Times are uncertain and so is the attitude of today’s Gen Z and millennial consumers, not only in India but across the world. And this ‘no strings attached and no restrictions’ feeling is across categories – be it e-commerce, electronics, durables, even clothes, home, furniture, etc. and more than choice, this is about shedding the responsibility that comes with buying and then maintaining things. And now the retail industry has also started working on the lines of this changing or rather changed consumer behavior and thus a number of start-ups emerging now are entering the rental segment and renting out products to consumers for a said period of time along with added services of maintenance, delivery, etc.
Covid too has added to this and the industry is evolving in accordance with the trends and is remodelling themselves for better revenue and traction -- survival of the fittest if you will.
While there have been rental companies in varied categories currently, furniture rentals are what has caught the most attention beyond just the millennial consumers and why not? The concept gives an added advantage to the users to refresh the overall look of their homes every season or towards the end of the rental period.
A number of factors including rising per capita income, access to easy digital tools, awareness and adoption of newer trends, etc. have led to the evolution and rising popularity of the furniture rental businesses.
“The pandemic has presented a unique and unprecedented combination of challenges in one’s day to day life. And it has created more relevance for the furniture rental category. Firstly, people are spending more time at home in the current times than they have ever had. Their work and their kid’s school shifted to home and quality family time is now spent at home. People have inevitably felt the need to upgrade this space with good quality furniture that allows for a pleasant lifestyle. People who never used their balconies, for instance, are transforming it into a nice reading space or a mini garden where they can sit and enjoy a relaxing break. Secondly, uncertainty has hit hard. In times of such stark uncertainty and the transient nature of things, it is not wise to invest in furniture at the moment. We have seen families who have, in fact, sold off their furniture, moved back to their hometowns during the first wave, and have now come back only to rent so that they don’t have to go through the painful experience of relocating with furniture again. So, for one to live a good life at home, while not having to commit to a huge bulk of products tying them down as life moves forward - renting good quality furniture is the only intelligent and convenient option available. We strongly believe that having tasted the freedom and flexibility that comes with renting furniture, people will be more and more inclined towards the idea in the times to come - with or without the pandemic,” asserts Ajith Karimpana, CEO & Founder, Furlenco.
Interestingly, the category didn’t just stop with renting out the furniture but Furlenco is taking the business and the overall process a notch higher with the subscription-based model, claiming to be the world’s first furniture rental brand to have a subscription service. So, what really is Furlenco UNLTD?
Subscribe It Now
A subscription-based business sells its products on a scheduled time basis and benefits both consumers and companies wherein the consumer enjoys the convenience of auto-renewals and having access to high-value offers for a low ongoing investment and companies can scale with confidence, with predictable revenue and also deeper relationships with the consumer base.
India is a growing market for the subscription model and the market size for it was around Rs 1,200 crore in 2017-2018 and is continuously growing in the country, more so during the ongoing pandemic. To talk about the global subscription e-commerce market, it is expected to reach US$ 478.2 billion by 2025. Besides being based on recurring payments, subscription models offer a deeper customer insight which ultimately helps in wider business choices – from product alterations and new product offerings to marketing decisions, etc.
Furlenco has been ahead of its competitors to enter into this segment with Furlenco UNLMTD. Just a week after the closure of its Series D fund-raise of Rs 1,000 crore, the Bengaluru-based furniture rental start-up announced the subscription business model on July 15, 2021, and has already gotten a waitlist of over 1,000 potential subscribers.
Ajith Karimpana explains, “UNLMTD by Furlenco is the world’s first furniture subscription offering. What we are offering is a groundbreaking proposition that allows our customers to never have to own furniture. For a fixed subscription price, one can select a variety of products from our award-winning catalog and furnish their entire house in one go. UNLMTD is an annual subscription plan (billed annually) that comes to as low as Rs 4,999 (plus taxes) per month. And just for that much, one can pick up to 15 furniture and home appliance products from any category and of any design that they like. For customers who do not need as many as 15 pieces, we also offer a Lite plan which comes to Rs 3,999 per month (plus taxes) and offers 9 products from the entire selection. There is no security deposit. At the end of the year subscription, one may choose to terminate the subscription, or pay for the next year and continue with UNLMTD.”
The subscription plan by the brand comes with a flexibility of a 45-days window for customers to swap and try furniture till they make up their minds. This and the other features of the plan makes UNLMTD the most flexible subscription plan there can be. However, it is yet to be ascertained if the new business model is feasible in the long run or not.
“Not every rental brand can do this. A subscription business only works if one is able to deliver a customer experience so amazing that the customer adopts the offering as a way of life. It requires the products to be of the best quality, customer service to be top-notch, and the entire experience to be seamless; Furlenco has been in the business for a long time now, delivering well on all these aspects. Our award-winning furniture is specially designed to allow for easy refurbishment and transportation. This, coupled with our world-class refurbishment facility, enables us to bring any used product back to a brand new state in no time, with meticulous precision. In terms of logistics, we already have over 140 trucks running every day across India and while his is adding stress to it, we are strategizing and innovating,” maintains Ajith Karimpana.
Even as this business model in the furniture category is quite new to the Indian consumers, the value-driven Indian market is very adaptable to new concepts that add value to their lives and UNLMTD solves real problems for people and this has made Furlenco really confident of the new launch. The subscription service is currently available in Bengaluru, Mumbai, Pune, Delhi, Noida, Gurugram, Ghaziabad, Faridabad, Hyderabad, and Chennai and will, in time, be expanded to all the 13 cities the start-ups operate in.
The Right Kind of Marketing
Furlenco is one of the leading furniture rental brands in India reimaging B2C commerce and investing heavily in technology-first innovations, the most recent being the subscription-based business. While Amazon has already topped the subscription model with its Amazon Prime, Furlenco now needs to market its model right in order to stay on top of its game and keep the number of subscribers going up.
Ajith Karimpana elaborates, “As a digitally native brand, undoubtedly our marketing approach would be digital-first. Furthermore, our target consumer is an evolved e-shopper and online content consumer, so a digital marketing mix would work the best for us. Since such a service has never existed before, we have planned our GTM strategy based on our learning from our extensive experiments to test the right marketing mix and communication strategy during the waitlisting phase. Google Ads, social media ads, OTT and content platforms, and news aggregators would be our key platforms for the promotion. This will be coupled with a strong content and influencer marketing game which has always worked for us, as seen in the huge spikes in our traffic and enquiries post every such initiative.”
For now, the brand is offering certain complementary value-added services free with the subscription and ‘Flexi’ services like relocation service to a new city or a new house in the same city, option to return the furniture before the subscription ends and damage cover in case of any mishaps and these will be available at a nominal cost after the expiration of the launch offer.
Challenges & Road Ahead
The subscription model is quite a new concept for a furniture rental brand but Furlenco is confident of excelling it with years of experience in the business. Customers are too wary of the model because of unfamiliarity and are hesitant to shell out money in advance, but this too is changing gradually with the changing consumer behaviour during the current times.
“We had a revenue of Rs 100 crore in the fiscal year 2021, and we are now looking to grow the business to Rs 2,300-2,500 crore over the next five years. We have raised US$ 200 million in the last 4-5 years, including a recent round of funding worth around Rs 1,000 crore by Zinnia Global Fund," concludes Ajith Karimpana.