Building India’s Blue Nile: CaratLane CEO Mithun Sacheti (Part 6)

Sramana: Essentially you are walking a tightrope with your messaging. People need to know that you have the best price, but they can’t be perceived as being cheap for shopping at CaratLane. Is that fair?

Mithun Sacheti: Yes. I think we will hit the best price solely because of the number of vendors we have. That is why we can [send a] message on education and quality then talk about our reduced pricing due to our efficiency as a company. The product maintains its perception of quality and status this way.

Sramana: How has the diamond market evolved in India between October 2008 and October 2012?

Mithun Sacheti: Let me break the business into two parts, solitaires and jewelry. When it comes to solitaires, there are six other companies that play in this field right now. They have gone to market at the five times or seven times the level of where we were in 2009.

If you look at the jewelry side of the business, in 2010 there were five players in this space. This year we have seen another 15 companies join it. Everyone sees opportunities in jewelry. This is an easier space to enter than the solitaire space because there are so many roadblocks over there. The supply relationships and value propositions are more difficult there.

Sramana: How many consumers are buying solitaires online?

Mithun Sacheti: I don’t have data available outside of our business. Last year we sold 3,000 solitaires. Some people buy pairs, but that still represents around 2,000 customers.

Sramana: So, the total number of people buying diamonds online is probably fewer than 5,000.

Mithun Sacheti: I don’t think that all of our competitors combined sell more than 1,000 solitaires.

Sramana: How about the jewelry side?

Mithun Sacheti: That is very difficult to estimate. There are a lot of Indian jewelry companies online, and we don’t know their numbers. EBay claims to sell a piece of jewelry every four minutes, but they sell jewelry that we would not even classify. We had about 12,000 customers purchase jewelry online last year. I would assume there are around 75,000 to 100,000 people who are customers in the space.

Sramana: No matter how you look at it, there is a lot of headroom in this marketplace. There is plenty of room for growth in this marketplace.

Mithun Sacheti: Absolutely. The potential is exciting.

Sramana: I assume you use cash on delivery?

Mithun Sacheti: We just started. It was one of the toughest things we have had to figure out. Jewelry is risky to do cash on delivery. Until now we did credit cards sales. We just started cash on delivery a month back, and we do not do cash on delivery for diamonds.

This segment is part 6 in the series : Building India's Blue Nile: CaratLane CEO Mithun Sacheti
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