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FabFurnish will spend $15 million (about Rs 94 crore) this year on expanding its logistics arm, FabOne, which the online furniture retailer launched today.
The firm, which last month said it will raise over $60 million (more than Rs 375 crore) from existing investors in the next one year to fund its expansion plans, is ramping up its presence in a bid to take on close rivals like Pepperfry and Urban Ladder.
"To cut down on delivery cost and to ensure a greater customer experience we have launched FabOne. In next 6-9 months, we plan to spend $15 million for its expansion," FabFurnish Co-Founder and MD Mehul Aggarwal told PTI.
The company has already spent $5 million in setting up warehouses in 4 locations, including Gurgaon, Bengaluru and Mumbai.
"We have already started operations in 7 cities like Delhi, Mumbai and Pune, among others, and want to take it to 25 more locations like Kolkata, Hyderabad and Chennai in the coming months," he said.
He added that selling furniture is not like selling any other merchandise. The delivery man needs to do a lot of things after delivering the goods which includes assembling the item, setting it up and also giving a live demonstration.
"So we want to enhance the whole experience by employing our own people," he said.
The company is in talks with investors, including existing ones like Rocket Internet and Kinnevik, to raise $60 million and plans to invest $15 million of this in FabOne, he added.
"We will mainly spend this money in setting up more warehouses, fulfilment centres and acquiring manpower," Aggarwal said.
Once FabOne is completely operational, the e-commerce firm plans to make the delivery system available for third party vendors.
"But this will obviously take some time to happen," Aggarwal said.
In India, most e-commerce companies depend on third party logistics services except large ones such as Flipkart, Snapdeal and Amazon who are also spending huge funds to ramp up their offerings.
