Aukera looks to grow lab-grown diamond share of jewellery pie, sans compromise

Gokul Krishnamoorthy

Founder and CEO Lisa Mukhedkar says while established brands are playing wait and watch, they will eventually join the fold. Meantime, she wants to capitalise on the early mover advantage.

Lisa Mukhedkar was no stranger to the jewellery category. The founder of retail-focused Restore Design had earlier spent seven years establishing the platinum jewellery market in India, working for Platinum Guild International (UK). Yet as a consumer, there was an eye-opener of a moment that led to her launching Aukera, positioned as a ‘No Compromise Diamond Jewellery’ brand.

Mukhedkar, a former JWT hand and co-founder of brand strategy and marketing consulting firm Momentum, had wanted to buy solitaires for about 20 years. With time, her desire only grew from the half carat piece she had wanted at first. “I wanted them large enough as per my desire. And every time I went out to buy them, the prices were, to my mind, so absurd, that I just couldn't get myself to spend that money,” she says.

So she kept putting it off. When she saw the prices of a two carat item last year, it was around Rs.34 lakh and she decided to give up on the idea altogether. She wanted the size – there was no room for compromise. 

“I silently resigned myself to the fact that I would never have my solitaires. And then a few months later, someone told me about (lab) grown diamonds. So I went and saw them. I bought my own solidaires and I started reading up on them. I wanted to know: if it's such a genius product, why is it not available freely in the market? Because it was sold mostly in Mumbai by manufacturers directly (at that time) to high net worth individuals. So I started digging. I found out that all the incumbents are committed to mined diamonds and their entire market lies in mined diamonds. So they can't switch over so easily. This is a product I really believe in, because I loved my own solitaires. There is such a strong price-value proposition, such a strong consumer proposition, so I said, ‘Why don’t I do it?’” she explains.

A business partner and a business plan were in place, as was initial investment. Aukera opened its first store in Bengaluru in August 2023. A second store has been signed and by end-February 2024, the brand should have three stores up and running in the city. While Mumbai, Delhi, Hyderabad, Chennai and Bengaluru are the top markets for diamond jewellery,

Hyderabad and Chennai are next on the radar for Aukera     

“The South really values and understands quality. They will ideally buy 22 carat jewellery. But for diamond studded, they are willing to go 18 carat. They want the highest purity. They took to platinum first before anybody else because of the purity. The highest grades of diamonds sell in the South. They're really passionate about the jewellery, and they're passionate about quality jewellery. We believe that selling the highest grades of diamonds will be actually something that's very motivating to them,” notes Mukhedkar.

There is a general belief that the South is more traditional, and more so in its preference for yellow gold about all else. The entrepreneur believes that painting all South in one stroke would be a mistake.

“Things have changed quite a bit. Does the South love gold? They love yellow gold. I don't think there's any question about it. But as things are moving along, you're seeing a lot more contemporariness, a lot more openness coming into everything, including jewellery. Whether it's fashion or jewellery, you can see things moving fairly quickly. They're very much on par, especially Chennai, Bengaluru, with the rest of the country. There are consumer segments in every city  and you'll find the same thing in the South. They're open to white gold, rose gold,” she adds.
 
Aukera has done pop ups in cities beyond Bengaluru and consumers in places like Chikmangalur and Mysore are very much open to diamonds, and grown diamonds, underlines the Founder and CEO. 

She says, “For women this is such a high involvement area. The need to be in trend, the desire to have the same things as my contemporaries is very, very high. It's a big motivation. They actually seek out the latest in fashion, the latest in design, and are very happy to adopt it.”

Value Proposition and Scope 

It helps that grown diamonds come at a price point that cost far less than mined diamonds, for the same colour clarity. But that is not the selling point, emphasises Mukhedkar, adding that with grown diamonds they can even offer better quality. She notes that the price difference can be 10x – 2 carat solitaires that cost Rs.3 to 3.5 lakhs in grown diamonds, can cost 10 times that with mined diamonds. Grown diamonds also lend themselves to better designs in jewellery, she adds. 

She notes, “The consumer value proposition is not just that it costs less. The proposition is that you can get a really brilliant piece of jewellery made out of really high quality diamonds designed, beautifully crafted into an exquisite piece of jewellery. It’s all of this, with a price advantage.”

The share of diamonds in the Indian jewellery market is just 10 per cent, notes Mukhedkar. And grown diamonds have not yet begun scratching the surface. There is a need to evangelise it, but she believes that price is not the calling card. Aukera also believes that jewellery needs to be sold physically.  

“There are brands which started primarily online and then came into offline. Our belief was that jewellery is not meant to be bought online. I look at my own website and I get a bit startled when I see the nose pins. They look like really massive diamonds when they're not. It's very, very hard to judge the size of what you're looking at. And more importantly, what It looks like on me Therefore our firm belief is that jewellery is to be sold offline, is to be bought offline. That's the way it's going to stay. We’re championing an experience, and building trust around a category that is in some way new to consumers,” she explains.

That said, the brand will remain omni-channel, with discovery happening online and options like ‘Try at home’ on offer.
 
There’s a reason why established players are not championing grown diamonds, according to the CEO. Unlike in the US, where grown diamonds have taken off alongside other jewellery in the same retail outlets, in India there is a culture of buyback and exchange. Retail outlets will have to hand out a lot of grown diamond jewellery if customers decide to swap mined diamonds for grown.  

“Eventually, all trade responds to consumer demand. So I don't think there's any doubt that the large chains as well will find a way to get into grown diamonds. But just now, they're playing wait and watch. We are extremely aggressive and extremely bullish on this entire market. You don't often get a consumer value proposition like this. It's just really unique. Where there is no downside. That's the big thing. You've got something that is identical to what was already existing. In fact, only better quality, and just way, way better value. So it's just hard to deny that this is going to take off,” she underlines.  

