CaratLane’s Sparkling Success Story

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According to a recent report, the Indian?gem and jewelry market is expected to grow at 21% CAGR from $37.25 billion in 2022 to reach $144.4 billion by 2029.?Traditionally, the Indian jewelry market was dominated by family-owned stores that catered to regional markets. Over the past few years, though, there has been a significant infusion of technology in the space that has led to the growth of more modern corporate houses selling both through physical stores and e-channels. Chennai-based?CaratLane?is one such successful story.

CaratLane’s?Offerings

Founded?in October 2008 by Mithun?Sacheti and Srinivasa Gopalan, Chennai-based?CaratLane?is an online jewelry store that provides access to a wide range of loose gems and diamonds for the gem and jewelry market.?Mithun had grown up in the jewelry industry and prior to founding?CaratLane had already opened new stores for his family business throughout the southern regions in India. Since Mithun was so involved with the gem industry, he was influenced by Blue Nile’s operations in the US. He, along with a co-founder,?realized that clients did not normally see the actual diamond when buying them, but bought the stone based solely on the specifications and certifications. Read more about CaratLane’s origin story in my 2012 interview.

Mithun was already an expert in the jewelry design and manufacturing space. By joining forces with?Srnivasa’s?technology expertise, together they were able to build?CaratLane?into a website that could collate orders, reduce the overheads associated with brick-and-mortar stores, and sell high-end diamonds at attractive discounts.?CaratLane?was built with the vision of becoming the Indian Blue Nile. It began by building out an inventory of solitaires before expanding into mounts and settings. Today,?CaratLane?has become an online jewelry store that strives to make jewelry shopping online easier.

Over the next few years, Mithun and team grew the business, but began to realize that online shopping wasn’t enough. They decided to venture into the omnichannel experience. To continue to gain trust in the market,?CaratLane?was now looking for a partner for their efforts.

By 2016,?CaratLane?had partnered with Tanishq, the jewelry arm of India’s Tata Group’s Titan portfolio. Tanishq was a pioneer in the Indian industry and had worked toward ensuring quality products in the industry. It was known for simplifying the jewelry purchasing process in a highly fragmented Indian jewelry market.?

CaratLane?successfully leveraged Tanishq’s market reach and channel outlay to continue to grow its business. By 2018,?CaratLane?had launched international shipping with the aim to bring India’s jewelry styles accessible to the global market. Today, as a part of the Tata Group portfolio,?CaratLane?has become India’s largest omnichannel jeweler that has over 120 retail stores across 45 Indian cities, and with the ability to ship globally to over 130 countries including the USA, UK, Singapore, Dubai, Australia, and Canada.

CaratLane’s?Financials

CaratLane?has seen strong revenue growth over the year. Its revenues grew 73% over the year to INR 2,177?crore?(~$262 million) in FY23. It is delivering these revenues?profitably and?had ended the previous year with a profit of INR 102.4 crore (~$12.3 million). Last year, it also crossed the 1 million customer mark.?

Recently?CaratLane?has been in the news for its ownership transition. Since 2016,?CaratLane’s?majority shareholding has been with Titan. Titan has been gradually increasing its stake and by 2019, it had increased its stake to 72.3%. Earlier this month, it announced plans to buy an additional 27.2% stake in the company to hold 98.3%. The additional ownership was bought for INR 46.21 billion (~$555.8 million), putting?CaratLane’s?valuation at INR 17,000?crore?(~$2 billion). The acquisition of the stake put an end to any speculation that?CaratLane?would go public.

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Photo Credit: Daria G?odowska from Pixabay