E-Commerce Driving Growth Of Furniture Market In India
Driven by the pandemic and the lockdown, ecommerce has witnessed tremendous growth in 2020, and the trend seems to continue well into 2021. The Indian e-commerce market is valued at USD 25.7 billion as of FY 2020, having grown at CAGR of over 35%, and is expected to reach USD 99 billion by 2024, growing at a CAGR of 27% over a period of 2019-2024. While factors like increased broadband connectivity, smartphones and the rise of digital economy, offer strong supportive infrastructure, the innovations on part of e-retailers, using emerging technologies like AI and augmented reality, have further helped push newer categories on the e-commerce platform, contributing to the growth.
And furniture is one such category that has witnessed massive growth in the online space, over the past few years, with the pandemic accelerating the move. While the Indian online furniture market currently constitutes only 3% of the overall organised furniture sector, it has been growing at the rate of 30-40% YoY, for the past five years. The year 2020, saw some remarkable developments by key players that further fuelled the growth. As per reports, Pepperfry's online business has risen to 120% of pre-lockdown levels, indicating amplified use of e-commerce options. In November 2020, Reliance Retail Ventures Ltd. (RRVL), a subsidiary of Reliance Industries (RIL), acquired a minority stake of Urban Ladder Home Decor Solutions Pvt. Ltd. for Rs. 182.12 crore (US$ 24.67 million). Godrej Interio, one of the leading furniture manufacturers and retailers, launched its own ecommerce operation in March 2020, to take on the likes of other furniture eRetailers, like Urban Ladder, Pepperfry and Ikea, with an aim to cater to over 2000 + pin codes across the country through its online sales.
Further, with the advent of international players, the furniture market in India is expected to get more organized and move towards omni-channel business models, with an innovative expansion of categories on the rise. Listed here are some key factors on how eCommerce is set to play a role in this growth:
- Innovative eRetail: One of the key factors driving the shift of furniture retail from traditional brick and mortar stores to the online space, is the technology empowered innovations made possible by modern e-commerce platforms. From well listed and segmented products based on colour and function and area of the space, to the use of augmented and even virtual reality, online retail is now offering consumers a near perfect and immersive buying experience. There are apps and portals offering consumers, for example, the options to set up a complete home/ office through AR and VR, helping them visualise and select the best piece for furniture.
- Personalisation: Driven by data based analytics and well researched consumer buying patterns, online retailers are able to offer personalised solutions to consumers, based on their preferences. Customers can now request specific fabric and colour of furniture upholstery to match the home décor, or even choose sustainable/ green furniture designs, based on their individual tastes. Personalisation in terms of functionality as well as the age of the consumer etc., can also be made, through easy online interactions with virtual assistants and online consultations, leading to a personalised buying experience.
- Impactful consumer engagement: Through digital advertising, social media campaigns, and virtual assistants for personalised customer service, online retail has been leveraging AI and data analytics for effective, relevant, and impactful consumer engagement. Apart from offering clients personalised customer service and customised shopping options, online retail has also been instrumental in helping modern consumers compare, evaluate and make the best choice of furniture, keeping in mind the locality, budget, functionality etc., making the purchase most relevant and value driven.
- Wider Reach: One of the key factors that are driving the growth of ecommerce, is the expert Hyper-local logistic network. From efficient and timely deliveries with options to track shipment, to easy returns/ exchange policy, value added services like furniture assembly, and dismantling by last mile service providers, have all been instrumental in the expanding reach and popularity of online furniture retail. COVID times also highlighted the assured ‘no contact’ delivery features by these e-retailers, which further ensured consistent growth.
- Value Added Services: Apart from online purchase and easy deliveries, returns or exchange of furniture, online players are also high on offering several value added services. From offering innovative ‘rental furniture’ solutions – a sector that is also steadily rising, to flexible payment options, servicing and maintenance of furniture and customised interior décor consultations, a lot of online furniture retailers are going all out to please and engage with the new age consumers, adding value to the smallest of purchases.
Considering the above factors and the already steady rise of furniture ecommerce, it is apparent that the future for Indian furniture retail is no longer set to be confined to the traditional modes but will, in fact, take up an omni-channel approach and will witness a substantial growth across metros as well as tier 2-3 towns of the country. Driven by the millennial consumer, the Indian online furniture retail is set to evolve into a holistic and comprehensive furniture and interior market, offering consultation, discussing design trends, offering personalisation and annual look books, etc., transforming the way India purchases and uses furniture.
The author is Kirit Joshi, Co-founder & Director, Spacewood Furnishers
