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)
Graph 1: Online sales of diamonds (all figures are approximate)
The USP of trading from company website
Apart from the company websites for online trade and sometimes using the social networking sites to create awareness to the end user, diamond manufacturing companies also use third party B2B diamond trading sites like diamondworld.net, idexonline.com or rapnet.com. While most of the benefits including 24x7 shopping, access to the certificates, multilingual text are similar for both the trading portals and the company websites, other exclusive benefits that company websites provide gives them an edge.
So what is that unique selling point that makes trading directly from the company’s own website special?
Customer friendly services
“Diamond plotting, real time inventory, online chat support, customers wish list, add your demand criteria, matching pair, etc… are some of the customer friendly services available on our website,” says Ankit Shah. He goes on to say, “These are the main unique selling points of our website. Our prompt action on the valuable feedback from our customers has helped our website become one of the most user-friendly websites in the industry. We are acknowledged by our customers for our services of “On-time delivery, impeccable quality standards and innovative craftsmanship”.
“Majority of the stones are certified from well-known and reputed laboratories like GIA, HRD, etc. Customers will get the best manufacturer price rather than second hand sales. Lot of choices are available as per their budhet requirements. We also offer hot deals, solitaire deals, etc,” says Balakrishnan.
Quick Search and creating sub-users facilities
Aspiring to becoming the one-stop shop for all the customers’ needs and carrying a huge range of products from 25 points upwards, the entire focus of Rosy Blue’s website is on its B2B customers. The website has been designed with this perspective in mind. Anshul Mehta says, “The website offers “Quick Search”, a fast way of getting an overview of the entire stock and selecting the 4C’s in a single click. The customer can see exactly how many stones are available and the price range, before even clicking to see the specific stones. Other innovations include the facility to create sub-users, thus giving onew company to have multiple users. Customers with multiple outlets can give access to the website to its sales persons. In this case, the customer controls the markup at which the salesperson will see the stone.”
The Grading System and updated information of SRK Exports
Shreyans Dholakia says, “We offer various benefits and user-friendly features at different levels of buying to our customers. Our website contains systematic and detailed information on the SRK Grading System. It informs customers how to identify diamonds, its shape, pricing parameters, color group and much more. The main benefit is information about diamond is very transparent and thus we gain trust from customers. We also give customers up-to-date information about the company’s development and offer them occasional discounts.”
Company’s own server for uninterrupted service and J B Grading System
J B & Brothers understand the need for uninterrupted internet service for its online trading to yield maximum results. Sanjay Shah says, “We have around six to seven servers of our own. So people can buy our goods online without any interruptions and hassles. The speed of our website is quite good for the customer to browse our online inventory. Our website pages are designed in such a way that it is easy for the customer to browse the portal.” The company also has a unique grading system called J B Grading System. The system provides more details than what the normal certificate provided by any of the reputed laboratories. It is formulated to allow one to understand in detail every aspect of the diamond; these criteria are so comprehensive that you can almost visualize the diamonds without actually seeing it. This enables one to make an accurate purchase online.
The virtual v/s the real viewing of diamonds
Though online trading has firmly gained ground in the diamond industry, some questions remain in the minds of some people: Is the customer who views the inventory online satisfied with the details of the stones provided? Does he make his purchases instantly with the click of the mouse? Or does he prefer to visit the diamond manufacturer and touch, feel and see the product before making a final decision? Anshul Mehta says, “Certainly. Certificates provide information on many parameters, apart from the 4Cs. This implies that buyers are now comfortable buying stones based on these parameters and, if they so desire, viewing the certificate in a few cases. It is a huge change in the way business is carried out for certified stones. However, the trust factor still remains and buyers will buy certified based on the parameters/online certificate only from known sources.”
