negotiate trade agreements directly.
More importantly B2B is a faster and more efficient medium to transact. Average turnover time for business transactions over the internet is much lesser than traditional means. Finally, it allows you to enjoy JIT just in time delivery; the company can keep track of his goods as to where it has reached.
Reduced Selling and Marketing Costs
A business to business portal is a very effective medium for marketing. A Diamond company for example can list all the stones he wishes to sell with images and relevant grade details. The website is visited by prospective buyers, hence the perfect target audience.
He enjoys the option of selling his diamonds to highest bidder. Thus a B2B portal is a highly effective medium of marketing and selling your inventory.
Business to Consumer (B2C)
An online Business to Consumer medium of E-commerce is known as B2C E-commerce. E-retailing as it is more popularly known has emerged as a growth channel for jewellery retail. In 2005, the United States which is the largest market for jewellery in the world witnessed a 25 per cent growth in retails sales through online B2C channels. In dollar terms it accounted to sales of USD 2.1 billion.
Online jewellery shopping owing to its inherent convenience is gaining popularity even in the Indian market. India has an insatiable demand for jewellery, according to the internet and Mobile Association of India, number of shoppers purchasing jewellery online is expected to increase by 15 to 18 per cent by the end of this year.
Revenues from E-commerce (overall) in India almost doubled from Rs 1180 crores in 2005-06 to Rs 2300 crores in 2006-07. Internet penetration is rapidly increasing in India estimated at 38.5 million today and slated to increase to 100 million by 2007-08 for E-retailers more people online translate to more potential consumers.
India with its cultural penchant for jewellery is one of the most important players in the Gems and Jewellery industry. It plays a dominant role in the processing of diamonds and is one of the biggest markets for jewellery consumption.
Organized retail accounts to only 2.5 per cent of total sales in India. However, the retail landscape in India is evolving with more companies embracing E-commerce as a channel for growth.