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By Chennaibulls
June 24, 2011 — Tiger Global has invested $6 million in online Indian jewellery portal, CaratLane, in its second e-commerce investment this month. Earlier this month, the global PE major had invested $20 million in books-to electronics e-retail venture, Flipkart. CaratLane, which supplies to 50 cities, will use the funding to expand its national footprint.
“We want to strengthen our back end and invest in marketing and brand building,” said the company’s CEO Mithun Sacheti, who founded the venture in 2008 with Srinivasa Gopalan, founder-CEO of Lister Technologies. Tiger Global is betting big on Indian e-commerce.
In April, Tiger Global, along with IDG Ventures and Indo-US Venture Partners, invested $14 million in e-retailer Myntra. They also invested in online electronics retailer Lets-Buy and in online babycare products retailer BabyOye.com.
E-commerce in India has been booming, with the market expected to rise 47% to Rs 46,000 crore this year, according to a report by the Internet and Mobile Association of India (IAMAI). However, e-retail constitutes just 8% of e-commerce, with personal items like jewellery, apparels, cosmetics, shoes and watches contributing 19% to e-retail.
While online retail has been popularly considered as driven by deals and low prices, CaratLane claims the average ticket size on their site is Rs 80,000.
But the company also claims its prices are upto 25% lower than retail store prices. Sacheti, a trained gemologist, said that in any nascent e-commerce market, low prices are the first step to attract customers. His family owns Jaipur Gems and Sacheti and he was able to leverage the connections and expertise in the area of gems and jewellery to build up CaratLane.
“We are able to keep prices low as we hold minimum stocks and are able to turn around pieces in 48 hours,” said Sacheti. While the company manufactures and retails jewellery, it acts as an aggregator for solitaires. “We source solitaires from all over the world and are able to guarantee the lowest prices,” he said. The company, which clocked revenue of Rs 50 crore in FY 2010-11, expects to expand to 100 cities by end of the year.
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