Sanjay Shah says that the touch and feel aspect relates more to the older generation. As the trading portal provides all the details of the stone and with a fast paced life, the younger generation as well as international buyers prefers to buy the stones directly online rather than examining the stone physically and then making the final decision. Nonetheless, at times the customers call him to get his opinion about the stone.
Balakrishnan quotes, “We feel that if you are selling genuine stone with customers’ trust then viewing certificates is the best option for selling. Genuine certificates also play a vital role during online purchases.”
Citing that certain customers bought the diamonds after verifying their certificates Shreyans Dholakia says, “Before going online, we had this experience where few of our customers were buying from just looking at the list and Certificates. And this sparked the idea in us to go online completely and since then we are really aggressive towards that approach.”
Ankit Shah has a different experience to share. He says, “The touch and feel factor of the diamond is irreplaceable as every customer would like to see and touch the diamond before he confirms the purchase. But it is not always practically possible for the customers to have that liberty because of time, distance and cost factor. Online trading has become one of the best alternatives to the touch and feel factor especially for a company like ours which has gained customer confidence and trust in terms of grading diamonds as well as a reputation as a company with excellent business ethics. Our customer along with viewing certificates online also examines our honest opinion on the diamond to be perfectly sure of what he is buying.”
A Buyer’s Viewpoint
Israel based Avi Nathanel of Fancy Collection has a slightly different approach to online trading. A great believer in doing business “person to person” he says, “The diamond business is a very intimate one and it starts and ends with people.” However, he does believe in the power of differentiation, and that is exactly what he is doing with his busisness. Avi Nathanel occupies a unique niche – he is in the business of providing his customers with a quantity of top graded stones in shapes and sizes as required by them. As a result, Nathanel uses online trading to gather his inventory. Patiently, like a connoisseur collector, he gathers his inventory over months. And then, when the right demand comes along, he sells it. So it is a use of a combination of traditional trading and online buying, that gives Nathanel the edge in his business.
Nathanel is bullish on the India centre and the India market. “This is where the future is,” he stresses. “International companies should create alliances, partnerships and joint ventures with Indian companies and set up business here, one way or the other.”
The future of online trading
So what lies in store for online trading? Will it surpass the conventional style of marketing diamonds?
Best for large stones
Anshul Mehta says, “There will always be a trade-off between the cost and benefit, and it may not suit all kind of goods. For larger stones, 25 points and above, it makes sense to certify the goods, and in this area, online trading will become the dominant form of trading. For smaller stones, the volume of stones and cost of certification will mean that online trading will remain less dominant. Nonetheless, the online platform will be a very important tool in marketing and selling diamonds going forward.”
The power of mobile internet
Apart from the internet the late 1990s and early 2000s saw the boom of yet another technology happening in India – the cellular phone. From just making calls and sending short messages, the mobile today has become a portable computer - providing internet services to check emails and browse websites – for those on the go. Ankit Shah says, “In the near future online trading will play a significant role in any company’s growth. People have now become computer savvy and online trading has made the business transparent and most importantly it saves time and money of the customers and helps to expand the business worldwide so we believe it will definitely surpass the conventional style of marketing diamonds. We also believe mobile internet is the next big thing and thus we are one of the few companies in the diamond industry that have already developed a mobile website. “
Cloud Computing – a thing of the future
Cloud computing is Internet-based computing, whereby shared resources, software and information are provided to computers and other devices on-demand, like the electricity grid. Typical cloud computing providers deliver common business applications online which are accessed from another web service or software like a web browser, while the software and data are stored on servers. Shreyans Dholakia, whose company recently launched a mobile version of their website including online trading, says, “By online, if you mean using cloud computing and technology, then I must say that if one is not online, one is not in line at all. I mean that is the only future. It is completely a new battle field where website is one of the few team members.”
From a 24x7 online shop showcasing their inventory to providing the best of customer support, buying diamonds has never been so easy - just a click away. Using the latest technology and marketing tools, India Inc. is all set to attract its customers to buying its inventory anytime, anywhere.