The Economic Times: December, 2014
Hyderabad: The fashion conscious Indian woman with higher disposable income is driving the fashion and imitation jewellery market in India. The 15 to 20% year-on-year growth in the segment with an estimated market size of Rs 15,000 crore provides an alternative for players to create an identifiable brand in a space dominated by small manufacturers. The segment which targets young women and professionals in the 18 to 35 year bracket has seen the emergence of multiple brands in the last two years. Omni-channel strategy and expansion to underserved Tier-2 and 3 cities ensures that the brands ring a bell beyond the marketplace.
"Fashion jewellery is a largely unorganised sector. Our target is to reach out tier-2 cities by retailing across 100 multi-brand outlets over the next three years. Apart from this we will set up 32 store-in-store units through our tie-up with organised malls such as Central and 20 through local mall chains over the next two years," says Vishwas Shringi. The Jaipur-based startup incorporated in mid-2012 has raised Rs 12.5 crore in funds so far and has a presence across 18 marketplaces online.
The company is in talks to raise Series-B round of Rs 60 crore to fund its offline expansion plans. YouShine which started its operations with a kiosk in a mall at Delhi in 2009 continues to focus on offline expansion in order to build a strong brand and cross-sell to consumers.
"Touch and feel is essential part of the business. We went online in 2011 and didn't see value in it then. We are now a part of all leading fashion marketplaces and set up our online store in April 2012. Presently the online channel contributes to 30% of our total sales but the ratio is likely to become equal," says Ashish Sood, co-founder and CEO of YouShine. The brand currently has 12 operational stores and will increase the number to 22 by end of 2015 and target revenue of Rs 12 crore for FY 2014-15. High margins and acceptance of jewellery in the fashion and semiprecious category makes it a profitable business.
"Fashion jewellery is a high potential category with margins ranging from 30 to 40%. The mindset has changed from jewellery as an investment to an accessory for multiple occasions in urban India. Practicality of buying multiple pieces for various outfits and safety issues is driving the acceptance of fashion jewellery among Indian women especially," says Pragya Singh, associate VP Retail at Technopak. An omni-channel strategy pursued by the sellers has led to shorter timeframes for reaching profitability, with an active interest from earlystage investors.
"Fashion jewellery is a large market and Voylla offers exclusivity in this space. It has disrupted the business model by tying up with manufacturers directly and the pieces which do not sell within 90 days are resigned to the manufacturer. The business is profitable within two years, which is not possible in a pure e-commerce model," says Apoorva Ruparel, partner at EnvoyLabs Consulting LLP, who invested in a follow-up round in Voylla.
Apart from the store-in-store models, social-selling through women's groups is another model pursued by Juvalia & You, addressing the need for touch and feel of the product.