The 1,40,000-crore Indian furniture market is highly fragmented and unorganized. Within it, the on-line market accounts for a plain 750 crore. But it is expanding swiftly and also anticipated to be worth 15,000 crore in the following 3 years.
Alok followed suit during the Diwali season, making his next purchase, a king-size bed, online, with a 20 per cent discount. He has since convinced a few others to also buy their furniture online.
The Odiya businessman and his friends are part of a growing number of people buying their furniture off the Internet. Whether it is ₹2,000 for a shoe rack or ₹1 lakh for a bed made of solid wood, these consumers are willingly opening their e-wallets and shelling out the money.
The ₹1,40,000-crore Indian furniture market is highly fragmented and unorganised. Within it, the online market accounts for a mere ₹750 crore. But it is growing rapidly and expected to be worth ₹15,000 crore in the next three years.
Consumers in both small towns and metros are choosing to buy furniture and furnishings online, not only for the discounts but also for the wider choice and after-sales service. Increased Internet penetration and growth in smart-phone usage are also driving growth.
Among the prominent names in the online furniture business are FabFurnish, Pepperfry and Urban Ladder. The rapid growth has also prompted Snapdeal to enter the category. Amazon.in and Flipkart already have plans in place for the segment.
Rajiv Srivatsa, Co-founder, Urban Ladder, says that consumers are not going for a complete makeover of their houses but making planned purchases every 3-4 months. As a result, 40-50 per cent are repeat customers.
FabFurnish founder Vikram Chopra says that apart from providing customers more choice, these online stores are giving carpenters a sense of professionalism.
Nuts and bolts
FabFurnish has a team of 400 carpenters in over 100 cities. They have been trained to deliver products, assemble them if required and also take feedback from customers.
Pepperfry, FabFurnish and Urban Ladder are all marketplaces, sourcing products from across the country. They also have in-house design teams.
FabFurnish has over 2,000 sellers on its platform, while PepperFry has about 1,500. Urban Ladder only sells furniture and has 20 or so suppliers from Rajasthan, Karnataka, Pune and Madhya Pradesh.
Kashyap Vadapalli, Chief Marketing Officer of Mumbai-based Pepperfry.com, said the home furniture segment has picked up pace in the last six months. “There has been a 40 per cent jump in our traffic in the third quarter this year.”
Pepperfry’s current turnover is ₹400 crore, a four-fold jump from ₹100 crore last year. The company is targeting similar growth next year.
Gurgaon-based FabFurnish, which sells furniture and home furnishings, has clocked ₹200 crore in just two years and aims to cross the ₹600 crore mark next year.
Urban Ladder, which has operations in seven cities, is looking to expand to another 30 by September. It also expects revenue to touch ₹600 crore next year from ₹200 crore now.
According to industry watchers, the online furniture segment has attracted $60-70 million in funding since 2012, when most of these outfits got into the business.
Such is the excitement in this segment that even Ratan Tata, former Chairman of Tata Sons, could not resist investing (in his personal capacity) in Bangalore-based Urban Ladder, which has raised up to $27 million since its inception in 2012. FabFurnish and Pepperfry have also received substantial funding.
The investments have gone more into strengthening logistics and infrastructure to ship bulky and high-value furniture items than into marketing efforts.