Renting furniture is now the default option for many people in tier I cities

Furlenco, a design-led furniture renting company, has been catering to urban Indians who prefer renting, be it home, car or even household appliances. In an interview with Mint, founder and CEO Ajith Mohan Karimpana talks about challenges in penetrating a buy-obsessed Indian market, expansion plans and more

How exactly does Furlenco work?

We are a subscription-based model where customers pick and choose the packages or furniture they want. They can either take our curated packages or can choose their own set of furniture. We deliver it to them in 72 hours. Contractually, there is an obligation for 3 months but customers tend to stay for at least two years.

Where do you acquire your furniture from?

Every piece of furniture is designed in-house. In fact, many of them have also won multiple design awards. But we don’t have one particular vendor and we manufacture across India. We have 40-50 vendors who are contract-manufacturing it for us. Some of it is leased back and some of it is owned as well.

Since most of it is owned, how do you manage your costs? Buying furniture, keeping it, maintaining it and then transportation seems expensive. Isn’t a brick-and-mortar shop a better idea?

Brick-and-mortar shop is more of an outlet and that is not how we sell. We sell online. Brick-and-mortar actually makes it more expensive. For any furniture player to deliver in the brick-and-mortar series, they have to have warehouses So we also have the same thing. We currently operate in total of eight cities and have warehouses in all these.

Why did you think of Furlenco? What mindset or demographic does it cater to? Would you have been equally successful, say, 10 years ago?

So when I was returning from the US, I had to literally sell all my furniture for peanuts. Then I came to India and bought all the furniture again. But most of it was not in good shape and most of it broke in 2-3 years. We actually kept moving around, so I had to pay the relocation cost also. So that’s when I thought why such a thing is not there in India. But general perception around that time was that Indians wouldn’t rent. They would only buy. But that’s not true at all and that’s what we found. It’s just that this option didn’t exist. The moment we gave that option, people started renting. If you are renting your house, you are renting your vehicle, why not rent your furniture and appliances also? And that’s exactly how it has worked out also. People have no issues in renting. Renting furniture is now a default option for many people. But yes, it is true that 3-4 years back that was not the case. But now when someone is renting a house, they naturally think of renting the furniture as well.

Can you describe what an average Furlenco customer looks like?

An average customer will be around 20 to 30 years old, have a household income of ₹ 10-12 lakh, would be from a tier 1 city; person can be married or unmarried (it’s 50-50). In India, while the purchases are made by males, that doesn’t necessarily mean the usage is by males only. It’s a blended proportion.

In terms of numbers, how is renting better than buying?

I wouldn’t argue on the numbers perspective mainly because it’s a different business altogether. We never say that renting is cheaper than buying. We believe in giving you an option, which is a hassle-free experience where you pay ₹ 2,500-3,000 a month and your entire home decor is taken care of for as long as you want. You can buy all the furniture you need, but your life is not constant. One year you are in one house, next you are in another, you keep changing jobs, so your lifestyle and life circumstances keep changing over a period of time. Change is the only constant now. Furniture that you need today is not what you need tomorrow. You are forced to carry a bed along with you because you think there is no other option. When you are provided with an option, you take whatever furniture you need, pay a monthly sum, and then you can upgrade. We give free relocation, free swap, wherever you go in India. So wherever you go, you can just land up with your suitcase, and the furniture will be in the house in the next 72 hours.

Is this is a lifestyle choice for many or is it about millennials who are always on the move—constantly changing jobs or cities—and prefer everything on rent?

That’s not entirely true. 40% of our customers are 30-plus. 40% of them are married as well. Yes, a majority of them still might be millennials. I would agree with that but it’s more of a mindset. Subscription of furniture is only appealing to millennials is not true either. So it’s for anybody who thinks this is a lifestyle choice, and that I don’t want to get committed to these products at this age. More importantly, in Furlenco’s case, we define our own furniture. These are award-winning furniture. For example, one of our products, called POD—which is a bed-cum-TV-cum entertainment system-cum-bluetooth connectivity and charger—is an all-in-one product. Such a product doesn’t exist in the market. So there is no rent versus buy question at all. We are trying to make furniture a little more exciting for people. You pay for as long as you use and then give it back and take something else or move on. Till now you were forced to buy furniture, there was no option of renting. (If you couldn’t buy) you were living in empty houses with roll-away beds. With this option, you have a great house and you don’t have to pay the full amount for it either.

How did you appeal to the Indian mindset of owning all physical assets, especially household items?

We positioned our brand as a want-based brand. You can do this business in two ways. One is that you provide people the cheapest furniture possible on rent, then make those financial arguments—why do you want to pay lakhs, just pay ₹ 500 and keep renting. But we chose not to do that. We chose to say that look we will give you an awesome lifestyle. And it will be at a price point which you would anyway pay by going to a local pub, having a drink. People usually go to a pub and spend ₹ 2,000-3,000. So instead of going to that pub, you can get one month of good high quality, award-winning furniture at home. So why not is the question? It was not an overnight journey. It took us three years. A lot of it was how we positioned ourselves in various mediums. So we built a brand which was fresh and tried to bring about a change in the way people think about furniture. And we created products which were interesting for people to try out. All that put together, slowly but surely people started converting. Now we do around 5,000 houses per month.

Do you see any scope in tier 2 and tier 3 cities?

For now the plan is to stick to tier 1 and tier 2 cities. We won’t be looking at tier 3 cities in the immediate future. We would rather go international if required. In the next 5 years, we will at least be in top 15 cities of India; that is for sure.