 "Urban Ladder plans to get a physical avatar")
Ratan Tata-backed online furniture mart Urban Ladder has sought approval to open offline stores as it gears to take on larger competition from Swedish furniture maker IKEA, which is setting up stores across India.
Urban Ladder’s push for its own branded retail outlets comes as local rivals such as PepperFry, FabFurnish and Livspace have moved offline to engage more customers to buy online. The Bengaluru-based firm has applied for a single-brand retail licence from the department of industrial policy and promotion (DIPP).
“We are still exploring the single-brand model and are in conversation with consultants to understand the model better. However, we do not have a final decision on this yet,” said an Urban Ladder spokesperson in an e-mail response. She, however, did not elaborate on the company’s application with the DIPP.
Urban Ladder has so far raised $77 million in funding, while rival PepperFry has raised $128 million, making them the largest online furniture retailers in the country. While both are well funded, there is stiff competition from horizontal marketplaces such as Flipkart, Snapdeal and Amazon, which have larger war chests and the ability to sustain discounts for longer.
“It is conversation that keeps coming up every three months. There no right answer for it. For now nothing, but never say never,” said Rajiv Srivatsa, co-founder and COO, speaking about offline retail in an interview with Business Standard on August 12. The furniture industry in India is estimated to be worth $30 billion and is likely to grow to $40 billion in the next five years. Currently, only 10 per cent of the market is organised with online making up just 1 per cent of that at $300 million. Srivatsa expects a multi-fold jump in online sales of furniture by 2020 with advances in technology and more online shoppers, saying the space has the potential to hit $5 billion by then.
Urban Ladder has become the latest Indian e-tailer to explore the possibility of an omnichannel retail strategy. While players such as eyewear retailer Lenskart have had an offline presence for a few years now, the need to grow the market and woo offline buyers is starting to draw larger players.
Flipkart-owned fashion retailer Myntra has outlined its strategy to setup offline stores, starting with exclusive stores for its in-house brands early next year. Like all online players coming offline, the idea is largely to provide a touch and feel experience for customers and assisting them in buying online.
Furniture is one of the hardest categories to sell online, as the sector is getting organised only recently and customers finding it hard to visualise how the objects will look in their homes. Electronics, FMCG and fashion categories on the other hand are far easier to service. While all players are dabbling with the idea of virtual reality stores, there still isn’t a substitute for getting to touch and feel the real product.
CLIMBING THE GROWTH LADDER
$30 billion
Size of India’s furniture market
10%
Share of organised players
1%
Share of online players
$40 billion
Estimated size of Indian furniture market by 2020
$5 billion
Estimated size of online furniture business by 2020
Urban Ladder’s push for its own branded retail outlets comes as local rivals such as PepperFry, FabFurnish and Livspace have moved offline to engage more customers to buy online. The Bengaluru-based firm has applied for a single-brand retail licence from the department of industrial policy and promotion (DIPP).
“We are still exploring the single-brand model and are in conversation with consultants to understand the model better. However, we do not have a final decision on this yet,” said an Urban Ladder spokesperson in an e-mail response. She, however, did not elaborate on the company’s application with the DIPP.
Urban Ladder has so far raised $77 million in funding, while rival PepperFry has raised $128 million, making them the largest online furniture retailers in the country. While both are well funded, there is stiff competition from horizontal marketplaces such as Flipkart, Snapdeal and Amazon, which have larger war chests and the ability to sustain discounts for longer.
“It is conversation that keeps coming up every three months. There no right answer for it. For now nothing, but never say never,” said Rajiv Srivatsa, co-founder and COO, speaking about offline retail in an interview with Business Standard on August 12. The furniture industry in India is estimated to be worth $30 billion and is likely to grow to $40 billion in the next five years. Currently, only 10 per cent of the market is organised with online making up just 1 per cent of that at $300 million. Srivatsa expects a multi-fold jump in online sales of furniture by 2020 with advances in technology and more online shoppers, saying the space has the potential to hit $5 billion by then.
Urban Ladder has become the latest Indian e-tailer to explore the possibility of an omnichannel retail strategy. While players such as eyewear retailer Lenskart have had an offline presence for a few years now, the need to grow the market and woo offline buyers is starting to draw larger players.
Flipkart-owned fashion retailer Myntra has outlined its strategy to setup offline stores, starting with exclusive stores for its in-house brands early next year. Like all online players coming offline, the idea is largely to provide a touch and feel experience for customers and assisting them in buying online.
Furniture is one of the hardest categories to sell online, as the sector is getting organised only recently and customers finding it hard to visualise how the objects will look in their homes. Electronics, FMCG and fashion categories on the other hand are far easier to service. While all players are dabbling with the idea of virtual reality stores, there still isn’t a substitute for getting to touch and feel the real product.
CLIMBING THE GROWTH LADDER
$30 billion
Size of India’s furniture market
10%
Share of organised players
1%
Share of online players
$40 billion
Estimated size of Indian furniture market by 2020
$5 billion
Estimated size of online furniture business by 2020