Furniture etailers to bank on offline stores & low-cost products to counter sluggish sales

Online furniture was touted to be the next big thing in the Indian ecommerce industry. But the contribution of this category to the overall ecommerce sales hasn’t been impressive in the last two years. While mobile phones and fashion category continue to grow from strength to strength, furniture sales seem to be sluggish.

• In 2015, mobiles phones’ contribution to Indian ecommerce industry’s sales was 42%, fashion 20%, and furniture less than 1%

• In 2016, mobile phones’ contribution increased to 48%, fashion to 22% and furniture only 1-1.5%

Low cost products and offline stores to the rescue

Industry experts believe that the inherent nature of the category doesn’t leave too much scope to increase the volume of sales. Online furniture as an ecommerce vertical is quite similar to big appliances, such as refrigerator and air-conditioners, as people buy furniture very rarely and only when needed.

Sreedhar Prasad, partner at KPMG India reasoned,

“Furniture consumption cannot be enhanced significantly. There is only a limited space in your house for furniture.”

But that doesn’t mean that the industry players would stop trying and experimenting with new business strategies.

The market leaders and rivals Pepperfry and Urban Ladder are looking to invest in offline outlets and introducing an affordable range of products to capture buyers’ attention.  In April this year, Urban Ladder decided to convert sellers into contract manufacturers and focus on single brand soon after receiving fresh funds.

On the other hand, Pepperfry announced its plan to sell offline in February. From building experience studios to redesigning commission structure, the etailer is leaving no stone unturned.

Customer centric approach is the key

In one of his interviews this year, Urban Ladder’s co-founder Rajiv Srivatsa spoke about fighting distractions and looking at things from customers’ eyes.

“As an organisation, we truly believe in the value of ‘customer obsession’. It is one of our core values and defines most of what we do. What is the right thing for the customer? It’s easy to get distracted and try and do a lot of things, but then you will end up biting more than you can chew,” shared Srivatsa.

Because the online furniture industry is so unstructured at the moment, etailers don’t mind trying out innovative methods or retracting their steps to fill the gaps. In the process if few mistakes happen, e-furniture players don’t get dissuaded by it.

Ecommerce biggies’ connect with furniture

Besides the niche players like Pepperfry, FabFurnish, Urban Ladder, Furlenco and LivSpace, Indian ecommerce biggies too are interested in selling big ticket items like furniture. Amazon India is setting up new warehouses and hiring people, especially for large product categories. Flipkart also aims to be a top furniture etailer.

Some believe that the online furniture industry needs consolidation to be able to sustain in this competitive market. Would the entry of ecommerce top ranks help to boost the sluggish sales? Is merger & acquisition between rival furniture etailers on the cards like Flipkart-Snapdeal?