Urban Ladder, a Bengaluru-based online furniture and home decor marketplace backed by Ratan Tata, has raised $77 million so far. Recently it upgraded its app with a virtual reality feature that enables users to design their homes.
Three years ago when Ashish Goel and Rajiv Srivatsa moved to Bengaluru they realised the dearth of trusted furniture brands in the country when they found their own houses devoid of high quality furniture. “The realisation that furniture shopping is not an easy task, came from a personal pain point for me and Ashish. We noticed that there wasn’t a single brand, online or offline, which had the reputation of being a one-stop shop for every kind of furniture needed. Hence, seeing a market opportunity and customer need in this category, and the quick adoption of e-commerce in India, we started Urban Ladder,” says Srivatsa.
Backed by Rata Tata, Urban Ladder, a Bengaluru-based online furniture and home decor marketplace has raised $77 million so far. “The company has its own delivery team and they are trained enough to deliver on time, assemble and install the furniture for their customers. “We are way ahead on timely deliveries, we work very closely with our sellers to predict demand and hold inventory on their side. To that extent our average delivery time line across all categories is around 8 days whereas most of our competition takes 25-30 days,” adds Srivatsa.
For the last 6-8 months they have been working extensively on technology, specifically on their app. “The Catalog app is our core app and then we have specific apps one of which is Living Spaces that focuses on sofas and the other is called Urban Storage which helps our customers with wardrobe for their homes,” explains Srivatsa. They have recently launched kitchen modular solutions and are also working on launching many categories in decor as well. Recently they took the whole experience of buying furniture from online to the next level by upgrading their app with a virtual reality feature that enables users to design their homes using the app.
The company is also aggressively working towards city expansion and wants to reach out to a larger audience and establish a strong brand positioning for Urban Ladder. “We are now present in 18 cities and will expand our geographical presence to 30 cities by the end of the year,” he says. The overall furniture market is valued around $30 billion, according to his estimates, but the industry is a fragmented one. “Organised retail in this category is less than 4% of that $30 billion with a lot of players competing in the $70-80 million ball park and the entire online segment is less than 1% of this industry. Since the online industry is still growing there is no point of looking at competition now,” explains Srivatsa.
At present Srivatsa’s main focus is to grow in this market as the competition today is highly fragmented in terms of market share. He also mentions that the offline growth has been static for last 7-10 years and that way the growth of online as a category has been phenomenal. The success of Indian online furniture players like Urban Ladder, Pepperfry and Fabfurnish has started attracting foreign brands to try their luck in the Indian market. Fabelio, an Indonesian based home decor startup co-founded by BITS Pilani alumni recently raised $500,000 and plans on entering the Indian market to help Indians shop for Indonesian furniture.
However, Srivatsa does see the offline industry as a major competition.“More than 85% of the furniture market is still unorganised, which means our biggest competition is the local carpenter. Because of the lack of a trusted brand in the furniture industry, the local carpenter still manages to enjoy the largest share of the pie. We want to help reduce the hassle of dealing with a carpenter and make good designs easily accessible to Indian home shoppers,” says Srivatsa.
Though there are a lot of challenges in terms of setting up supply chains, building technology and making sure that the customer understands the whole experience while also ramping up the team to that extent, these are challenges that they have overcome to some extent. Srivatsa shares that one of the major challenges that he faced initially was the touch and feel gap that his customers were wary about, however over time, solutions for product visualisation have helped the brand gain their customers’ trust.
“When we started we thought our ticket size would be around R5,000 but today our ticket size is R20,000 and it essentially means people have really taken this brand and category seriously,” says Srivatsa. Moving forward the company aims to grow four times this year and become the largest home decor player online and offline in the country.