Looking for a Rs. 1,200 crore turnover annually by October 2016: Mebelkart
  • IR
  • IR
  • IR
Looking for a Rs. 1,200 crore turnover annually by October 2016: Mebelkart

Rahul Agrawal’s entrepreneurial journey began while he was still a student at IIT Kanpur. In his first year there, following a 45-day internship in the capital city, he began developing mobile games which he sold to Pizza Hut and Dominos.

“In order to scale it up further, I conducted workshops at IIT Kanpur campus,” said Rahul Agrawal, CEO and Co-founder, Mebelkart. It was through these workshops that he chose the brightest of minds for his first venture called ‘Young Engineers’, which went on to conduct workshops in as many as 150 colleges throughout the country in just three years.

“This also ended up being a learning platform for me wherein I got my training on how to run a business. It is here that my approach underwent a transformation. I used to believe in a straightforward approach that hardwork is all you needed to get the desired results. But, my experience of running my own enterprise made me realize that there were many other factors which came together when it came to building an enterprise,’ Agrawal added. After joining PicSean Media, a start-up, in late 2011, Agrawal met his partners Ranjeet Vimal and Nikhil Saraf, with whom he started Mebelkart in 2012, wanting to bridge the gap between operational efficiencies and technology in the furniture market.

Currently, with 85 per cent of the market still unorganised, Mebelkart is determined to connect the supply-demand gap in terms of changing customer taste and lack of local vendor’s and supplier’s knowledge to handle customer expectations. The company raised funding last year, as a proof of their contribution toward the fast growing furniture market, from Astro Malaysia and Askme.com to the tune of $20 million. Retailer media discusses with Agrawal about the company’s business model, fulfilling changing customer demands and surviving in the extremely fragmented industry.

What exactly is the need you are addressing in the market?
During my post graduation days, I continued to run Young Engineers and did not appear for campus placements. Later on, I joined PicSean Media, a startup, in late 2011.  It is here that I met my now partners Ranjeet Vimal and Nikhil Saraf. They were my industry seniors who brought to our association a lot of business knowledge and experience.

The decision to sell furniture online came after a lot of discussion. The logic behind the same was that we felt that there was a vacuum in this industry which will be resolved by selling furniture online. Our wish was to be a key player in contributing towards organising the highly disorganised furniture retail market in India.

Our reasoning behind this was that for a long time in this sector, nothing was standardised and there existed no brands, no fixed pricing system. Logistics was and still remains a cumbersome process and even maintaining quality remains an issue till today on which we are actively working upon.

What is your business model?
We operate with two business models, one of them is the retail business and the other is the interior design business. In the retail business, the customer chooses from the various options on the website and places his/her order which is then manufactured and delivered to the customer. Product deliveries are done by our partners. We ensure better delivery timelines than the industry average and even our range of products are about 29 per cent cheaper than those of Pepperfry or Urban Ladder. Our focus presently is to shift from a 70:30 national:hyperlocal delivery model to a 80:20 hyperlocal:national model.

Our other business is the interior design business wherein customers choose from various interior designs. These include a background of the designers’ previous projects, their works and the comments and ratings they have received. Mebelkart promises to deliver a complete home to our customers in 45 days at a cost which is lower than what the market offers. We have tied up with in-house design expertise, that is, the best interior designers in the country and have a working relationship with close to 2000+ factories across India. When it comes to our business, the cost margins are about 35-40 per cent and the net revenues are 15-20 per cent.

What was it that attracted the investors to your business?
We always ensured that we got the basic business model right. That is the reason behind us working as a bootstrapped organization for almost 3 years. It is after we got the model right that we focused on funding or scalability. This is what the investors found to be attractive about our business.

How do you see growth scenario in this business? What are your future scale-up plans?
There is a lot of business potential in this industry. As per recent news reports, furniture is a 85 per cent unorganised industry in India. Our aim is to play a key role in organising this industry, ensure standardisation when it comes to product, pricing and ensure quality standards. We have been early entrants and have the first mover advantage when it comes to online furniture industry in India. We deliver to 22,450 pin codes and our current annualised GMV run rate is Rs. 96 crores which we expect to grow to Rs. 100 crore a month and a Rs. 1,200 crore turnover annually by October 2016.

Stay on top – Get the daily news from Indian Retailer in your inbox
Also Worth Reading