India’s largest e-commerce company Flipkart is leaving no stones unturned to maintain its dominance in the consumer Internet market. The home-grown online marketplace, which is expected to sell goods worth about US$120 billion this year, has now added furniture to its list of categories.
This move will further intensify competition in the furniture e-tailing space in India — estimated to be around US$220 billion and dominated by specialised players such as FabFurnish, PepperFry and Urban Ladder.
Flipkart said in a statement that customers will have access to a diverse range of over 10,000 small and large furniture products such as beds, sofas, recliners, dining tables, office chairs, centre/side tables, etc. The items are priced between INR 2,000 and INR 150,000 (US$30 and US$2,350).
The Bangalore-based company has partnered with large-format home retailers such as HomeTown, Durian, @Home and Homestop, along with regional sellers across the country.
For now, large furniture will be available for customers only in Delhi, Mumbai and Bangalore. It will be extended across the country in the coming months.
“The INR 140,000 crore (over US$220 billion) Indian furniture market is highly fragmented with products from different manufacturers, wholesalers and retailers. Launch of furniture on Flipkart will offer shoppers a one-stop-shop for any home requirements,” says CFO Ankit Nagori.
He further adds, “While furniture is often viewed as an offline category, research shows that customers are increasingly opting for furniture shopping online. We foresee furniture becoming one of the largest drivers for our home category. Over the next one year, we aim to introduce more selection and brands and scale up furniture for customers to shop from,” he added.
Flipkart will face a different set of challenges
Although Flipkart’s entry into furniture is good news for the industry, it comes with a lot of challenges as furniture is an entirely different category that requires a different set of skills to manage compared to other items such as mobile phones or apparels, says Ambareesh Murty, CEO and Founder of Pepperfry.
“If you see, furniture as a segment worldwide is normally dominated by specialist players. The reason is that (a) lot of things are different in this business. For example, the ability to transport large items weighing hundreds of kilogrammes to hundreds of kilometres is not that easy,” he says.
“Secondly,” he continues, “the quality of the products the end consumer is looking for in furniture is very different from branded items such as mobile phone or fashion apparel.
“Thirdly, it is about the discovery process. When it comes to furniture, you never know what furniture you want to buy until you see it. So, the entire process that a furniture is merchandised on the site has to aid the discovery process of the end consumer. These three things are very different for furniture and home specialist companies. Specialists like us have put all our resources into building these capabilities as opposed to horizontal players,” Murthy ends.
“They will have to overcome all these challenges because the nature of the business is different,” he shares. Started in January 2012, Pepperfry is a managed marketplace that helps merchants and craftsmen sell to millions of customers across India and the world. The company not only markets furniture and home decor products through its site, but also employs carpenters and operates a fleet of over 350 delivery vehicles. In the last three years, Pepperfry has served over two million customers across more than 300 cities.
Pepperfry recently secured US$100 million in funding led by Goldman Sachs and Zodius Technology Fund.
Home decor is capital-intensive, Flipkart is not
According to Rajiv Srivatsa, Founder and COO of Urban Ladder, another online furniture retailer, it is not going to affect his firm. “Overall, home decor is a capital-intensive business. Flipkart is a marketplace that sells anything and everything. We believe that the way we build products and (generate) customer experiences is very different, which is something that cannot come in a marketplace.”
Urban Ladder, founded in July 2012, is an online furniture and home décor company that aims to provide a curated destination for home solutions. The startup has over 4,000 products and 35 categories such as wardrobes, sofas, beds, dining tables, storage shelves, etc. At present, it delivers to 30 cities in India.
Urban Ladder recently scooped US$50 million from Sequoia Capital and Hong Kong-based TR Capital.
Rocket Internet-backed FabFurnish is yet another player in this segment that, as of last year, has crossed a million orders across 35 cities since inception. Besides these specialised players, leading horizontal companies including Snapdeal, ShopClues, Jabong, etc. also sell furniture.
It is yet to be seen how Flipkart — with billions of dollars in its pocket — is going to overcome the distinctive challenges related to furniture e-tailing in a market such as India where bad infrastructure and connectivity issues have always been a headache.