Crain's

Online Jewellers aim at high end Move into luxury sector; traditional retailers are slow to counter threat

BY ELISABETH BUTLER

UNTIL RECENTLY, jewelry industry leaders firmly believed that customers would never buy pricey jewelry anywhere but in a stone an inviting place where they could feel the piece in their hand and see how the gemstones catch the light.

Those industry heavyweights never met Evren Bilimer. Just before Christmas, the young private-equity firm director went online and bought his new girlfriend a sparkling triple-sapphire pendant for $2,400 at Angara.com.

"I'm not a big shopper myself," Mr. Bilimer says. "I like the convenience of shopping online."

Angara Inc. was created for people like Mr. Bilimer those willing to spend big bucks for baubles online. The company is one of a number that for the first time are taking e-commerce to the upper reaches of the jewelry market. They are challenging the long-running dominance of such titans as Tiffany and Harry Winston, undercutting the majors' prices by as much as 50%.

Thanks in part to the big players, who are still in a state of denial when it comes to the online threat, Angara expects to ring up $10 million this year-its very first in business. Ankur Daga, the company's owner, boasts that the average sale of an engagement ring on his site has already hit $15,000.

Recent data clearly showed a drift of shoppers heading online to make major jewelry purchases. When it came time to make their most expensive jewelry purchases. 27% of consumers said that they went online, according to a January survey by the Jewellery Consumer Opinion Council, a market research organization. The figure is double the 13.5% that turned to the Internet just three years ago.

To press its advantage, Manhattan-based Angara will soon introduce two new tools designed to significantly upgrade the online shopping experience. One program will allow visitors to click on a piece and then view a video of a model wearing it. Soon, the site will also feature a live video link to connect the shopper with a salesperson in Angara's showroom.

The perception of the "Internet is that it's very impersonal." Mr. Daga says. "Our object is to reverse that.