How the Overall Furniture Market looks Today and What Lies Ahead

Furniture/ Furnishings pegged at $20 bn; Furniture alone is $10 bn (becoming more of an impulsive buying like apparels)
India's online furniture market

The industry Stats:
1. Furniture/ Furnishings pegged at $20 bn; Furniture alone is $10 bn (becoming more of an impulsive buying like apparels)
2. The residential sector share out of $10 bn is 70 per cent, out of which 6 per cent is organised
3. The organised residential furniture market is to triple by 2020 growing at a CAGR of 27 per cent; making it $1.3 bn – which will be up for grabs for the online players
4. 50 per cent of the market is present in the top 6 cities and more than 80 per cent in top 46 cities
5. Beds, wardrobes and sofas account for 80 per cent of the market share
6. 9 per cent of the market made up of imported goods
The online battle:
1. Consolidation happening after the 2013 lull; with acquisitions and aqui-hires
2. Consolidations: LivSpace acquired Dezignup, YoFloor and dwll.in; UrbanLadder acqui-hired BuynBrag; Home Lane acquired Doowup
3. Specialised vertical players: Urban Ladder, Pepperfry, FabFurnish, LivSpace
a. UrbanLadder (100-200 transaction daily: average ticket size 20,000); 4000 products across 35 categories; delivers to 12 cities;
b. Pepperfry (80,000+ products across categories like Furniture, Home Décor, Kitchen & Dining) Turnover in 2014: INR 400 crore; about 2.5 million unique monthly visitors, around 2,000 merchants strong marketplace; reaching more than 200 cities;
c. FabFurnish (Over 3,500 sellers; clocked INR 200 crore in 2014; aiming at INR 600 crore end of this fiscal;
d. Snapdeal to make investments in ads, technology and acquisitions over the next two quarters to grow its home decor category; has around 20,000 SKUs and 300-400 suppliers. It is the largest marketplace for furniture in the country.
4. Upcoming players: CustomFurnish, ZingyHomes, Ghar360, Stitchwood, mebelkart, UbanHomez, Home Lane
5. Other players in the online space, albeit with differing models and solutions: InvisibleBed, PinkScape, Renderlogy, Intruo, Lekiaan, Urbanhomez etc
India is buying furniture online:
1. Market set to reach INR15,000 crore by 2017 because of increasing online activity
2. The organized furniture retail industry is growing at the rate of 20 per cent year-on-year
3. Online buying prove to be advantageous: more choice & after-sales service
4. Local players not able to offer customers latest, modern designs
5. Lack of retail destinations for furniture
6. Lot of brick-and-mortar, organised retailers opening up online shops or tying up with online sellers
7. Stats to improve by 2010: India is a mobile-first economy and the smart-phone usage on the rise
8. Major players backed up by seasoned National and International investors
9. The best part: The segment accounts to low damages and return. It is less than 2 per cent
10. Online marketplaces such as Snapdeal, Flipkart and Amazon plan to enter the category soon
Challenges and the way forward:
1. About one-third of the online shoppers feel the need to touch and feel the products; major players offering free trials in some categories
2. Major players need to create a loyal customer base; work on areas such as return policies, customer support, e-mail/customer-care support, payment options must
3. Long delivery times need to be compensated. Websites offering free delivery and no-questions-asked return policies
4. Investment in wide network of fulfilment centres and adopting Omni-channels must
5. Big ticket investment requires advance payment; could deter customers from making a purchase. Easy financing options need of the hour
6. Indian market need to mirror big, mature markets in the way they own logistics, offer deep discounts, adopt Omni-channel selling, and capture a large chunk of market

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