Godrej Interio claims to have established a very comprehensive supply chain network, and that is the biggest advantage
Godrej Interio, one of the country’s oldest furniture retailers, recently marked its presence online with an e-commerce website. With global player Ikea setting shop in India, and the likes of Amazon and Walmart (via Flipkart) eyeing the category keenly, this move was imminent. Anil Mathur tells Devika Singh why the category demands an omnichannel approach, the potential of the home furniture segment, and more.
People are still wary of buying furniture online. How are you tackling the challenges that come with online retail?
We have not launched our website for a pure e-commerce play, but more to maintain an omnichannel presence. While offline retail has an advantage, as customers can touch and feel the product, it also has limitations when it comes to displaying products. An e-commerce site, on the other hand, has an endless aisle and numerous products can be displayed. So, the idea was to have a site which would enable customers in any part of the country to enter through online channels and go offline. Customers in smaller towns have to often go to the bigger cities in search of variety; but now, with our website, they can look at our products and order them through the website or our dealers, whichever is easier for them.
We have established a very comprehensive supply chain network due to our offline business, and that is the biggest advantage we have in comparison to other players who are going from online to offline. Our dealers are going to be involved in the delivery of products just like they are for our offline channel. Moreover, we won’t be charging anything extra for delivery. Initially, we plan to offer our service to 2,000 pin codes.
How much of a threat are marketplaces to you, considering you will now be directly competing with them?
We are present on marketplaces, too. It doesn’t matter which channel sells our products as long as customers are buying them. Right now, we get barely 1% of our business from online through marketplaces; but with our website in place, we aim to increase the share of online to 10% in the next two years.
Consumers want to visualise how furniture would look in their living spaces before buying them. Marketplaces have their limitations as they cater to several categories. But a good website that offers visualisation for products can help consumers make the purchase decision. Secondly, people also like to be sure about the quality of the furniture. But there are very few branded players in this category and that gives us an edge. We are growing at a CAGR of 15% over the last couple of years, compared to the market growth rate of 7-8%.
Are you planning to increase your offline presence? How have your new brands Script and U&Us fared so far?
Currently, we have 56 exclusive showrooms in 20 cities and 800 dealer outlets across India. In the next one year, we plan to add roughly 100 dealer and franchisee outlets, and 10-12 outlets of Script and U&Us. Script, which we launched a year back, is operational only in Bengaluru, Mumbai and Delhi. It is a slightly more premium and niche brand; we aim to reach the mass market with some cutting-edge projects. With U&Us, we offer customisation through technology, so that customers don’t have to go through the pain of getting a carpenter. However, we are still in the learning phase when it comes to both these brands, and hence it is too early to share any numbers.
What will be your focus area going ahead – B2C or B2B? How much does each one contribute to your business?
A large chunk of our business comes from office furniture. We are aiming to end this year at Rs 2,400-2,500 crore, of which approximately Rs 1,500 crore could come from office furniture, and the rest from the home segment.
Our focus is on both these segments, as they exist in silos. The home furniture business is growing at a faster pace than B2B, because the office furniture segment is changing. The number of seats is increasing with office spaces getting smaller; however, because the furniture is getting lighter, our per unit value is coming down. When it comes to homes, on the other hand, with an increase in nuclear families and frequent refurbishing, there is a huge growth opportunity.