Digital native jewellery brand CaratLane has been quick to ramp up its offline presence with an ambition to reach over 500 pincodes in the country. Its COO, Avnish Anand, walks Christina Moniz through the brand’s growth over the past couple of years, its plans and the partnership with Tanishq. Excerpts:
CaratLane’s net profit rose tremendously to cross `89 crore FY22. How would you sum up its performance in the last year?
We had become profitable in FY21 itself, but our profit was a small figure then. The last fiscal was when the growth finally made up for all our fixed costs. We also just announced our Q1 results for FY 23, where we saw a 204% Y-o-Y growth with revenue at `483 crore. Our revenue CAGR is at 56%, exhibiting a healthy growth despite macro challenges. Our plan is to continue to maintain a consistent growth rate. We do not ever want to grow at anything less than 50%.
We create our jewellery in certain categories and price points that we want to operate in, which is largely the sub-
20,000 and sub-40,000 range. Calling our collections everyday jewellery would be to oversimplify what we offer. We want to make sure that we have offerings for every big or small occasion consumers want to celebrate in their lives, especially since a good volume of our sales is driven by gifting.
Tanishq has been a majority stakeholder in CaratLane since 2016. How are you leveraging this partnership?
The association with Tanishq lends credibility and trust to the brand. We have benefited from the company’s best practices and knowhow, especially in expanding our physical footprint and driving business growth. We, however, continue to operate as an independent brand and designs of each brand (Tanishq and CaratLane) are displayed in their respective stores only. We are grateful for this arrangement since it allows us to stay independent while also helping us gain from Tanishq’s expertise and brand value.
While the brand has digital roots, it now has a wide physical footprint. What volume of sales comes from online sales and how much comes from offline?
We may be expanding offline but that does not mean we are moving away from digital. Ultimately, digital is the soul of our organisation and it is ingrained in each of our functions, right from merchandising to opening new stores. Our offline expansion offers more touch points to consumers and improves conversion in specific pin codes or regions in the country. We have our customers’ browsing data, so it is easy to identify locations with higher browsing or demand, and plan our store expansion. We are available across 53 cities with a retail footprint of 143 stores, including five new stores added in the first quarter of FY23. Our ambition is to serve over 500 pincodes where we are seeing high demand.
We don’t look at our sales channel-wise but rather city-wise. If we see a lot of sales or demand from a certain city, we work to maximise the conversion and revenues from there. Ninety per cent of those who visit our stores have checked out online the products they want to see in-store. Consumers can walk into our stores, order online and try our jewellery at home. We want to make our products discoverable and simplify the purchase journey by offering as many options as possible.
Which markets do you see higher demand coming from?
We are seeing growth coming from markets across the country – metros, tier-I, II and III. While the top seven cities contribute 57% of the demand, demand from tier-II and III markets is growing at 20%-25% quarter-on-quarter. Demand is not slowing down in the top markets, so it is not like only the smaller markets will drive growth. However, for conversion to happen across regions, we need to have the infrastructure in place. Our aim is to create the infrastructure, ensure faster deliveries and make trials easier even in the smallest towns.