Growth in the global jewelry market is being fueled by the shift to e-commerce. According to
Research and Markets
, the global jewelry market is expected to reach $257 billion in 2017, and grow at a rate of 5% per year over the next five years. While the online fine jewelry market currently accounts for only a fraction (4%5%) of this, it is expected to grow at a much faster rate, and to capture 10% of the market by 2020. Online fashion jewelry sales are projected to take an even bigger slice, capturing 15% of the market by 2020, according to
Mithun Sacheti, the CEO of Carat Lane
, Indias largest online jeweler, said last year that the market is growing, but its still small, as online sales of fashion and fine jewelry combined are expected to reach $150 million in 2015, while last year it was $125 million. In 2013 it was not even $2 million. This part of the jewelry market is exploding.
The online jewelry market is experiencing tremendous growth in
Asia, in particular
, where it saw a CAGR of 62.2% from 2011 to 2014. As global luxury e-commerce approaches a tipping point,
McKinsey & Company
expects the luxury categorys share of online sales to double, from 6% to 12% by 2020, and for 18% of luxury sales to be made online by 2025. That would make online luxury sales worth about $79 billion annually. According to McKinsey, this would make e-commerce the worlds third-largest luxury market, after China and the United States. Such growth has resulted in established jewelry retailers scrambling to get online and newcomers flooding into the space.
While the market is strong, moving luxury jewelry online presents challenges: established retailers must adapt their business to e-commerce and newcomers must establish credibility and reputation. For established jewelers, this means they have to adjust their operations for online sales by changing production, inventory and fulfillment processes. For the newcomers, it means they have to establish themselves as reputable jewelry retailers.
, Indias second-largest jewelry e-tailer, the biggest obstacle so far has been building trust in the industry dominated by traditional players. Some retailers, both established and new, have solved this by selling through other e-commerce platforms such as Net-A-Porter or Etsy. Others, such as BlueStone and Carat Lane, have adapted by offering a try-at-home service, similar to Warby Parkers model, where customers can select pieces to see in person at home before purchasing them.
are quickly disrupting jewelry e-commerce as they react to the needs of the space.
, an omni-channel jewelry retailer, operates on the try-at-home model as well, calling it
View On Demand
. Rather than making the large capital commitment of a full-on retail expansion, Joanne Ooi, the CEO and co-founder of Plukka, decided to pursue an innovative channel that leverages the best of both worlds. The View On Demand service allows customers to see, feel and try on jewelry before making a purchase, essentially marrying online and brick-and-mortar shopping in a unique and cost-effective way. We think View On Demand has the potential to upset the status quo in the fine jewelry industry. You can read more about the company in our November 2015
Another newcomer to the jewelry e-tail space is
Gleem & Co
, a trusted online platform that exclusively handles high-end consignment jewelry. Gleem acts as merchandiser, appraiser and photographer, and provides customer service to create a seamless, secure user experience. As a platform for buyers and sellers, Gleem creates a two-sided consignment marketplace. According to a report from
Bain & Company
, the online resale industry is expected to grow at an annual rate of 16.4%. Gleem plans to capture the $250 billion market of beautiful, high-quality used jewelry that rests in the gap between the auction worthy and the pawn shop remains, explained CEO and Co-Founder Nikki Lawrence at our
last month. The companys three co-founders have previous experience working at Gilt, Amazon and LVMH, and one holds the status of Master Gemologist Appraiser, a title held by only 46 other people in the world. The teams experience gives Gleem the level of credibility that consumers seek, and in just its first six weeks of operation, the company processed over $120,000 and secured a number of strategic partnerships.
Taking a curated approach is
, a DC-based startup that has created a unique marketplace for emerging designers. Founder and CEO Uyen Tang was inspired by the wonderful moment when someone asks, Where did you find that? Stylecable seeks to discover high-quality, independent designers and share them with the world. Think of it as a curated, luxury version of Etsy. Shoppers are able to learn about each designers story on the website, giving the online shopping experience a personal touch. The startup has also seamlessly integrated social media by incorporating a
page on its website.
Consumers are becoming more and more comfortable shopping online, which will only add to the growth of this segment of jewelry sales. Jewelry sellers are capitalizing on the opportunity in this market by coming up with innovative ways, from personalization to curation to home trial options, to address consumers concerns.