The Jewels of Innovation: CaratLane and Bluestone

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Salutations, Olio aficionados! 👋

Happy Hump Day and welcome to the 85th edition of Weekly Olio - your trusted source for giggles, wisdom, and a dash of intrigue, courtesy of our tantalizing thought piece (yes, buckle up for Publisher's Parmesan). 🧀

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The Quote󠀢 💭

The Tweet 🐦

A fantastic analogy of how a well-running startup is essentially like a machine made up of three components: a front focussed on customer acquisition, a middle focused on delivering value and a back focused on retention. For any startup to do well, all three parts of the machine need to be in sync.

The Infographic 💹

The Spread of Buddhism from India to Asia. This area is known as the "Indosphere," which means it has been influenced by India at some time in history.

The Short Read 📝

The best business books aren't actually about business - by Tyler Cowen

Tyler Cowen is an American economist, columnist, and blogger. He is a professor at George Mason University, where he holds the Holbert L. Harris chair in the economics department.

There has been an explosion of self-help books and business books over the years to the extent it is a challenge to filter. And it is important to filter content we consume. The other challenge about self-help and business books that this article highlights is the lack of context. Whilst you can select books about companies in industries that you are familiar with to build context, not everyone works in industries on which good books have been written says the author.

The Long Read 📜

The House of Arnault - by Bloomberg

LVMH is the biggest luxury retailer in the entire world. Led by 75-year old Bernard Arnault, it owns some of the most iconic brands across fashion, watches, jewellery, cosmetics and spirits. It started with the acquisition of Christian Dior and today boasts of brands like Louis Vuitton, Sephora and Tiffany among many others.

Arnault shook up the quiet world of luxury retail with his sharp moves and hostile acquisitions earning him the title of ‘The Terminator’ in the French media. He realized that bringing a bunch of mid-sized luxury brands together could help reinforce their value. These brands, called as saison’s or houses, run as independent divisions with autonomy on branding and product decision. The backend functions are centralized delivering higher returns. This is a fascinating read about the largest luxury empire on the planet.

Publisher’s Parmesan 🧀

The Jewels of Innovation: CaratLane and Bluestone

Around twenty years ago, two daring jewellery brands in India decided to change the game. Bluestone and CaratLane set out to make fine jewellery a part of everyday life, not just something you lock away for special occasions. They wanted to sell gold and diamonds online—a bold move in a country where buying such precious items online was unheard of.

With inputs from The Ken article.

Traditionally, Indians buy gold and diamonds in person to ensure quality and authenticity. The idea of purchasing expensive jewellery online was risky. But Bluestone and CaratLane believed there was a future in online jewellery sales. They were right.

Today, nearly every major jeweller in India sells their pieces online, thanks to the trail these two companies blazed. This shift has attracted major investments from global venture capitalists and corporate giants eager to get a slice of the booming Indian jewellery market. The efforts of Bluestone and CaratLane have indeed opened the doors for massive investments.

Diverging Paths: Bluestone vs. CaratLane

Despite starting with similar goals, Bluestone and CaratLane took very different paths. CaratLane surged ahead, with revenues now almost three times that of Bluestone. Bluestone, even with strong backing from Ratan Tata, has struggled to become profitable. With an IPO and a billion-dollar valuation in sight, Bluestone is now determined to catch up with CaratLane.

Both founders, CaratLane's Mithun Sacheti and Bluestone's Gaurav Singh Kushwaha, aimed to make fine jewellery for everyday wear. Sacheti, from a family of elite jewellers, saw a gap in the market for affordable, daily-use jewellery. Kushwaha also wanted to change how Indians viewed fine jewellery. They both focused on selling online to build consumer trust in buying high-value items this way.

The Turning Point: 2016

By 2015-2016, both companies had significant VC funding. CaratLane had support from Tiger Global, and Bluestone from Accel Partners, Kalaari Capital, Ratan Tata, and K Ganesh. However, their online-first strategy faced a big challenge. Despite discounts and flashy ads, customers were hesitant to buy expensive jewellery online without seeing it first.

The game-changer came in 2016 when Titan, a big name in Indian jewellery, bought a majority stake in CaratLane. Titan, known for creating successful brands like Tanishq, brought immense trust and financial strength to CaratLane. This partnership allowed CaratLane to expand offline rapidly, opening about 35 new stores every year by 2023. With Titan's support, CaratLane's growth skyrocketed.

Strategic Backing Matters

Bluestone, on the other hand, continued with its VC backers, focusing on online growth but without the same level of offline expansion as CaratLane. Lacking a strategic backer like Titan, Bluestone faced constant pressure to deliver quick results, sometimes at the expense of long-term growth.

This difference in support systems played a crucial role. CaratLane thrived under Titan's strategic guidance, while Bluestone struggled to keep up. VCs, driven by the need for quick returns, often push for rapid scaling and exits over sustainable growth. This dynamic helped CaratLane achieve both scale and profitability, while Bluestone lagged behind.

Cultural and Geographic Influences

Corporate culture and geographic roots also influenced their paths. Bluestone, based in Bangalore's startup hub, pursued bold growth strategies. CaratLane, in Chennai, stuck to a more traditional, cautious approach. These cultural differences shaped their business strategies and outcomes.

The Road Ahead for Bluestone

As CaratLane continues to dominate, Bluestone faces the challenge of establishing itself as a leader. With its IPO on the horizon, Bluestone needs to innovate and stand out to achieve sustainable growth. This might mean expanding offline, exploring new markets, or leveraging technology to enhance customer experience.

In conclusion, the journeys of Bluestone and CaratLane highlight the power of innovation and strategic partnerships in the fine jewellery market. Their stories offer insights into the dynamics of VC-backed versus promoter-backed businesses and the importance of strategic alignment for long-term success. As Bluestone prepares for its next big step, it must learn from CaratLane's success while forging its own path to leadership in India's fine jewellery market.

Olio Jobs 💼

• Twelve Labs | San Francisco, CA - Developer Experience Engineer, Machine Learning Engineer, ML Research Engineer, Software Engineer, Data, Data Quality Engineer

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We’ll be back in your inbox 2 PM IST next Wednesday. Till then, have a productive week!

Peeyush and Mohit

Disclaimer: The views, thoughts, and opinions expressed in the text belong solely to the author, and not necessarily to the author's employer, organization, committee or other group or individual.