The Indian market is key to becoming a $1 billion brand: Angara co-founders

Ankur: My parents have been in the business of coloured gemstones for 50 years. But, growing up, I never had an affinity towards the industry. My first interaction with jewellery was with Tanishq in India. I was working for McKinsey at the time and Tanishq was a client—they were trying to build an organised jewellery retail in India in 2002 and that was a whole new world for me.

For hundreds of years, colour was really the epicentre of the industry—if you look at the jewels of the Nizams of Hyderabad or Maharaja of Patiala, it was all about colour. Then, in 1947, De Beers came with diamonds and were able to convince the world that diamonds are how you show your wealth. All of a sudden, coloured gemstones were relegated to less than 10 percent of the industry. So, we said, can we take that bespoke element, build relationships and add colour; and can we scale it?

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Q. Do you work on anything else aside from coloured gemstones?

Ankur: A lot of our grad school friends would come to us saying, “I really like this design at Tiffany or Harry Winston or whatever, can you make me something like that but at twenty percent of the cost?” So that is the third pillar of what we were trying to do [aside from being the leaders in coloured gemstones in India and the world].

It was extremely hard. We launched in 2005. We never raised any VC money. We raised some industry capital, so we did dilute initially but then we bought back all shares through cash flow in 2015 and 2020.

What was challenging for us is, first, we had to create primary demand for colour. It was there centuries ago and then the market forgot about it. Retail stores didn't carry it because there wasn't enough demand. Moreover, there are 40 different types of gemstones. So, we had to revive the interest in colour first. And then we had to bring the customisation.

Q. How do you achieve being a vertically-integrated brand– from sourcing to design to retail?

Ankur: The sourcing part, there's forty answers to that question. The reason I say that is each gemstone has a different supply chain—diamonds, for example, we buy from Surat primarily and some from Mumbai, If you look at opals, we source rough from Western Australia, polishing is done in either Hong Kong, Thailand or India. We source sapphires and rubies from Bangkok, emeralds from Jaipur. We source rough and we cut and polish on the Angara premises in Jaipur, and some in Thailand. It depends on the gemstone and who has the right skillset for it. Once we have the loose stones, the next part is design. That's also done in-house, primarily in Thailand, but in Jaipur as well. Jewellery manufacturing takes place in Thailand, Los Angeles and Jaipur, depending on what the product is. And from there it is retailed over the web.

Q. Can you tell us about the markets where Angara is available and your expansion plans?

Ankur: Seventy-two percent of our sales are in the US, then we have the UK, Australia and Canada. We're obviously launching in India now. Also, end of this year, we are launching in all six of the Gulf Cooperation Council (GCC) countries, Japan and Singapore. Now we have a global customer base and global supply chain. We have 10 offices around the world, all funded through internally accrued cash flow.

We had our journey from zero to $10 million between 2005 and 2016. We broke even and have been cashflow positive for the last fifteen years. And then from 2017 to 2022, we went from $10 million to $100 million.

Clockwise from top left: A stack of rings in natural emerald, natural ruby, natural aquamarine and natural diamond with natural diamonds as side stones; A ring with 1 carat round natural diamond center stone with natural diamond side stones; A ring with 2.00 carat lab grown blue sapphire with lab grown diamond side stones; A ring with 4.03 carat, natural amethyst center stone, with natural diamonds side stones.

And now you know this is where the primary demand comes in. In our opinion, building a $100 million business in gemstones is 5x more difficult than diamonds, and 10x harder than gold—diamonds are easy to buy, gold is easy to sell. So what we're trying to do was quite challenging in the beginning. Which is why we never took VC funding in the first place because ours is a 50-year journey to bring the industry back to its roots.

Q. Why did you choose to launch in India now and what is your biggest challenge?

Ankur: Part one, and the biggest one is, we're finally ready for it because it's all internally accrued cash flow. We need the cash to be able to launch in the market. Part two is, if we look at the global landscape for jewellery, of the $400 billion industry worldwide, $85 billion is in India. So, India and US are the two largest in the world. India is the second largest consumer of gold, second largest consumer of diamonds, and obviously it's a large market; the funny thing is the US GDP is $30 trillion dollars, India's is $4.3 trillion, but they have the same market size. So, India’s love for jewellery is 7x more than the US.

