Fabfurnish changes business strategy to thrive in the competitive market

Online furniture retailer FabFurnish is undergoing massive tactical business modelling to thrive in the competitive online furniture market. In addition to providing exquisite furniture at reasonable prices, the company will now also be looking to offer an entire range of home design and décor services to all its prospective customers.

The changes come a couple of months after the senior director Ankita Dabas to take over the reign as the new CEO of FabFurnish from the founding members Vikram Chopra and Mehul Agrawal.

Miss Davas appears to be very focused in her plans as she cuts down 50 previous employees to hire 15 new minds across the design, content and marketing wings including the big names like interior designer Aprajita Suri Davar. Tanuj Ahuja was appointed as the new senior creative director as Miss Davas also stressed to fill up the key positions of CTO and marketing manager with some big names as well.

Changes in the Business Model: All-in-one Home Décor Solution

Stepping away from the sole recognition as a mere online furniture retailer, the Rocket Internet-backed company is looking to establish itself as an end-to-end, all under one roof, home décor and interiors solution store to go toe to toe with other online competitive playerslike Urban Ladder, Liv-Space and HomeLane. The company is looking forward to present itself as an online merchandiser of home décor products by working with vendors and tying up with premium brands in sector from India and abroad, increasing their catalogue in the process.

The move to offer curated packaged products is aimed at increasing the average sell by compelling the users to buy a range of products, which in turn, will increase the profit margin by about 5% to propel them forward in their goal to close the financial year with INR 500 crore revenue. In the process, while the private label players will gain up to 50% margin, the marketplaces on the other hand, will make over their usual margin of 15-25% in the furniture category.

Future Plans

Along with the current FabFurnish online virtual home display that allows the customers to visualize their customized home looks and choose the right product accordingly, the company is also looking to offer customized products also to complete a desired look by this year end. In addition to that adding on-call interior designer service to their portfolio is also in the pipeline due to come live around the same time. With FabFurnish revealing their plans to raise $50 million funds from existing investors like Rocket Internet and Kinnevik and possibilities of a merger with global home decor players like Home 24, Westwing and Zanui, FabFurnish sure to buzz the sector in coming days by going global in a big way.

Future of Online Furniture Retail

When it comes to necessities, the need of furniture and home décor is ever present. Everyone wants to design their home interiors in such a way that it reflects their personality. Hence, in this era when the online retail is on the rise, furniture and home décor products are on the prime list of its selling chart. With customers having the opportunity to select from a range of products and acquire the same at a reasonably cheaper price just by sitting at home, this domain is destined to shoot higher with every passing time. Significant efforts from the online furniture and home décor sellers like providing professional interior decoration and design accompanied with quicker installation, also giving the customers more reasons to opt for their services.

Customers’ Concerns

Having stated the pros of the online furniture retail, it is justified to state their laggings also from a neutral perspective. With ever increasing craze of online furniture and home décor product purchasing, comes the problem of consistency of the quality of product delivered. Products delivered are often found to not match the exact specifications stated on the website. In addition, the delivered product is found to have manufacturing defect or are delivered in tampered condition.

Apart from these, even when the products match the mentioned specifications on the website the products often don’t stand up to the expectations in the quality and “feel” factor. This also highlights the incompleteness of the mentioned product specifications which often serves to misguide the customers. Although the furniture etailers have taken up required measures to counter these laggings, as of now they are still behind in eradicating the problem from the core.

AskmeBazaar to try hyperlocal ecommerce model for expansion

Around the same time last year, we were bombarded with some heavy advertising from AskmeBazaar.com across various channels of media. While it left us wondering if that was their A-game to scale up, it looked like a momentary measure that seemed to have phased out.

The latest about the online marketplace is news about extending its hyperlocal offering, Next Day Delivery (NDD) to Hyderabad. Around 70 merchants have been brought on board, selling products across 13 categories. They have been roped in to deliver to customers within 24 hours.

Once on track, the service would be extended to Guntur, Vijaywada and Vizag.

Expansion plans

AskmeBazaar has a merchant base of 1400 currently from around 22 cities. Looks like the ecommerce portal plans to take the hyperlocal delivery route for expansion.

“Currently you see hyperlocal delivery only in the grocery and food segments. We have launched our hyperlocal delivery in this segment in Delhi-NCR recently and will also scale it up over the next two quarters. As for the NDD service, we plan on expanding our services to 50 cities in the next two months,” said Marichi Mathur, Head of NDD at AskmeBazaar.

Specifications of NDD

• Minimum order value of Rs 1000
• Only branded goods can be sold on the platform

“Since we fulfil the order including the logistics, we charge a transaction fulfilment amount from the local merchants, instead of a listing fee,” he added.

