Furniture – An expanding product category in Indian Ecommerce, soon to be offered by Flipkart

Furniture as a product category is rising in popularity in the Indian Ecommerce market. Out of the estimated $20 billion (Rs 1.2 lakh crore) of Indian home and furnishing market (both online and brick-and-mortar combined), furniture segment accounts for about half of it.

Currently there are very few sellers offering furniture in the market, operating on different business models. Pepperfry, started in 2011, is based on a marketplace hub-and-spoke model. The website offers local and internationals brands supplied by sellers in Delhi, Mumbai, Jodhpur and Bangalore. Providing made-to-order designer furniture, the target audience is the urban middle class setting up homes. It works on a zero inventory model.

pepperfry-screenshot1

However, another player, FabFurnish works on a hybrid marketplace model and has both online and offline stores. The owners consider online channels as a way to reach the masses while their offline channels are a way to gain their customers’ trust. FabFurnish offers international kitchen brands such as Lodge, Nachtmann etc. and furnishing brands such as Espirit, Santas etc.

Flipkart plans to launch its furniture product category by the end of this year. While Pepperfry, FabFurnish and others like Urban Ladder and Zansaar are dedicated self-managed e-stores (3rd party sellers only act as suppliers and are not mentioned on the website) for home and furnishing goods, Flipkart will be the first online marketplace (where 3rd party sellers/vendors can open their stores and sell as themselves) to offer furniture as one of its product categories. One of the pioneers in the Indian online marketplace scenario, the entry of Flipkart into the furniture segment indicates the huge potential for it.

Supply Chain – major challenge

Most purchases are delivered within 3 and 90 days, with 90% of orders being prepaid. Generally, orders above Rs 10,000 are not given the cash-on-delivery payment option.

Inspite of the need, furniture as a product category has taken time to enter the ecommerce market due to the supply chain challenges. Large furniture means bigger dimensions adding up to more weight, subsequently posing a bigger challenge in shipping and delivery of the product.

Products are first sent from vendor to warehouse and then transported to customers through logistic partners. Ensuring safe delivery of products without any damage to customers is most important and utmost care is taken to select an apt logistic partner. Though movers and packers have been around for years helping people to transfer furniture from one city to another, these people do not take responsibility for the safety of the product and cheaper companies do flimsy packing and are careless in the handling and transfer of the pieces. Online stores cannot depend on such logistic partners, yet they do have to rely on third party suppliers for their shipping and delivery.

Pepperfry uses its own branded trucks in 7 cities which account for 70% of its orders and orders are sent to these cities through a network of suppliers and transporters.

Another practice used to reduce damage in transit and the cost of shipping furniture is to sell furniture which can be shipped in dis-assembled state in properly packed boxes to be self-assembled by the customer after receiving it.

Opportunity for Indian online seller with Furniture Category

Although the profit margins from the sale of furniture in the online space is 10-25%, most of the segment is largely unorganized and is an attractive avenue for more online sellers. In developed ecommerce markets like China and Brazil, furniture accounts for about 15-20% of the overall ecommerce market, which indicates potential for Indian sellers.

Nowadays, most people, especially in the urban areas, look for quality, well-designed and dependable furniture at competitive prices. In the absence of physical stores offering such products, and also due to the convenience of online shopping, they turn to online stores offering them a variety of choices. Online stores promise them hassle free, convenient and practical solutions for their home needs.

Add to the above an option of free assembly of the delivered furniture, or even assembly at a nominal cost, the seller will surely get preference above others !

 

 

 

Tips & Tools
Share OnShare on FacebookShare on Google+Tweet about this on Twitter

Leave a Reply