With a degree in gemology and a family legacy, Mithun Sacheti’s foray into the industry that expected to touch global sale of USD 230 billion by 2015 was a smooth one. Using the technical expertise learnt from his time spent at his family business, Jaipur Gems, Mithun co-founded CaratLane, an online jewellery store in 2008.

“When we started off, every single transaction was about convincing that customer; so many people used to ask us if we were real and if we really were going to ship jewellery out, how we were going to do it etc,” said Sacheti.

Now of course everyone is used to it and you see things a lot more differently. “We have clocked high value transactions every month of about Rs 50 lakh without much of a problem. People pay us because they see value in what they are buying as opposed to if they were going to buy the same thing offline.”

But this could not have been done without having a partner who could understand the technology side of the business. “Convincing Gopal took a year and a half. When a series of transactions happened in which he was involved, and he saw that consumers were willing to buy as high as USD 30,000-50,000 worth of diamonds without seeing them, I think it clinched it for us and then he agreed let’s go ahead and do this thing,” said Sacheti.

CaratLane today has a network of over 4,000 global vendors and offers everything from loose diamonds to rings, earrings, bracelets and bangles. But it’s the price, which is almost 25% lower than retail outlets, which is the big draw of customers. But lower prices don’t mean thin margins, as Mithun saves on inventory management and rentals. With 300% year on year growth, CaratLane touched revenues of Rs 100 crore in 2011 making it a compelling proposition for global investors.

“We had one round of funding already from Tiger Global, who has also funded other e-commerce space players like Makemytrip.com, Flipcart.com etc, and we are on the verge of closing our second round of funding as well. We anticipate that going forward this year, the e-commerce buzz which was very vibrant last year will probably continue to be like that, but will be a lot more cautious probably and go into ventures which are more sustainable and will have gross margins and everything else to prove for themselves. “

With a network of 85 employees across five cities, CaratLane currently receives 300 orders a month. Mithun says it’s not just low prices but also a hassle free shopping experience that gets customers to log in, but he realises that probably offline model may have its constraints and so he is looking at setting up CaratLane Experience Centres to give consumer a chance to experience the product before placing orders online.

“As compared to the other online businesses, we are not such a transaction heavy site because obviously the average selling price of every product we sell is significantly higher; at the lowest bit we are 15 times to 100 times higher than what every other online business does but we still do about 1,500 transactions a month, those are the kind of numbers that we look to do. “

CaratLane now has a lot more visibility; with about 10,000 people visiting a day. Sacheti says that the aim now is to multiple the numbers of visitors that are coming in. “We have a brand new interface coming up which should be launched by the end of February, we have just started COD service up to a certain value in most of the cities across India and we believe that these two initiatives will take us a long way.” He also says that they plan on setting up experience centers across India which should help us have a closer interaction with consumers for them to close out their transactions in various cities.

Time off from work is rare for this entrepreneur. Three years after his setup CaratLane, Mithun is clear specialisation is the key to building a successful environment and extracting a premium from customers. So as a specialised online jewellery brand, CaratLane focuses on margins and sells at higher prices for instance their competitor flipcart.com where the focus is on volumes.

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