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Part two is, only two percentage of India's jewellery market is coloured stones. Historically, that wasn't the case. Everybody here understands colour. One of the surprising things when we did our soft launch six months ago is everybody here already knows aquamarine, citrine, peridot, amethyst, ruby, and sapphire. They know what they're looking for, so our education part is much easier than we thought. In the six months of our soft launch, we've crossed Rs10 crore in revenue. We're already profitable in India with minimal marketing, basic Google spend and basic minimal spend. By 2030, we plan to get to Rs1,000 crore plus here.

Q. When you say bespoke, what are the different ways in which you can customise the jewellery?

Aditi: We offer four different qualities of gemstone—Good, Better, Best and Heirloom. It’s a rarity on ecommerce. And that makes the supply chain part even more complicated, and which is why we didn't go into offline earlier because, for any given design, for example say a necklace, we carry this in lab-grown diamond, then we carry it in four different qualities of gemstones. We carry it in 1.5, 2.3, 3.8 and 5.8 carats and more often in three different metals. So, it's almost impossible to carry almost up to 250 permutations per SKU that way. So that’s what makes it complicated to do offline.

Ankur: What AI is going to let us do now---which we're working on in real time and should be able to launch in two to three months—is it will go back 300 years, where Aditi’s forefathers had this conversation with the Maharaja of Jaipur who wanted to get a sarpech (turban ornament) made in a substantial size using colour gemstones. With AI, we can start a conversation. For example, [for an engagement ring] one of the questions would be, where did you guys meet? Let’s say you met at Ponte Vechhio (in Florence, Italy), that could be built into the engagement ring. The storytelling comes through the jewellery.

With AI, we script (this is alright) the web with all sorts of design permutations, you can build it on the fly, and we would offer a price for different iterations, and once we receive a confirmation from the customer, we can produce the piece.

Q. These are all high-value products. Aren't Indian customers a little sceptical about placing these orders online?

Aditi: In our alpha launch, what we did hear from 80 percent of our customers in India: Where's your store? We always make our customers our true north and because of that feedback we're opening our first worldwide store in Jaipur by the end of this year. We've seen 22 percent of our sales from Bengaluru, which could be next. Once we get that model right, the idea is to scale it aggressively across the country.

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Our highest order online ticket in the US has been Rs1.5 crore, this will be a challenge [in India]. I think the model for India will be different than the rest of the world. So Japan and the US have more similarities, but in India, it will be omnichannel, both offline and online.

Ankur: We're envisioning more experience centres and stores—think more Apple than Caratlane. We won't be the cheapest in the market for sure, but we will be the best value by far. Because we're providing better quality of gemstones and finishing. The only way we can show that is in a store. And that's going to be part of our challenge because India is a very price-sensitive market. That being said, for online sales, our average ticket is about Rs50,000, which is much higher than any of the competition here.

Q. Are you going to customise your designs to suit the Indian tastes?

Aditi: One interesting learning we've had—even though we have localised the assortment maybe about 15 to 20 percent—is that what is actually selling are the global designs. And maybe because it's different from the tremendously localised market they see elsewhere over there. But we will always provide what the customer asked for. As we expand further, it also depends on the region. We don't do pure gold a lot but when we enter the southern markets, perhaps there will be more gold-focussed jewellery.

Q. Angara is proposing to become a $1 billion brand in the next five years. Can you share the roadmap?

Ankur: We're growing along three axes, but just to back up—2005 to 2017, we went from zero to $10 million, 2017 to 2022 from $10 to $100 million. So, growth is logarithmic or exponential, and not linear. The three ways in which we will grow is geographic expansion, as mentioned before. We are expanding product offering too, so more GI-certified gemstones, more of the build-your-own mode, more of the AI-type designs. Third, from a business standpoint, we've primarily been strong on search on Google, Bing, Yahoo etc. We're getting much more sophisticated on the Meta side with Facebook and Instagram and so forth, as well as with TikTok in the US.

Q. How would you teach your customers to distinguish between a fake and a real gemstone?

Aditi: A lot of our stones will be IGI certified or GI certified. I have a background in education and the way we teach children to read—the building up on the letters, and then putting them together for the sound and finally forming that word—I use that mentality in our UI UX also when we created the website. You will see the education on the four different qualities of gemstones we offer. Even the images are detailed—whether it's your skin tone slider that you can see, the size, the scale. We don't want someone to think a two-carat is going to look like a 10-carat stone on your finger.