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Aradhika Sharma
Millennial couple, Sharon and Shiva, recently purchased a flat in Zirakpur. Sharon is an investment banker while Shiva works in an IT firm. They decided to eschew the traditional carpenter and onsite stores for online furniture purchase. Within just days of moving in the flat, they decorated it the way they wanted — trendy, colourful and functional and they were ready to settle.
“When perfectly good furniture is available online, why would I trudge around in dusty shops and by-lanes trying to choose the wood, finish and fabric? All that I need is a smartphone with a good interface and a credit card, and my dream home is ready to move in. No fuss, no mess,” smiles Shiva.
The figures say it all
This buying attitude has been a boon for online home stores, evident by the volume of sales. Pepperfry, a Mumbai-based firm, has set a target of Rs1,400 crore of GMV (gross merchandise value) this year. The six-year-old marketplace is backed by big investors like Goldman Sachs, Zodius Technology Fund, Norwest Venture Partners and Bertelsmann India Investments, etc.
In FY16-17, the revenues reported by Pepperfry in its ROC (Registrar of Companies) filing were a mind-boggling Rs 127.5 crore ($18.75 m), making it the biggest online furniture and lifestyle accessories e-tailer. Pepperfry is present in 500 cities with delivery services to 5,000 locations and has 0.5 million registered customers of which over 60 per cent are repeat customers. Another online store, Urban Ladder reported a revenue of Rs 55.2 crore ($8.12 m).
Pepperfry has already transformed itself from an online furniture store to a brand, with 16 swanky studios in various metros. Urban Ladder is in the process of doing so. These concept stores provide the customers with an opportunity to “touch and feel” the merchandise. The advent of the furniture giant, IKEA that opened in Hyderabad, could be another game changer in the growing market that already offers great discounts and designs to its buyers. Also in the arena are players like Amazon, Godrej, Livspace, etc.
Who is the buyer?
Surveys show that millennials (those born after 1980 and the first generation to come of age in the new millennium) are rapidly becoming the largest online purchasers of furniture and home accessories. This segment accounts for a significant and growing percentage of the work force. They are savvy consumers and “digital natives”. Therefore, e-commerce portals that provide the services and products these millennials need have notched up the products they offer. Driven by what they call “work/life balance,” this segment earns double incomes, has small, nuclear families and aspires for comfortable, secure lifestyles. The biggest clients of online furniture retailers are mostly economic migrants who have left homes in quest of a better life in metros, setting up homes, permanent or temporary, in places that offer them good careers. In fact, almost 10,000-15,000 new such homes are added across metros every month.
The rise of households that consist of a single person or two persons means that there is more demand for small, easily portable furniture. Says Ansh Sharma who rents out his flat to the PGI doctors: “I furnish my house with the bare minimum furniture. Because I know that within a few weeks of moving in, the tenants will start ordering their own stuff. First a workstation or desk will arrive, followed by a swivel chair, a couple of tables, a portable bar, a sofa and so on. People like to have their own things around them.”
Another factor is that a large number of women have joined the workforce and gained spending power that they exercise on lifestyle accessories, holidays, experiences and homes. “I like to renovate my home from time to time,” says Sangeeta Chibbar, a business developer in an IT company. “Although furniture is not changed (and therefore purchased) as often as clothes or mobiles, yet, I like to redesign my space with nice pieces of furniture. Sometimes, it takes just a single ottoman to change the entire look and feel of the room.”
“When I shifted to Mumbai, my sister wanted to gift me some chairs for my new home,” says banker Vivek Sharma. “She sent me the links of various chair options. I chose, she ordered. The e-tailer delivered at a time convenient to me and now I’m the master of two cool new chairs!”
Apart from the millennial buyers, the furniture market in India is driven by the immense growth in the real estate, tourism and hospitality sectors. These sectors require ready-to-assemble, standardised furniture that is smart, sturdy and meets international standards. With technology going increasingly high-tech and social media playing a part in the user choices (the popular sites include Tumblr, Twitter, Pinterest, LinkedIn and Facebook) and developing demographics, the boom is nowhere near over.
In addition to metros, people in smaller urban centers have jumped on the online buying bandwagon. The tastes of people are increasingly getting global. Smaller vendors may not be able to cater to these. Online portals offer an ever-increasing and rapidly changing range of products, secure payment options and guarantees.
Says Prachi Kaushal, a home maker: “What is encouraging is that if you don’t like a piece of furniture, you can easily return it. On the other hand, if you get it made, you just have to accept the mistakes that the carpenter has made or if the design turns out different from what you thought it would.”
Designs and trends
Since online retailers face pressure in terms of the choices that they have to offer, they must keep upping their ante about the designs and décor they offer. Promising “interesting quirky designs”, regency style, ranch style, moulded, office and children’s furniture, these portals are rushing to cover every base to get a greater slice of business. Buyers can opt to buy an entire concept for their homes or rooms, buy themselves a modular kitchen, change their mattress, curios and showpieces, carpets and rugs and even hardware and electricals — and they don’t have to go out to do so. You get great deals, exchange or return offers sitting at home with the portals falling over themselves to lure prospective customers by any means.
Rent a sofa
The latest offering from these portals is the concept of online renting of furniture and interior concepts. You simply choose your product and the tenure you want it for, make the payment and it’s yours for that time.
However, the booming online furniture business does not mean that the traditional furniture shops and carpenters have gone out of business. The brick-and-mortar stores and workshops continue, but future trends demand consolidation in the casual furniture business. If a manufacturer or retailer wants to stay in business, he certainly needs to have an online presence, thus combining the two models, even if he doesn’t plan to make a direct sale from it.
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