Ecommerce in India has been lately dominated by categories such as electronics, books and apparels. However sensing the opportunities with growing number of online shoppers entrepreneurs have started testing categories having high touch and feel factor like handicrafts and even furniture.
Bangalore based Urbanladder, one of the early evangelizers in home and furnishing category has been growing well over the past 8 months. The company recently crossed 100k visitors and claims to clocks hundreds of orders every month.
Urbanladder, which raised $1 million in 2012, has never extended any coupons or discounted its offering historically. The company used to ship its products across the country, however later it had limited its shipping capabilities only to 3 cities- Bangalore, Delhi and Mumbai.
To understand the business opportunities in online furnishing space, NextBigWhat spoke to Rajiv Srivatsa, Chief Operating Officer, Urbanladder. Edited Excerpts
How has been the year 2012 for Urbanladder in terms of Gross Merchandise Value (GMV) sales, orders per month and traffic?
Rajiv: We launched in July 2012 and the first year has been fantastic in terms of traffic, sales, customer feedback and growth. We are clocking thousands of customers monthly; we crossed a 100k visitors in February and we are seeing month-on-month growth of close to 60%. Ticket size is in excess of Rs.10000.
In recent times, most of the ecommerce companies cut their marketing spends significantly. What about Urbanladder’s startegies on marketing side? Has Urbanladder reduced marketing spends?
Rajiv: We have actually been increasing our marketing spends since our fundamental business economics are holding well and we are growing. Our key focus in marketing is on interactive, engaging and highly visual mediums – so we have a strong focus on Facebook marketing and we are just starting with display ads with specific high-end publishers.
Urbanladder had started nationwide delivery for a brief period, later the feature was rolled back. Why it is so?
Rajiv: In other cities where we did not control the service ourselves, customer experience was sub-optimal. Hence, we quickly set-up our own service and delivery in Mumbai and Delhi (top 2 markets after Bangalore) and rolled back deliveries across all other cities.
Urbanladder had raised $1 million in August last year, which according to our estimate will last for few more months. What’s your plan on fund raising front?
Rajiv: We are seeing strong interest from investors because of our outlier unit economics and strong positive customer feedback. We have a comfortable cash position and will raise subsequent funding at the appropriate time.
Urbanladder is pure play private label in furniture. Tell us what it takes to create private label in online retail?
Rajiv: A very sharply articulated brand is critical in building private labels.Three factors which we believe are critical in getting the brand articulation right:
– Get the 101 of segmentation, targeting and positioning right – you need to pick an audience you will go after and work out product, communication and pricing for that target audience; you cannot try to be everything to everyone
– Control end-to-end on design to delivery – you need not own many of these assets but strong focus on quality control of the physical product, clear messaging in line with your brand and maintaining very high service levels all go a long way in providing a very tight product and brand experience
– Build a values-driven organization – even for a young company, we believe there are certain values that you hold right from day 1; do all you can to maintain those identified values
Discount is something which fueled the phenomenon of online shopping in India, however Urbanladder never discounted. How did you survive without it and in which ways it helps in having sound unit economics?
Rajiv: Our goal is to give customers a great product and service experience at a reasonable price point. Our pricing philosophy is driven by our core value of honesty and transparency – we do not believe in artificial mark-ups and reductions by striking off the price. Given these factors, discounting just does not work for us. Customers who have seen competitors’ products and their prices swear by the value we provide for our product and service.
What sells and where?
Rajiv: We get a lot of orders for big-ticket items such as beds, sofas, TV units, chest of drawers and dining sets. Coffee tables and book racks are our top selling categories overall because we have the deepest range there. Revenue is well distributed across Bangalore, Mumbai and Delhi (these are the only 3 cities that we serve)
What are your future plans?
Rajiv: Our vision is to make Indian homes beautiful and we aim to transform a million Indian homes in the next few years. Immediate focus areas for the next 6 – 12 months include expanding our furniture catalog (more dining tables, kids range, balcony, other materials etc.), expansion into more cities (Chennai, Hyderabad, Pune) and investments in online product, technology and merchandising to create better customer experiences (room settings, better mobile experiences given a lot of users access our site from tablets).
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