With the e-commerce boom in China, one company wants to find out if Chinese shoppers will buy diamond jewelry online.
Indian jewelry company, Vummidi Bangaru Jewellers, has partnered with AVT Lifestyle Products to launch Za Amor, an e-commerce website to sell Vummidi Bangaru’s diamond jewelry, specifically to Chinese consumers.
Za Amor plans to target working women with jewelry appropriate for gifting as well as daily wear. The e-commerce site will offer exclusive jewelry designs as well as made-to-order pieces.
With De Beers recent announcement that the demand for diamonds in China rose 18 percent in the last year, the Chinese diamond market appears primed for the new e-commerce venture. According to Inside Retail Asia, Za Amor expects to generate Rs100 crore ($17 million) sales in three years. This forecast may be ambitious.
There are several issues related to selling diamond jewelry online, foremost among them is proving authenticity.
Though China adheres to the Kimberly Process Certification Scheme, which means that all imported diamonds are inspected and ensured to be cruelty free, the consumer fear of counterfeits is hard to shake. Taobao’s recent venture into online fine art auctions has demonstrated the difficulty of proving authenticity, especially when competing with long-standing auction houses such as Christie’s and Sotheby’s. However, claims of Taobao turning a blind eye to counterfeits is nothing new.
In fact, counterfeit luxury goods have moved upmarket in China, with new industries emerging that emphasize fine craftsmanship in creating counterfeits that are often able to fool experts.
However, Za Amor has devised a business model to ease shoppers’ minds.
Because many consumers would be hesitant to buy such a high-priced item without a certificate of authenticity, Za Amor will allay customers’ fears by partnering with retail chains to which the orders will be shipped, allowing the buyer to inspect the product in-person, according to India Times.
This seems like a shrewd move on the part of Za Amor, and shows some familiarity with the Chinese market, as Chinese consumers prefer to try new products in-store. Furthermore, luxury brands have been using the in-store experience as an opportunity to provide customers with a luxury education.
Za Amor has already made agreements with five jewelry companies to design and manufacture jewelry for the website, and the company is in talks with four more jewelers as well. The company will rely on DHL for logistics support and National Insurance to insure the jewelry.
Run by two brothers, Jithendra and Amarendra Vummidi, Vummidi Bangaru Jewellers and AVT will invest 100 million Indian rupees (US$1.7 million) into the venture, of which 60 million rupees will go toward jewelry inventory.
The biggest hurdle for the company may be brand recognition, and thereby, credibility.
image source: za amor