Urban Ladder (UL) was born to solve a personal pain point of one of its founders, Ashish Goel. In 2012, Goel had bought a dining table and a sofa set from a leading brand. When the two pieces of furniture arrived, one was broken and the quality of the other left a lot to be desired.
Goel, an IIT-Bombay and IIM-Bangalore alumnus, recognised the tremendous potential of India's furniture market. He decided to start work on a 'modern' online furniture store that would change customer experience. "While the decision might look impulsive, I had been considering a venture of my own for seven years before I finally took the plunge," says Goel, who had brief stints with McKinsey, India Book House and ACK Media. Soon, he teamed up with his IIM-B batch mate Rajiv Srivatsa, who had held key positions in Infosys, Cognizant and Yahoo!, to launch UL.
Road Less Travelled
The furniture market in India is estimated at $10 billion, of which the residential sector is worth $7 billion, and less than 6 per cent, or $420 million, of it is organised.
Unlike physical retailers who showcase limited inventory due to paucity of space and expensive real estate, Goel realised that the online platform, which was at less than 1 per cent in 2012, can offer far more options to customers. Unlike some of its peers, such as Pepperfry and Mebel Kart, UL decided to build a national brand, instead of just being a marketplace. In other words, it would offer only its own products.
Srivatsa says international success stories, such as that of Wayfair in the US, which was co-founded by an Indian-origin entrepreneur Neeraj Shah, and China-based Meilele, had influenced their decision. "I see no reason why India cannot have a few billion-dollar furniture brands. We certainly intend to be one."
The furniture market, however, was not easy to crack, more so as people from different geographies prefer different types of furniture. For instance, while customers in North Indian states like heavy ornate solid wood, colonial and carved furniture, their peers in cities like Bengaluru and Pune prefer light, modern and modular furniture. Even in metros, it varies and the requirements are often city-specific.
Goel believes a few things set UL apart - aesthetic design, seamless customer experience, innovation in technology and product visualisation. "Unlike other players, ours is a highly curated range. The emphasis is on design and quality," he adds. The competition, however, was quick to dismiss Goel's claims. "When they say curated, it actually means they only have a limited range. Also, building a national brand is very expensive. They are an inventory-led model, which also controls logistics (delivery). It is a capital-intensive model. As funding dries up, capital-light players will prevail," says a marketplace vendor.
Srivatsa pooh-poohs such arguments. Pointing out that their offerings include 5,000 products across 35 categories, he says it is essential to control all parts of customer experience, including logistics, to offer a seamless experience. "Taking ownership of the entire chain means we are able to quality check products at multiple points. We enter each city with our own delivery and assembly team - unlike our competitors who outsource that - so our customers don't get damaged or broken furniture." Goel is more emphatic. "We will not try to be all things to all people. That is why, for a long time, we played around with certain kind of material, expanded only to cities where we could deliver and support. We want to be a focused player." One of the biggest challenges, says Goel, is logistics, given the heavy and bulky nature of their product. "In early days when we used third-party logistics, damages to furniture were about a quarter of all shipped." Now, it is down to 0.3 per cent.
Down to Every Detail
In line with their philosophy to enrich the buying experience, UL has also launched 'innovative apps' to simulate augmented reality that would help a customer understand whether a certain piece of furniture would fit into his or her surroundings. To ensure the products are not damaged in transition, it has also built a staircase climber that can carry loads of up to 120 kg. UL has built a bed assembler that also takes far less time to set up a bed - from 2-4 hours to under one hour. Srivatsa, the COO, says UL will continue to make investments in this area.
Today, it has presence in 19 cities and has raised $77 million from Sequoia, SAIF Partners, Kalari, Steadview and TR Capital. Some well know angels, including Anand Rajaraman, Venky Harinarayan and Ratan Tata have also invested in the company. To become an end-to-end home solutions provider, UL also offers modular kitchens, wardrobes and mattresses. It has its own team of consultants and interior decorators to help customers looking for end-to-end solutions. With the sector witnessing consolidation - Kishore Biyani-led Future Group, which has its own Home Town brand, acquired Fabfurnish recently - and the entry of global players like Ikea, Urban Ladder has its hands full. However, Goel and Srivatsa seem to be unfazed - they welcome competition because they feel their understanding of market requirements, stress on quality and design is likely to help them face all challenges.