Indian ecommerce industry to post 35% growth: Study

NEW DELHI: India's e-commerce industry is likely to clock a compounded annual growth rate (CAGR) of 35% and cross the$100-billion mark over the next five years, from $17 billion at present, according to an Assocham-Pricewaterhouse Coopers study.
Riding on the strong growth momentum of 2015, the e-commerce sector is estimated to see a 72% jump in the average annual spend on online purchases per individual in 2016, from the current level of 65%, the study said.
In contrast, shopping malls are suffering from lesser footfalls leading to around 25% vacancy rate, along with a 30% drop in rentals in the last one year, according to the study.
It observed that the trend in Indian malls is in line with the declining number of footfalls in retail space in over 200 shopping malls across the US, the UK and other countries.
In the US, malls are facing a 46% vacancy rate whereas it stands at 32% in the UK, it said.
"Online shopping has shown a handsome growth while brick-and-mortar malls are witnessing a slowdown. The growth in e-commerce looks impressive because of a low base and rising penetration of the Internet," Assocham Secretary General D S Rawat said.
Besides, with improvement in infrastructure such as logistics, broadband and Internet-ready devices, there is likely to be a significant increase in the number of consumers making purchases online, the study said, predicting around 65 million consumers in India to buy online in 2015, as against around 40 million in 2014.
Some 45% of malls in India are expected to be converted into non-retail space in the next 15 years, which would be replaced with movie theatres, restaurants, discount retailers and the like, the study projected.

Indian Institute of Management: Law on e-commerce needed to protect online consumers

Ahmedabad, Sep 7:  In the era of increased online shopping, a study conducted by the Indian Institute of Management-Ahmedabad (IIM-A) has stressed on a need for a separate law for e-commerce with a view to protect rights of web consumers in India. ”To effectively protect a consumer buying goods or services through e-commerce would need a separate law, as other countries have,” said the study conducted by IIM Ahmedabad. ”European Union has come up with ‘Directive on the Protection of Consumers in respect of distance contract which the Union countries have given effect to. The UK first gave effect to it with the Consumer Protection (Distance Selling) Regulations 2002,” it said.

The recent study titled as ‘Consumer Rights in the New Economy: Amending the Consumer Protection Act, 1986′ conducted by Professor Akhileshwar Pathak of IIM-A also highlighted the problems faced by consumers in E-Commerce. ”In E-commerce, numerous problems arise due to the buyer and seller being at a distance. The buyer is not able to inspect or sample the goods or services. The buyer necessarily pays through a card. This brings in the problem of fraudulence in card payment,” it said.

The study has reviewed the proposed amendments in the Consumer Protection Act, 1986, proposed by the union ministry of consumer affairs. The Union Cabinet had in July approved the new bill as ‘Consumer Protection Bill, 2015′ and Consumer Affairs Minister Ramvilas Pasvan had tabled it in Lok Sabha as well. The new bill seeks to replace the 29-year-old law and proposes to set up a Consumer Protection Authority which will also have the power to initiate class suit against defaulting companies. The new bill came against the backdrop of emergence of complex products and services in the era of growing e-commerce business in India that has rendered consumers vulnerable to new forms of unfair trade and unethical business practices.

E-commerce players bet on offline presence

According to market sources, in 2014 over 70% of e-commerce website-based transactions came from the 10 largest cities of India.

In February this year Amazon grabbed the headlines by announcing an offline store in Manhattan. Amazon may have realised the need for an offline store now, but several online players in India have been acquiring an offline presence for long.

Furniture portal Pepperfry, according to JLL India, became the latest e-commerce player to go hybrid after it leased 1,800 sq ft space at Linking Road in Mumbai. "For us, offline stores are part of our marketing campaign and these will be more of experience centres," said Ambreesh Murty, co-founder and CEO, Pepperfry. The company plans to have eight stores by the end of this year.

Among the early players that had offline presence as part of their growth strategy was Firstcry, an online portal for babies and kids. The company has 124 offline stores, which it intends to increase to 200 by January.

"We are opening 10-15 stores a month. We always wanted to be present at every touch point. Within six months of our operations we had started building our offline presence and now we also have a mobile app for those who want to shop on the go," said Anuj Jain, senior vice-president, marketing, Firstcry.

Firstcry has integrated three platforms to understand buyers. "It allows us to map customer behaviour. We have a larger presence in Tier-II and Tier-III cities," added Jain.

"The biggest nightmare for an online seller is to deal with a shopping cart abandonment rate of 70-80 per cent. The sweet spot is to be in a middle zone where online sellers connect with customers and also promote their products through multiple avenues," said Anuj Puri, chairman and country head at JLL India.

The trend to have offline stores also highlights the need to have access to more customers. According to market sources, in 2014 over 70 per cent of e-commerce website-based transactions came from the 10 largest cities of India. The vast majority of transactions, particularly in Tier II cities and beyond, happens in physical stores.

"Having an offline store adds to a bunch of other parameters such as building trust and awareness about products and the company," added Kashyap Vadapalli, chief marketing officer, Pepperfry.

Lenskart has opened stores in malls to connect with customers. Freecultr, an online fashion brand, is also moving into the physical space.

Murty said, "For one outdoor campaign in a city like Bengaluru the marketing spending for a month is Rs 50 lakh. Whereas to set up an experience centre we spend Rs 40 lakh annually."

RETAIL PUSH

• Online portal Firstcry has 124 offline stores and it plans to increase it to 200 by January 2016
   
• Lenskart has opened stores in malls to connect with customers
   
• Online fashion brand Freecultr is also moving into physical space
   
• In 2014, over 70 per cent of online transactions came from top 10 cities. The vast majority of transactions still take place in stores