As offline furniture stores struggle to make money, e-commerce players are giving them a leg up by including them on their respective platforms. From Future Group’s Home Town to Neelkamal’s @ home to smaller brands such as Durian and Bombay Stores have listed their wares on the market place sites of online players such as Pepperfry and Fab Furnish to garner additional sales at a time when their bottom lines are under pressure.

Furniture players in brick & mortar avatars have realised the limitations of their format which entails huge real estate costs to stock and display the category, thereby eating into sales and profitability.

“Players such as Lifestyle’s Home Centre cannot go beyond yearly sales of ₹500 crore as real estate costs will eat into profitability. Most of them may have no choice but to turn to e-commerce firms,” says Vikram Chopra, Managing Director, Fab Furnish.

With sofas and beds being the largest selling category, Fab Furnish is now targeting sales of ₹100 crore every month with hopes of breaking even in the next two years.

“Cost of real estate is almost 30-35 per cent of sales of brick & mortar furniture retailers and most of them have no choice but to mark up their products unlike online players. With passage of time, they will have no choice but to turn to online sales. Even in the US, online players have been eating into the market share of traditional furniture sellers,” says Rajeev Srivastava, co-Founder, Urban Ladder.

The organised furniture category is estimated at ₹80,000 crore in which online sales is currently contributing less than one per cent, making it the fastest growing channel for the online furniture majors who are projecting stupendous growth rates.

At a recently concluded seminar, Pepperfry’s CEO Ambareesh Murthy declared his company was growing at 300 per cent and online sales in furniture will soon overtake offline players.

Meanwhile, most of the offline players are also developing their own e-commerce capabilities. “We will overhaul our e-commerce operations and have a common inventory for both online and offline sales,” states Asim Dalal, Managing Director, Bombay Store, a major in the home décor segment. Godrej Interio, the furniture division of Godrej & Boyce, is experimenting with Pepperfry. “We are trying to learn by listing on Pepperfy before we decide whether to go on our own or through furniture market place sites as a strategy in the long run,” added Bedraj Tripathy, Senior General Manager, Integrated Marketing, Godrej Interio.

Related Topics
comment COMMENT NOW