When it comes to online retail everything sells, be it a pin or washing machine. However, there are always few specific product categories that are centre of everyone’s attention in a particular phase. For the first few years, it was electronics. Then came the boom of online apparel. Online Home Décor & Furnishing can be regarded as the ‘it’ industry of the current Indian ecommerce phase besides niche segments such as grocery and lingerie.
Founded by Vaibhav Aggarwal, Vikram Chopra and Mehul Agrawal in 2012, the Hyderabad based Fabfurnish is a venture of Rocket Internet. They receive close to 1, 00,000 orders a month with an average transaction size of Rs 14,000! What’s unique about Fabfurnish is that they opened offline franchise stores after dabbling in the online space.
Mumbai based marketplace Pepperfry was founded by former eBay honchos Ambareesh Murty and Ashish Shah in 2012. Since its inception, the company has raised Rs. 164 crore in series of funding.
Another portal in the home décor space that was born in 2012, Urban Ladder is a brainchild of Ashish Goel and Rajiv Srivatsa. The ecommerce venture has grown rapidly and has managed to rope millions of fund from investors such as Sequoia Capital, SAIF Partners and Kalaari Capital.
Bangalore based Livspace was established in 2012 by Anuj Srivastava. They create bespoke home design and décor elements for shoppers across India and South East Asia. With an impressive growth rate, the company recently acquired Dezignup, as part of their expansion strategy.
Some other online ventures in this industry are Bedbathandmore, The Home Label, Nestopia, Furlenco, Zansaar, Homelane, Mebelcart and Roomstory.
IndianOnlineSeller brings you two established ecommerce players, founders of FabFurnish and Livspace, to dole out marketing strategies they adopted and tools they relied on to overcome biggest barriers in the home décor & furniture segment. It gives a peek at how players dodged difficult situations and were able to lure investors and customers.
Mehul Agrawal, Co-founder, FabFurnish shared with IndianOnlineSeller, “Logistics is certainly the backbone of all operations in the ecommerce sector. For an e-firm, logistics and last mile delivery, especially, are extremely important. As the actual touch point with the customers takes place only at the time of delivery, we believe it should be carried out perfectly. Therefore, there’s still a wide scope to make this particular customer experience easier, smoother and quicker. Also, we recently launched our own specialized logistics service called ‘FabOne’.
Explaining further he added, “This service optimizes the existing hubs of FabFurnish wherever possible and also uses third party warehouses and hub spaces, thereby reducing the investment to almost zero. We aim at investing in this service to effectively maintain a steady and smooth-sailing customer experience.”
While speaking about Logistics and Supply Chain challenges in online furniture segment, Anuj Srivastava, CEO & Co-founder of Livspace said, “One of the key principles in the organisation has been to solve the last mile problem traditionally associated with the industry. We spent appropriate amount of time before our public launch to ensure a predictable supply chain for a rich catalogue and a pleasant in home experience.”
“We work with the best installation partners across major metros, we have a few dozen supplier partners. They undergo a strict quality and commercial due diligence before coming on board. Our unique design and installation philosophy ensures we can design a full apartment and villa in a matter of two weeks. We get a room ready in 2 days and a piece of furniture in less than few hours. This makes sure that our customers are ready to use their homes without any disruption”, he said.
We asked Mr. Agrawal if there any special measures that FabFurnish undertakes to keep a check on quality of products/sellers so that damaged/defective/fake/wrong products are never listed. He said, “Two major show spoilers of the current logistics scenario are damaged products and delayed deliveries. Therefore, there’s a need for an effective logistical & delivery process that handles such cases and incorporates strict clauses related to penalty or incentive in agreement with the logistics partners.”
He further added, “The team at FabFurnish strives hard to ensure a smooth pan India shipment. It ensures that hassle-free deliveries take place on time. In addition to this, our tracking system makes it quite convenient for the customer to track his or her own order at all times.”
Next question we directed was about the lack of ‘see and touch’ element. We asked in the absence of ‘touch and feel’ in the online space, how does Livspace create high-quality visual merchandising and entices shoppers while maintaining authenticity regarding size, colour, material, actual dimension/scale of the product.
Here’s what Livspace founder said, “Our visual merchandizing and “touch & feel” experience is world class and – given the involved decision making and the nature of the product – we invest heavily in ensuring that our customers get a pleasant, predictable experience with Livspace.”
Elaborating further, Mr. Srivastva shared some key innovations, “For customers, we also deliver a swatch box of our material which helps them touch and feel the wood finish and material. We also have a set of show apartments which our customers can visit to see our products and the interior design experience which helps them while they decide to make their homes look beautiful.”
When asked which marketing communication tools they rely on most for brand awareness, Fabfurnish’s Mehul Agrawal said, “First & foremost, we have a strong social media presence including an active YouTube channel. We run a popular home décor & lifestyle blog called ‘Fabliving’. We also keep doing CSR activities from time to time. In addition to organizing BTL activities aggressively, we also strive to participate in important events & furniture exhibitions which we feel will add to our brand value. Another very recent brand initiative from FabFurnish is Fabliving – a quarterly magazine on home décor. Newsletters, brochures and product catalogues also form an important part of our brand.”
The Indian home and furnishing market is valued at about $35 billion and furniture alone accounts for nearly half. As about 90 per cent of the market is unorganized, it presents a great opportunity to existing as well as new players in this segment. For instance, if a new entrant manages to grab even 5 per cent of the $35 billion overall market, it will still yield them approximately 2 billion revenue. That’s an impressive number. In addition, the margins can go as high as 35-50% in home décor & furniture segment, making it a lucrative online space.
Despite the abovementioned challenges, this online segment is flourishing. That’s thanks to healthy margins, generous investors, focus on value-driven sales as opposed to volume-driven and growing demand for rightly priced home furnishing pieces.
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