Marilyn Monroe once sang, “diamonds are a girl’s best friend” and it seems to be ringing true as Indonesia’s fine jewelry sales grew 13% from 2015 to 2016 reaching $1.57 million, according to Euromonitor.
The country’s upper-middle class households are expected to more than double by 2030 and the current existing 1.5 million are creating demand for gold, silver and metal combinations growing annually 7.8% until 2021 making Indonesia the fastest-growing in the world for jewelry sales.
“Jewelry is part of the culture during wedding and childbirth [celebrations] for people in eastern Indonesia,” said president director Sandra Sunarto in Bandung, West Java. “They are more interested in buying heavier [jewelry] made of higher carats.”
It’s not difficult then to understand why George Budi Sumantri, CEO and founder of Indonesian online jeweler Orori, shut down his family’s offline business to focus on ecommerce in 2012 after taking over in 2003.
ecommerceIQ conducted an email interview with the founder to discover why and how he decided to sell a high AOV product in a country that is still skeptical about shopping online.
Pioneering jewelry trading online
At the time Sumantri decided to close down his offline operations, 80% of the company’s revenue came from its stores spread across Jakarta’s shopping centers.
While an extremely risky move, he believed that moving operations online would save the company money previously spent on sitting inventory and rental costs.
Within a year, the company racked up $1.3 million in revenue and as of 2017, Orori claims to have 2 million consumers and processing thousand of transactions per month.
Global sales of personal accessories are growing at 2%, internet retailing is experiencing double-digit growth. – Euromonitor 2016
“Yes, there are still people who like to shop in a physical store, but when you look closely at the urban population; young couples who plan to get married and the young people who are looking for Mother’s Day gifts, [they] love the practicality and ease of access that ecommerce offers,” said Sumantri.
As newly middle class female Indonesian consumers become savvier about her shopping prowess, she cares about choice—not just price and promotions.
Leaving no space for distrust
A common question asked by many skeptics remains, how do you sell a product with a high average order volume to a market that only began going online?
A quick browse through the site shows that wedding rings can start at roughly $220 and reach $6,000 depending on the carat and diamond cut.
Orori made sure consumers had no reason to doubt its reliability by arming the platform with certain features to ease the minds of shoppers.
For example, all of Orori’s more than 35,000 diamonds are certified by the Gemological Institute of America (GIA) and each have a complete description along with product specifications.
The best way to merchandise premium categories to the discriminating Indonesian shopper is to visibly show price tags to aid comparison spending – Nielsen
For first time buyers, they can read the company’s blog OROREADS, to access online guides for buying jewelry, including how to select the right finger size, caring for fine jewelry and choosing a diamond size.
Still not convinced? The company offers a 100% money back guarantee and various payment options such as bank instalments, cashback, and a ‘buy now pay later’ programme that allows consumers to pay 30 days after they made the order.
For any stragglers with doubts, they can chat with an Orori agent, a feature that can increase conversions up to 6.3 times.
By providing all of these services, the company is hoping to encourage people to buy jewelry online as per the company’s tagline ‘Jewelry for Everyone’.
On its way to make the region sparkle
Originally set to sell its own line of jewelry, Orori has since changed its business model to a marketplace to offer a variety of brands on its platform. Right now, the company has seven jewelers on its platform.
Sumantri targets Orori to reach $25 million of GMV in 2019 with annual transactions of 80,000.
The company also plans to move beyond the B2C sector and launch C2C and C2B (consumer-to-business) features by the end of the year. In addition to these aggressive targets, Orori has regional expansion plans starting with Singapore.
“The marketplace [model] will not only change consumer behavior about buying jewelry online, but will also help reputable brands in the industry extend their business beyond just brick-and-mortar,” said Sumantri.