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Fabfurnish, the Gurgaon-based online retailer, plans to raise about $50 million (Rs 320 crore) in the next six months.
This is primarily to strengthen infrastructure, technology and market development nationally, said its founder and chief executive, Vikram Chopra.
Fabfurnish sells home furniture, furnishings, décor and kitchenware from a little more than 500 local and international brands. It has so far raised a total of about $25 million and is majority owned by Berlin-based Rocket Internet.
“Most likely, there will be external investors in the next round of funding,” said Chopra. Funds are needed to increase its warehousing capacity, boost technology to enhance customer experience, including real-time tracking of delivery and more of data analytics, beside aggressive marketing. It has three warehouses, spreading across 300,000 sq ft, which it will be doubling over the next year or so.
“Our focus is offering affordable yet aspirational products to Indian mass market consumers, precisely what IKEA, the Swedish home furnishings retailer, does globally. But, we’ll remain focused on the online space,” Chopra said. The market as a whole is developing, and the “biggest challenge is activating a market that does not exist”, he added. The company, he says, will always be focusing on affordable mass-market products made of alternative materials.
At present, Fabfurnish is present across 50 cities but about 60 per cent of its business comes from the top eight to 10, where it has its own delivery supply chain. In other cites, it uses third-party vendors for delivery. “Over a period of time, we would be expanding our own delivery supply chain as much as possible. This would give us more control,” said Chopra.
A fourth of its orders come from Bengaluru, 15 per cent from the National Capital Region and about 10 per cent from Mumbai. Even a year earlier, about 75 per cent of orders used to come from only the top 10 cities, which has come down. Over the next year or so, Chopra expects smaller cities to generate more orders. The target is to double total order size to about Rs 600 crore by December. Overall traffic has increased three times to about 230,000 a day in about a year.
Till now, products such as dining tables, sofas and beds account for about 60 per cent of the orders.
"We have started expanding our portfolio. Recently, we entered the modular kitchen and modular wardrobe segment. Here, we offer maximum possible customisation,” said Chopra. The customisation comes without extra cost but the delivery time increases, as these are made in line with the demand.
At present, Fabfurnish sells about 100,000 different SKUs (stock keeping units).
Chopra also said home décor as a category was profitable and the company was not losing money on a per-order basis. “We’ll be pushing very hard next year through aggressive marketing and enhanced presence,” he added.
In the furniture segment, Fabfurnish competes with Bengaluru-based Urban Ladder and Mumbai-based Pepperfry. Urban Ladder is backed by Steadview Capital, SAIF Partners and Kalaari Capital, and recently got Ratan Tata as an investor. Urban Ladder has opted for an inventory-based and controlled supply model.
Pepperfry, which follows a wider marketplace model, has raised $28 million from Norwest Venture Partners and Bertelsmann Holdings so far.
WATCH THAT CHANDELIER GLOW
500 local and global brands Fabfurnish sells home furniture, furnishings, décor, and kitchenware from
$25 million It has so far raised and is majority owned by Berlin-based Rocket Internet
50 cities Fabfurnish is present across
60% of its business comes from the top eight to 10, where it has its own delivery supply chain
