Funding Accelerates Innovation Cycles: BlueStone

IITian Gaurav Singh Kushwaha, CEO and Founder of BlueStone, an omnichannel jewellery retail brand, talks about his marketing strategies, and the importance of raising funds to speed up expansion.

How did jewellery happen?

When I exited from my first venture, I was looking for options in direct e-commerce space, and studied several verticals. In the early days of e-commerce, I watched Amazon and Flipkart very closely. I realised that on an e-commerce platform if a category was not distinct from others and didn’t offer scope for value addition, it didn’t do well.

Gaurav Singh Kushwaha

In jewellery, however, the differentiation is naturally inbuilt into the category. Moreover, the size of the jewellery market in India is huge. It is the mother of all categories. The sheer size of jewellery category and the innate differentiation inbuilt into it – be it on the supply or the demand side made me decide on going ahead with jewellery. And that decision has proven to be correct.

© BlueStone

Bluestone has invested in three jewellery manufacturing facilities – two in Mumbai and one in Jaipur. Did you consider the option of an asset-light model such as a jewellery marketplace?

Amazon and Flipkart are already marketplaces for jewellery, but they don’t sell anything. Marketplace typically works for low-involvement products such as fashion jewellery.
As for fine jewellery, the world over there’s not a single marketplace for it. In fact, even in the offline world people don’t go to malls to buy jewellery as it is a destination-driven purchase. Marketplaces, I’d say, are ideal for specific products like solitaires. A product category like fine jewellery needs customisation and careful selection.

Let’s say if I open a marketplace, I can offer 1 million earrings to the customers of different designs. That’s really a huge number for anyone to navigate. While browsing if you come across 30 Bad designs, and then one good design embedded between them, you will get an impression that all designs are bad. This actually spoils the customer experience and brings down the design appeal of the entire offering.
Trust and credibility can be built only if you have a control over the entire customer experience.

©BlueStone

Bluestone started off as an online retailer and now you have set up 70 stores in 4 years. As an omnichannel player, what is working the best for you?

The boundary between what is online what offline is often blurred. Online is generating almost 90% to 95% of sales. Out of the sales generated online, our stores are converting 70% of these leads. Our typical buyer spends almost two to three weeks on the website looking and short-listing designs, taking screenshots and so on. Then she walks into a store looks at those designs and few other designs also. Almost 65% of them end up picking a product which is already there in the store, and 35% of them place an online order from the store itself.

© BlueStone

You have mastered the art of raising funds and meeting investor expectations. Recently, Bluestone was in the news for raising over $30 million (Rs. 228 crore) in a funding round led by Sunil Kant Munjal, chairman of Hero Enterprise. Your comments.

We started with Venture Capital funding raising almost 4 million at the ideation stage itself, even before the launch. We have generally been good at fundraising. I have raised four rounds and there’s more in the offing.

What funding gives you is essentially the ability to move faster with the innovation cycles. So that is what has happened with us – the capital helped us to achieve what we wanted to do in eight years, which otherwise may have taken three generations. Almost our all our initial backers were tech investors.

I think it’s generally a good idea to work with less capital and to work with those investors who are generally very agnostic to the sector you’re operating in. Choosing the right investors at the right time, I think is the right strategy. We have always been an institutional-owned company that has been professionally managed. Almost 80% of our company is owned by reputed investors.

What’s your personal stake in Bluestone?

It’s around 15%. We are primarily institutional. The right outcome for us is to raise money from the public. Equity gives you stability. Every fund has a life. So, when you become a public company, it just becomes easier for money to come in and money to flow.

You have said that failure is the best teacher. Can you share one failure in Bluestone and what did you learn from it?

Back in 2015 we believed that just by pushing the pedal on marketing and brand building, we will be able to scale the business. That unfortunately did not happen. We did burn a lot of money and we also wasted a lot of time. That was one big learning.

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