Walmart-backed Flipkart seeks to double furniture biz annually for next 3-5 years

New Delhi: It may be hard to associate Walmart-backed Flipkart with just furniture sales. However, not only is Flipkart now the largest online retailer of furniture in the country with a little over 40% market share, furniture is also one of its fastest-growing categories.

Flipkart, which entered the category two years back, expects the category to grow 100% year-on-year for the next 3-5 years on the back of the demand it is witnessing particularly in the tier II, III and IV cities.

“Furniture is a $17 billion industry, of which the organized market is 15%, and within that online is only 3%. Given the unorganized nature of the furniture industry, our product offerings and quality standards, coupled with the fact that customers from India and Bharat (tier II, III and IV cities) are getting a lot more digitally savvy, what we see is a huge opportunity for Flipkart to organize this market. There is no trusted brand in this space,” said Adarsh Menon, Vice-President, Furniture, Electronics and Private Label at Flipkart. However, he did not share the contribution of the furniture business to the company’s overall revenue.

The Indian furniture market is growing at a compounded annual growth rate (CAGR) of 15-17% with residential comprising $11.1 billion and the large furniture category leading with a 70% share, according to RedSeer Management Consulting--a research and advisory firm focused on the consumer internet market. Besides Flipkart, the other online furniture retailers include Amazon India, and vertical players such as Pepperfry and Urban Ladder. For now, Flipkart’s has captured 41% of the market share, up from 31% share last year, according to the RedSeer report.

Currently, Flipkart offers furniture delivery across 16,000 pincodes in the country and has created a separate supply chain for these products. This assumes significance as furniture items are bulky and of varied shapes and sizes, which require a different warehouse or fulfillment centre where the products gets packed and shipped to the distribution hubs.

Flipkart has also introduced affordable payment solutions such as 'No Cost EMI' and 'Debit Card EMI' for the online furniture business, which are also helping in increasing the sales in this category.

“In furniture, we have identified five pain points that we are trying to solve. First, customers genuinely do not have access to selection. The second is affordability. Furniture in India is often overpriced, because there's no real benchmark. The third pain point is that customers are unsure about quality and there is a lack of easy delivery and lack of easy installation. And we believe we were able to solve all these pain points through a larger selection, appropriate pricing, high quality, affordability, and fast delivery and fast installation,” said Menon.

Flipkart’s increasing furniture business comes at a time when Swedish furniture retailer Ikea is looking to expand its presence in India. Besides opening its first store in Hyderabad last year, the furniture retailer recently launched its online shopping services in Mumbai. Ikea aims to reach 200 million customers by 2021 with a market share of 20% in organized furniture market.

Two months back, Flipkart too launched a furniture experience centre, thus marking the firm’s first foray into the offline world, underscoring the importance of having an offline presence for categories such as furniture, which still requires a touch-and-feel format for customers. Flipkart Furniture plans to introduce two more experience centres in Bengaluru, while also looking to expand to other metros.