As per Technopak estimates, the Indian Home Décor market which stood at $13 billion in 2010 will touch $20 billion by 2015. The category is seeing a huge scope and acceptance among consumers when it comes to digital buying. Popularity of this category in online retailers is a consequence of higher average ticket size and profit margins when compared to other categories.
This is a niche category where both sellers and consumers are comfortable in etailing, as the market was unorganized up till now with few brands and rest mom and pop shops catering to the needs that prevailed. Inclusion of home decor in online retail has provided a reach and option for enthusiastic buyers and young couples who otherwise had to rely on local retailers for designs and quality.
The market is unorganized with only 4 or 5 big players in comparison to other categories, Apparel, electronics etc where more organized players are present. The entry barrier in this category still seems low and provide better scope for differentiation and even a private label for merchants.
Facts about the Category as per various experts
1) Home Decor is almost a $15-$20 billion category including offline and online.
2) Out of this $20 billion market 40 % – 50% is furniture and rest are pure home decor items such as cutlery, kitchen items, fancy lamps etc.
3) In furniture, out of 40%, 25 % is the larger furniture items such as Sofa, Beds etc and rest small furniture items such as linen, bar table, chair , stools etc.
4) There is a huge scope of this 25% of smaller furniture items and rest 60% of pure home decor items in online because of their smaller sizes, not much need of touch and feel and easy logistics comparatively.
1) Supply chain and inventory management are the biggest challenges. Also demand forecasting is very hard in ever changing economy as the interests and trends are changing rapidly with communication and internet taking over.
2) If the demand for a particular products soars up then its hard to fulfill it from the backend in comparison to other categories such as Apparel or groceries where more options are available.
3) 25% of furniture category constitutes of large items such as bed, sofa, etc and these are the items which Indian consumers still want to refrain from buying online as they want to have a touch and feel factor involved.
1) Emerging as one of the profitable categories in eCommerce market.
2) Average ticket size is larger, with a margin of 30-40% thus consumer acquisition cost is justified.
3) All horizontal players are expanding in home decor.
4) Mainly mom and pop shops are operating in this category catering to a smaller consumer base within a village, town or city except few large players who are also limited to geographies, so Online retailer can leverage the reach component.
5) A consumer sitting in Andhra pradesh has no access to the furniture made in rajasthan ideally, but with online he can get hold of that inventory at almost same prices.
6) 3 online retailers including Zansaar, Pepperfry, Fabfurnish were launched last year in Q1 in home decor niche thus proving the demand in the category.
Online players in this category
There are many players who have already made their entry into this niche segment and are doing unexpectedly well. Some such players are:
1. Urbanladder: Launched in 2012 and a venture of Bangalore-based Descasa Decor Online Pvt Ltd, Urbanladder is currently delivering to Bangalore, Mumbai and Delhi / NCR region (Gurgaon, Noida). The online store has made a strong foothold in the segment and have recently raised $1 million in series A funding and is looking to close a Series B round in coming months.
2. Pepperfry: An online Home & Lifestyle marketplace, launched in January 2011 is having a current user base of 7 lakhs and 3 million unique visitors on monthly basis. Also it is doing almost 1200 orders a day. The company has raised $13 million in total with $8million in Series A(2011) and $5 million in Series B (2013).
3. Fabfurnish: A rocket internet backed venture and the most visited online home store in India, fabfurnish was launched in January 2012. It is currently known for its designer furniture, furnishings, décor items and kitchenware.
4. Zansaar: A Bangalore based startup and a brand owned by Singapore-based Salar Online Pvt Ltd has forayed into online home decor space in 2012. Backed by Accel Partners and Tiger Global, it has recently raised $6 million funding from them with an aim to bring in exclusive range in categories such as Home decor, Kitchen Tools, World Foods, Cushion Covers.
5. Roomstory: An online multi-brand home store, Roomstory is offering products across three classifications, Bed & Bath, Décor & Furnishings and Kitchen & Dining. It was launched in 2011 with an aim to become a one stop destination for all home decor products. The company is currently looking for funding of around $1 million.
6. The Home Label: An online marketplace by Sussanne Roshan, Home Label is backed by The Label Corp., the first retail brand in the online marketplace to introduce a unique tastemaker styled model. Under this business model, the celebrity Creative Directors bring along an assortment of exclusive and trendy products.
7. Bedbathmore: An online portal, bedbathmore deals in home decor, bed, bath and other furnishings. It also has its own warehousing facility in Mumbai. It is a part of Creative group, one of the India’s largest exporters of home furnishing and apparels to US and Europe. Bedbathmore also raised an undisclosed amount recently in Series A funding from Blume ventures with plans to establish private labels and expanding the technology team.
8. Mebelkart: A Bangalore based startup, Mebelkart provides a range of products including Bean bags, Seating, Home furniture, Kids furniture and Décor. It claims to be ‘the biggest dealer in Beanbags and Office chairs’. Also, it has tie-ups with some of the major furniture companies like Durian, Zuari, MoBEL, Rhome and Wood Dekor.
The other major online retailers with Home decor categories include Jabong, Yebhi, Homeshop18 and Snapdeal.
Although, the online retail is grabbing the attention, there are players in the offline segment too like Godrej interio, D’Decor, Zuari, Durian, @home, etc. which are there from years and are still among the best choices for the consumers.
And as the above category has made a strong mark in International markets; Who will be able to lead this online category in India? either the pure play online players or retailers going online? will have to be seen in coming times.
(Image Credit: Modern Home decor)