 "Ikea's continental shift")
The Ratan Tata-backed firm is opening three physical stores -- two in Bengaluru and one in Chennai -- to give customers a better touch-and feel experience and take on the unorganised players in the furniture market.
"The main thing that we are looking is building brand Urban Ladder. While doing that we are looking at how to do it at a much lesser cost. We are looking at how we can do it without television advertisements etc. Both, the physical shops and the Amazon tie-up is much lower in terms of cost," said Rajiv Srivatsa, co-founder and chief operating officer of Urban Ladder.
India's nascent online furniture industry is seeing several players such as Pepperfry, Urban Ladder and LivSpace offering custom built products to consumers. They also are focusing on product quality and customer service to differentiate from unorganised players, while charging a premium from customers.
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 being just 1 per cent of that at $300 million.
Last week, Urban Ladder said it was shifting its model from being a stand-alone online store to be a vendor in marketplace Amazon, which is aggressive in India.
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"We have gone for specific categories especially the kitchen ware where the touch and feel experience is higher. They are mainly high ticket size products. All the three shops are pilot and three different models in terms of their location. Based on the response we will understand what works. By the end of the calendar year we will so much more happening in the physical stores," added Srivatsa.
Srivatsa is optimistic of the timing of the initiatives and said he hopes to see better sales and revenues this season. Srivatsa says that the festive season is a time when people are willing to spend more and the brand outreach activities will help take advantage of that.
"However, we will not be giving any major discounts or sales. We will not go crazy on discounts," Srivatsa added.
Similar to Urban Ladder, it's competitor Livspace, also believes that currently the digital medium is the best for attracting new customers. The founder Anuj Srivastava says he is focusing on the mediums such as Facebook to get traction currently as they are cost effective because they are practically free.
Srivastava says that they are also using a lot of activation marketing techniques and hyper local marketing that will ensure the customers gets more touch and feel experience. This, Anuj said is done using technology such as Augmented Reality and Virtual Reality and also manpower in general and will be coming to customers in a few months. Livspace last month raised 100 cr funding from Helion, Bessemer Venture partners and Jungle Ventures.
"We have a dozen of experiential apartments and centers. For us the experiential centers are not to attract customer but more like a fulfillment centers. We plan to expand that to at least 25 by the end of the year," said Srivastava.
Srivastava says that only next year will they look at having a television advertisements.
"We have the money, we recently got funded as well, but taking my experience and Google and general awareness, it is too early for us to make a television advertisements. I will come out with an advertisements only after we have thousands of customers and completely running and set up experience centers and apartments. What is the point of having an advertisement now when I will nt have the experience centers," said Srivastava.
