Playing the niche e-tailer

Playing the niche e-tailer

Gaurav Kushawah identified jewellery retail as the safest vertical to be in after careful analysis and established to leverage the country’s obsession with fine jewellery


It was in 2011, when Gaurav Kushwaha, a computer science graduate from IIT-Delhi, had just exited his previous venture, an online Bollywood news site called (Chakpak). As he began scouting for other business ideas, he sensed the opportunity in the e-commerce space. “At that time, internet usage was booming in India and e-commerce companies had emerged across verticals,” he says and adds, “I looked at many of them, even the ones which were in the nascent stages. Soon I realised that as long as you are just retailing, the vertical does not matter. Sooner or later, the biggest horizontal player (such as Amazon/Flipkart) is going to enter that space and you would not be able to match their scale,” he points out.

Thus, he decided to focus on the highly specialised verticals, where one has to do more than retailing to harness the prowess of the Internet. That’s how, in 2012,, the online jewellery platform, came into being. “For ages, jewellery brands have been tightly coupled with jewellery retailing,” he adds. Brands like Tanishq, Tiffany’s, Cartier are all case in point – all are the biggest retailers of jewellery in their respective target groups. Even online, if there is one product line Amazon has not been able to seriously crack, it is jewellery. Hence, Kushwaha considers it a relatively shielded space.

“Secondly, the size of the jewellery market in India is approximately US $50 billion. In absolute terms, it is almost as big as in the U.S.,” he adds, as an insight. Almost all other product categories are one tenth of their corresponding size in the U.S. market, clearly showing how much of a deal jewellery is in India. To put this in better perspective, take the case of Walmart. It is the biggest American retailer, with over US $200 billion in market cap. Back in India, Future group, Trent and Lifestyle, labelled as the big players, put together, have a market cap of less than US $1 billion. The biggest retailer in India is Tanishq (Titan Industries), and contributes over 80 per cent of its turnover/profits with over US $4 billion in market cap; bigger than the next 15 retailers combined. In the U.S., Tiffany & Co. is close to US $11 billion in market cap (1/20th of Walmart). “I am reemphasising the point here because jewellery industry in India is like no other space in the world. This is also a space where retailing on the Internet can be leveraged to its maximum potential,” says Kushwaha.

Taking the next step

Having identified the segment he wanted to be in, Kushwaha sought help from like-minded individuals who could complement his skills and help him build a wholesome team. He interacted with Vidya Nataraj, who, having been a part of C. Krishnia Chetty family, had extensive knowledge on the jewellery industry, and Ganesh K., a serial entrepreneur and an active angel investor. Soon after, Palo Alto, California-based Accel Partners and Bengaluru-based Samaa Capital invested in Bluestone to the tune of US $5 million.

The first round of funds went into learning the nuances of the business and establishing a sound platform. “We managed to achieve a reasonable scale with that investment and at the same time, innovated a lot in the way jewellery is sold online. With continuous experimentation and iterations, we turned the operational model upside down by moving from an inventory led model to a made-to-order model,” Kushwaha explains. At present, all the items shipped by Bluestone are manufactured only after receiving the order, thereby reducing the need for working capital and adding significant percentage points to the underlying margins.

“Recently, we have closed a US $10 million round led by Kalaari Capital (Bengaluru),” says Kushwaha. This round will be utilised for building scale and taking the brand to the end consumers.

Learning from experience

“Though Chakpak was only moderately successful, it taught me a lot,” says this second-time entrepreneur. It being his first experience in running a company, it was a time to learn the ropes, on the job. Managing and coordinating a multi-functional team was one of his greatest challenges and mastering this skill has proved to be an asset. “During those three to four years, I came in touch with many talented individuals who have since helped me a lot in Bluestone and otherwise,” he adds. Apart from networking, Kushwaha learnt the value of handling stress at Chakpak. More importantly, this stint taught him the value of patience.

At Bluestone, Kushwaha implements several of his learnings from this stint. Although Bluestone is an e-commerce company, it is closer in functioning to an offline jewellery retailer. “Eight per cent of our workforce comes from the traditional jewellery industry with designers from premier institutes like NIFT and NID. Most of them have extensive experience here,” he elaborates. In addition, the company employs people with Internet and technology backgrounds, giving the right mix to the DNA of the company.

In the two years since inception, marketing initiatives have kicked off only in the past one-year, a period in which the company has grown three fold. “Since jewellery buying depends a lot on trust, we are looking to grow in a very organic fashion,” says Kushwaha.

Being a highly vertical integrated business, right from designing the jewellery offered on Bluestone, procuring gold, diamond and gemstones, to manufacturing jewellery after an order is placed, the company is trying to do it all on its own. That makes the process more complex than a warehouse model that most of the e-commerce companies operate on. “A significant part of our first two years have gone into it and there are still issues that need to be addressed,” he admits. This, however, has not stood in way of the company’s growth.

In line with its image of being a transparent jeweller, Bluestone provides a detailed break up of every design on the website. All its jewellery comes with a BIS hallmark and third party certificates. In addition, a seven-step quality check process at the time of manufacturing has been established to ensure high quality. “We have always had a generous return policy. If a customer does not like a particular product, she/he can return it back to us within one month from the date of delivery,” says Kushwaha. Upon receipt of the piece, the full amount is returned to the customer. “The primary reason we have been able to provide such a return policy is because we have our own manufacturing set up and we are confident of the quality and reliability,” says Kushwaha.

The company delivers to most cities in India through its courier partners, accepts all major credit/debit cards and provides CoD (cash on delivery) as well.

Courting growth in the future

Interestingly, Kushwaha is not opposed to considering an offline model in tandem with the online model. “Fundamentally, we believe in doing what’s right for the customer. Online or offline are just business modes.” He believes both online and offline models have their own strengths and a balanced approach to leverage both is important. In the short term, the focus will be on strengthening Bluestone’s online presence with an eye on the long-term goal of establishing a jewellery brand that enjoys top recall on a global level.


Founder: Gaurav Kushwaha

Year: 2012

City: Bengaluru

Investors: Angel investor Ganesh K., Accel Partners, Samaa Capital, Kalaari Capital

Industry: E-commerce in Jewellery 



Gaurav Kushwaha had just exited his first venture, Chakpak, and wanted to begin his next. E-commerce seemed to be the way to go but a thorough research showed that being in a niche vertical was more beneficial than being in a general category, where competition could get tough. Having identified jewellery as the segment to operate in, he roped in Vidya Nataraj, who hailed from a family of jewellers, as his partner and angel investor Ganesh. K, to fund his venture. With Series-A funding from Accel Partners and Samaa Capital, Bluestone kicked off as a niche jewellery design manufacturing and online retail venture. Given the demand for jewellery in India and globally, Kushwaha believes Bluestone has the potential to be a game changer.

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