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E-commerce A Powerful Way of Doing Business
Trading directly from the company’s website has some added advantages for doing business.
By: Diamond World News Service
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Jul 1 2010 3:54PM
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Reference: 5083  

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Since the popularity of the internet and consecutively trading online in the 1990s and early 2000s, many diamond manufacturing companies in India started doing e-business or e-commerce - be it on a third party trading portal or through their own website. While most of the basic benefits of the two are the same, trading directly from the company’s website has some added advantages. Interacting with some of the big players in online trading Diamond World explores the world of e-commerce for the B2B diamond trade. The last decade witnessed the creation of a new virtual marketing system – the e-commerce marketplace, which provided a quick and convenient way of exchanging goods and services locally and globally. However, internet shopping sites like EBay and social networking sites like Facebook, Orkut and Hi5 were limited to the B2C market space. Apart from trading their goods online in various reputed online trading portals solely for diamonds, many known diamond manufacturers decided to venture into the world of trading online by setting up their own websites.

So how did it begin? Having ten years experience in trading diamonds online, Ankit Shah of Ankit Gems says, “Globalization of the world economy and the internet boom a decade ago made us realize that online trading was the need of the hour. In addition, we understood that online trade will save time and overheads and will enable us reach customers across the globe easily. As a result, we launched our website 10 years back and haven’t looked back since then.”

Citing the importance of the quick turnover of diamond inventory, and the ability of trading with international buyers 24x7, Sanjay Shah of J B & Brothers says, they set up their website, in 2003-04. He says, “It is a question of selling fast. Everybody wants goods everyday. I am a manufacturer and not a trader where every five days I purchase and then sell. As my goods are manufactured everyday, I want to sell my goods also everyday. However, buyers from abroad do not come to my office everyday to buy diamonds. Therefore, it is easy for them to buy using this system (online trading).

Recalling his company’s entry into e-commerce, Shreyans Dholakia of Shree Ramkrishna Export says, “We had a corporate website much earlier. However, we planned to make it more interactive and lively by trading diamonds online three years back in January 2008.”

According to Balakrishnan of Dharmanandan Diamonds, his company decided to sell diamonds online during the second quarter of 2008. The company’s platform with multi-tasking live stock connects with the offline shores.

Though they have been trading on third party portals for some time, Rosy Blue is a relatively new entrant to doing e-business through their own website. Explaining the reason, Anshul Mehta says, “Online trading is a new distribution channel which is fast emerging in the industry. We believe that this channel will help us extend our reach. This channel allows us to provide the Rosy Blue service and range of goods to customers who were hitherto inaccessible to us, despite our large global distribution network.”

Impact of online trading on sales

As the virtual marketplace breaks all barriers of boundaries and time, diamond manufacturers feel that the online trading has a positive effect on their sales and in turn their global business. Anshul Mehta says, “Our online business has helped us in reaching out to new customers and selling certified goods to customers in smaller quantity and on ‘cash only’ terms. It is also extremely helpful to our users, as it is almost like a 24x7 shop where the customer can come online check availability, place confirmed orders and buy only the stones which he needs, which helps the customer manage his stocks more efficiently. On the whole, online sales have helped us in our sales effort.” Currently online sales comprise 20 per cent of the total sales of Rosy Blue Group. (See graph 1 below)

Sanjay Shah says that with online trading it is now like “my office is everywhere”. When a customer wants to check the inventory and purchase the stone at any time and anywhere, he or she just needs to open the company’s website, browse for the goods, click and buy. Around 50 per cent of the company’s sales are from the e-business. (See graph 1 below)

Says Ankit Shah, “Online trading has made it possible for us to find prospective customers in each and every nook and corner of the world. It has also helped us service our clients round the clock 365 days in the year. It has solved the problem of time difference and distance. Our inventory is listed on the website on real time basis and thus it helps our customers view the updated stock at any given point of time. Also, the website has all the grading reports, plotting reports, etc which gives customers complete information of the diamonds listed, so that they are able to place an order without any hesitation. Our website has thus become a virtual office by itself which has helped increase our turnover at minimal cost, and helped us achieve a much larger and better customer portfolio.” In the year 2009-10, 52 percent of the sales of Ankit Gems merchandise was derived through online trading. (See graph 1 below)

“Online business is one of the best selling tools with enormous inventories and one window controlling stocks,” says Balakrishnan, “This helps us to serve our valuable customers with round the clock services all over the world.” While sales for Dharmanandan Diamonds are still dominated by the conventional or ‘offline’ mode of distribution, online sales amount to at least 5 per cent of company turnover. (See graph 1 below)

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