How do you see current online home furnishing market is growing in India? What is your assessment on growth for this segment?
Home furnishing is about 20 billion dollar industry in India and growing at the rate of 15% -20% year on year basis. The share of organize retail in this segment would be 5% to 7% of overall market. Predominately, the home furnishing market is driven by the unorganized players in the country. Online furniture occupies hardly 1% of total market. As per me view, online market will continue to grow; however, we have to figure out the better way of leveraging this channel and figure out better ways of changing the consumer behavior by making them comfortable with buying the furniture online.
In India fashion is the ruling category in online space. Do you think furniture as the category has that much of potential?
If you look at any mature market worldwide, each of the retail categories has found its ways in the online space. We are actually following the very same trend. Internationally, CDIT was the very first one to evolve then comes to fashion and home furnishing stands at third spot. So every mature economy has gone through these transitions. In India, fashion is picking up right now which is still at least 20 years behind from US market. Once the fashion will be evolved to maximum strength, home category will start gaining the momentum. We are not far away when home category will become largest in terms of online consumption.
What is the rationale behind this shift? Is online not a viable option for high ticket (expensive) furniture in present scenario?
I would say consumers are in their shell when it comes to purchasing. They do not distinguish between online and offline space. In fact, they choose medium of buying as per their convenience. It has nothing to do with pricing. We are looking to foray into offline space so we can provide an intimacy to consumer at the same leverage the online channel to display mass verity of products which is not possible in offline retail.
As of now, we have just one experience centre in Banaglure at our office. We may have our first exclusive store by May or June this year. For future, we have extensive plans for offline expansion, as we see tremendous growth potential in the offline space. We plan to extend 15% to 17% business in offline space for the initial year of the development.
How you are managing the supply chain? What are the major challenges in logistics distribution?
As of now, we are operational at about 500 pin codes. Supply chain for these pin codes is managed by our in-house resources. In last four years time we have managed to solve almost all the problems related to furniture transport. We have worked a lot on packaging and loading etc.
However, high delivery cost for far flung areas is the challenge for us. Hence, metros and tier 1 cities are our maximum market. As of now, logistics cost does not allow us to move B class cities; hence, well remain focused on tier 1 city for further expansion.
Moreover, our range is more appropriate to European and American taste, so some places could not be relevant to our offerings to some extent. In fact, this is our largest challenge when we move to tier 3 and further market.
Presently, how many categories you are retailing and which category is churning better results? Any plan to extend the existing categories?
We are operational in almost every category related to home be it living, drawing room,etc. we have a very deep catalogue as far as these categories are concerned. So, as of now, we are not looking to expand the category rang, but will focus on decore as the part of our business become more lively, and will continue to focus on furniture. Living area is our largest category.
Any plan to bring any other brand under Urbaan Ladder umbrella?
No such plans as of now.
What the latest trends in furniture purchasing?
Peoplare are becoming comfortable with colorful light weight furniture which was not very much in vogue till few years back. Simple Straight lines with Eupropean touch are also continue to remain in demand.
Recently, Urban Ladder had tied up with Tata housing to place its product range? What was rationale behind this tie-up? Are you looking to tie-up with more realty developers for similar collaboration?
We are looking forward to very similar partnerships. There are very conversations going on in same regard which I cannot name yet.
Recently, Urban Ladder has raise funding in series E Round. How you are planning to invest raise amount? Are you still scouting for more investment?
We are focusing on in incresahing our distribution footprint via raised funds.
What are your growth plans?
We are looking stronger than ever when it comes to financials. We are at good place and our bottom-line should continue to grow in next two years.