Early Adopters

There are four sets of cohorts that Aukera has zeroed in on with formal and informal research. 

One is the middle class and upper middle class woman aged 35 to 45 years who already owns diamonds, but wants more and bigger diamonds. The next set is younger women in their 20s and 30s who get into precious jewellery as they approach their wedding. The engagement and the wedding ring is a potential segment and it's something Aukera is seeing good traction in.

“To us, that's a very powerful thing, because it's a very important purchase. And grown diamonds lend themselves beautifully to exactly this. In the US, it's primarily an engagement ring market. We're seeing that happening here in India as well, simply because you get a large solitaire – that's what you want, an engagement ring is meant to flash. Here's something that can give you, all of that, and the same preciousness, and you can have money left over for the honeymoon,” notes Mukhedkar.

The large segment of customers who buy gold jewellery but are yet to enter the diamond category is next. Then come the HNIs, who would like to add bigger and different jewellery to their collection.

“HNIs are catered to in a different way. They don't necessarily come into the store. There are different ways of catering to their requirements; it's more bespoke, more customised, and we offer that as well,” she adds.

We just don't go and blindly open stores. We will do it in a structured way where we're able to offer a genuinely differentiated quality customer experience and a definitive class in product design.

The core segments for now are the middle-aged, middle and upper income group women as well as the bridal segment. Mukhedkar says the adoption has been healthy, giving the brand enough reason for expansion. 

She explains, “There are the early adopters and there are the followers. The early adopters are seeing meaning in this. There are some who are sitting on the fence because they're afraid to get into something that is relatively new. It's being talked about and it's superbly tempting, but there are some who will hold back before they actually buy a large solitaire. There are some who will  try a small piece and say let me just test acceptance and then I'll come back to you. But there are enough and more women who are saying: ‘I can see that there is no difference. I can see that I can get a beautiful piece of jewellery. I can see I can get larger diamonds. It's all certified. There's a buyback. I'm buying it from a store that seems like I can trust it. Yeah, I'm in.’” 

The Founder is also happy with the number of repeat customers. There are enough reasons to come back. Aukera has nose pins priced under Rs.10,000, rings and smaller studs between Rs.15,000 to 20,000, and there is really no upper limit. The median ticket size is Rs.80,000 to a lakh.

If and when the larger players take the grown diamonds plunge, is Aukera capable of taking them on? 

“Our ambition is to have the first mover advantage. Which means that we will achieve scale, but in a really sensible way. We just don't go and blindly open stores. We will do it in a structured way where we're able to offer a genuinely differentiated quality customer experience and a definitive class in product design. We will take it at a pace that we can actually justify both these things. Now, whether that's five stores a year or 15 stores a year is only dependent on how we can provide those two things because that is important to us in building our brand,” explains Mukhedkar.

Women tend to feel that they've made some compromises. These are on life's big decisions, in fact. Things like when to get married, when to have children, whether to work. There's some kind of ruefulness that you see in women who feel maybe they didn't make or have a choice there. 

The brand is open to welcome investors as it expands. So does the Founder-CEO, who plotted market entry to The Platinum Guild in India, see scope for players joining forces to expand the scope for grown diamonds in India?   

“Different brands have different ambitions in terms of how they should actually sell this. So currently it's not very easy for them to come together. I've got my plans in terms of how to change that, because I believe that an industry coming together for a good cause is in the general interest of the consumer. Because it's putting out the right information rather than just putting out information. Consumers deserve the right information,” she responds. 

Communicating ‘Choice’

Aukera in Basque means ‘Choice’. The marketing efforts will be about educating consumers about lab grown diamonds and their advantages, underlining that they do not need to compromise. And this stems from a deep rooted insight.

“From the research we did, we found that women in their lives tend to feel that they've made some compromises. These are on life's big decisions, in fact. Things like when to get married, when to have children, whether to work. There's some kind of ruefulness that you see in women who feel maybe they didn't make or have a choice there. Nobody's taking to the streets about it, nobody's fighting the system or doing any of that. We're not suggesting that you do. But there is power when you make a choice. We're saying, at least when it comes to your precious jewellery, there is actually no need for you to make a compromise,” explains Mukhedkar. 

Research also said that women walking out of a jewellery store almost always left with a feeling that they paid a lot, but didn't get the diamond they really wanted. That they had to compromise on quality or on size.

She adds, “Now we're saying there is just no need to compromise. While we offer a product that we call no-compromise diamonds, we're also celebrating women who make a choice rather than compromise. The shapes – a grown diamond lends itself in design terms to very, very beautiful jewellery. The experimentation, the fun that you can have, the beauty that you can get, whether it's a classic necklace that you want to hand over to your grandchildren, or fashion jewellery, you can have it both with this. And that's what women need to hear.”

One potential route for communication could have been around the ‘no mining’ sustainability angle. Is that something Aukera considered?

Mukhedkar responds, “I am not sure if it’s the biggest motivator for someone to buy a diamond, In fact I believe it’s not. It’s a nice sheen for some people who want to go down that road. We had a couple who walked in three weeks ago. They were buying their first pieces of diamond jewellery for their silver wedding. They were very affluent people. Yet they said they couldn’t get themselves to buy diamonds that are mined. Now, they are buying this. It’s very nice to hear, but they are in a minority. Most people buy grown diamonds because they get a really good piece of jewellery at a great price. The sustainability part is a good thing to have.”

MN4U Syndicate