The coming together of a robust real estate market with a tech-savvy population has made the country’s IT capital set online furniture sales on fire.
In the rapidly growing world of e-commerce, Bangalore tops the charts in the overall revenue contribution for furniture e-tailers, who are chasing a largely unorganized market that’s $18 billion in size.
For home decor and furniture e-tailer FabFurnish.com, Bangalore contributes about 21% of its revenue – higher than even larger consumer-led markets like Mumbai and the company’s home base of NCR. And for Urban Ladder, a premium-furniture e-commerce startup, Bangalore is its biggest market, constituting about 30% of the revenue.
“There are a couple of factors that favour Bangalore – the internet penetration in the city and a very large tech-savvy audience,” says Ashish Goel, co-founder, Urban Ladder. Bangalore logged a 43% rise in internet users over the past one year, adding 3.8 million netizens as per data available with the Internet and Mobile Association of India.
Pearson India ex-CEO Srikanth Iyer, who recently co-founded HomeLane, a startup focused on providing home set-up solutions, says: “In terms of willingness to shop online, even for big-ticket purchases like furniture, Bangaloreans are on top.”
A year ago, Urban Ladder launched its sofa range costing between Rs 45,000 and Rs 85,000. “Everybody said we were crazy. As of now, we are among the top three sofa sellers in Bangalore across even physical stores,” adds Goel. The e-tailer sells around 100 sofa units a month in the city, competing with established offline players such as Home Center and HomeTown.
“Furniture as a category is most popular among Bangalore customers, the reason being the city has a huge number of modern dwellings. Only 3% of Bangalore’s population lives in slums, as compared to 60% in Mumbai and around 18.7% in Delhi,” says Vikram Chopra, founder and CEO of Fabfurnish.com, which is backed by German incubator Rocket Internet.
“With men contributing 51.5% of Bangalore’s revenue, it explains why recliners are one of the most popular products shopped for,” Chopra adds.
Around 60% of the e-tailers’ revenue in the city comes from the 25-35 age group. Doing up the interiors of a home in India consumes the second largest share of wallet after real estate purchase costs.
Data shared by HomeLane shows that from the beginning of this year, a million homes were handed over across the top ten cities in India. Of these NCR constituted 40%, Mumbai 25% and Bangalore 10%. But given the fact that Bangalore is an end-user market, and not an investor-led one like Mumbai or NCR, the proportion of people moving into their homes and setting them up is much higher. “Besides, owing to the IT industry, Bangalore has a large young transient population, for whom shopping online for furniture is increasingly becoming the norm,” says Goel.
Source : ET