Constituting merely 3 per cent of the organised furniture market in India, the online furniture industry has emerged as one of the fastest-growing e-commerce segments in the country. While the segment has been growing at 35-40 per cent for the past five years, the pandemic COVID-19 has resulted in a sudden upsurge.
"Two megatrends driving the demand for online furniture were the increased digitisation and growing share of urban millennials. However, in today's scenario, with people spending a significantly substantial time indoors in the wake of the COVID-19 pandemic, there has been a rise in the demand of various home improvement products - especially over the last couple of months," says Rakesh Kaul, CEO & Whole Time Director, Somany Home Innovation Limited (SHIL).
The pandemic has given rise to new market trends and helping manufacturers explore new business possibilities. With a large percentage of India's corporate employees working remotely and almost all students pursuing their studies online in the wake of the pandemic, demand for home-office furniture such as study tables, office chairs, laptop tables, and others, has almost tripled.
"With home spaces also doubling up as work zones, we have seen an increase in demand for furniture. Customers are searching for ergonomic furniture to set up a comfortable workspace at home with an upsurge in demand for office furniture (3.5x growth), living room seating like recliners (1.8x growth) and bean bags (2.2x growth), among others. Bedroom furnitures such as beds and mattresses (1.5x growth) have also seen a significant uptake," says Suchit Subhas, Director - Large Appliances & Furniture, Amazon India.
Echoing the sentiment, Manish Kumar, Senior Vice-President, Furniture, BGMH and Grocery, Flipkart, says, "There has been a fourfold growth in sales of baby chairs and kids seating. With the options for outdoor entertainment shrinking significantly, online gaming has grown in popularity, which, in turn, has spurred demand for gaming chairs. There has also been an increase in swings for kids for their in-house entertainment. It has been noticed that consumers are preferring comfort over cost, and opting for ergonomic furniture."
The online furniture market in India has been on an upward growth trajectory and one of the key contributors behind the swift growth of the segment is the transition in consumer behaviour from offline to online. Also, given that the preference for purchasing products online has gone up significantly due to the pandemic and the apprehensions around stepping out, industry leaders are optimistic about the segment's growth. The ongoing pandemic has led to increased reliance on online retail for purchasing needs, even among traditional consumers. Pepperfry's online business has risen to 120 per cent of pre-lockdown levels, indicating amplified use of e-commerce options. "This growing transition from offline to online is not only restricted to tier 1 cities but is also penetrating into more traditional markets in tier 2 and 3 cities. In fact, Pepperfry's first-time buyers (FTB) numbers grew at a faster rate than repeat buyers in Tier-2 cities. Our FTB business contribution increased nearly 500bps for tier-2 cities and beyond," says Sanjay Netrabile, CTO, Pepperfry.
Undoubtedly, the new work-from-home culture has triggered massive demand for home-office furniture. Pepperfry's home-office furniture category currently contributes around 25 per cent to the overall sales volume, a category which accounted for about 10 per cent of total sales prior to the lockdown. With increased time at home, consumers are seeing merit in making small additions and changes to their home environment, to make it more aesthetically pleasing as well as functional.
Innovative technology and solutions adoption
As the furniture industry is marred with non-standardisation of products in terms of size and quality with no post-purchase experience, online furniture players are adopting innovative technologies and solutions to cater to increasing consumer demands.
As purchasing furniture online can be little tricky, leading players in the market are exploring augmented reality and virtual reality features within the apps but considering the huge catalogue size in this space, this exercise comes with a lot of constraints and cost vis-a-vis the products' life cycle. "We are evaluating these features, but we plan to do some unique breakthroughs in this domain. Live VM tips via small video snippets will be a more effective tool in terms of time and cost," adds Kaul. EVOK.in is working towards implementing AR and VR to help customers visualise how the products will look like in an intended space. However, these advanced technologies will be employed on EVOK.in in a phased manner along with the smartphone application which they will be launching very soon.
Flipkart's tech-enabled supply chain has enabled the company to expand the reach with damage-free, customer-friendly delivery services even in the remote parts of the country. "Catering to remote parts of India, we have added features such a search spell correction for customers not well versed in English, geo-personalisation that shows products usually preferred by customers in a particular region, 360-degree view, and expert review section dedicated to providing first-hand feedback from experts," adds Kumar of Flipkart. Further, to provide customers with flexible payment options, Flipkart offers affordable payment constructs such as no-cost EMI, debit card EMI, and more, which are rapidly gaining traction. These efforts have led to a 30 per cent increase in the number of office furniture sellers on the marketplace. Over the last few years, Flipkart Furniture has emerged as a strong platform in this space. It offers over 3.5 lakh products along with delivery across 100 per cent of serviceable pin codes, and free installation services in over 9,500 pin codes.
Meanwhile, Amazon has launched Quality Verified program that offers quality assurance on a range of 600-plus products, curated after extensive quality checks and verification on more than 20 parameters. "The range of quality checks include visual inspection for colour, design conformity, damages, dents, stability, robustness, packaging tests and much more. To offer another layer of assurance to the customers, all these products come with a minimum 1-year warranty and easy access to in-warranty services," adds Subhas of Amazon India.
Today the customer demands unique, mechanical chic furniture and this could be possible with personalisation. Therefore, for many customers, customisation remains a big deterrent from shopping furniture online. Saraf Furniture addresses this area of concern as well. Saraf Furniture customises and tailors the furniture according to the need of the customer. "Building a profoundly customised client experience is an e-commerce technique that expands commitment and drives transformations. With the interactive application coming in with the evolving technologies, customers can now change the finish, size, styles, colours, and types of fronts, handles, or countertops and set their traditional homes into all-new modern homes. The technologies have really played a vital role in mending the relationship between the customer and the supplier/manufacturer/retailer," says Raghunandan Saraf (Founder & CEO, Saraf Furniture). Virtual shopping gave a scope to understand the customer's query and manufacture the bespoke furniture for them. Today, customers can gain expert advice on a video call, and even schedule video calls as per time and convenience.
According to the management consultancy firm Redseer, the furniture industry in India currently stands at $17 billion in size and is growing at a CAGR of 15-17 per cent. The organised sector accounts for about 15 per cent of the industry. And the online furniture segment accounts for only 3 per cent of the organised furniture category but is growing at a CAGR of 80-85 per cent, potentially making it one of the major growth drivers for the industry.