Online Retail Sector

Company B

Business Model

Key Activities

• Order Processing• Inventory Management

Customer segment

• Home Decor

Value Propositio

n

• Make to order with customization• Low cost strategy: Use of recycled

wood

Furniture Market Overview in India

• Furniture market in India is highly unorganized with organized sector having 15% market share.

• Branded Furniture market in India is mainly concentrated into 1 or 2 tier cities.

• Market is driven by increasing income levels and increased consumption of lifestyle products.

2008 2010 2012 20140

50100150200250

Market Size and Growth

Market Size and Growth

INR Bn

30 %

Market

Issues

Market segment has low

absorption to

innovation and

change.Lack of Quality

awareness.

Large fluctuation in demand leading to

stock uncertainti

es.Corruption in India

Market is

Restricted to

top tier cities only.

Indian consumers still want to refrain from

buying online as they want

to have a touch and feel factor involved.

Market Segment

65%

35%

Key Consumer segment

Domestic MarketCommercial Market

Need & Demands• Availability of wide range of products at a single platform with an option of customization.•With the growing urbanization, needs of luxurious furniture is still unfulfilled.•The demand is exponential in metropolitan as well as tier 2 cities.•Rural areas as well as 3 tier cities has the potential but the market penetration is difficult.

Switching CostsThe on-time delivery with an option of

customization is an invaluable feature for the customers.

Availability of such wide range of products at a single platform is a huge time saviour.

Providing quality products made up of best raw materials available.

Easy replacement scheme is another unmatchable quality.

Revenue Attractiveness•Customers are always willing to pay for products with:

• Quality finishing•On-time delivery•Option of customization•Replacement scheme

•Biggest margin is achieved due to product’s volume and removal of physical distribution centers.• Only thing which is more cheaper and easily available is local handloom shops but they are losing the edge because of their lack in modern trends.

Competition Overview Furniture market is dominated by unorganized

sector (85%) and remaining 15% comprises of large manufacturers.

Industry scenario

The competitors

Retailers

Godrej InterioStylespaDurian

NilkamalMillennium

Lifestyle

Online market

Ikea

Fabfurnish

Pepperfry

Urban Ladder

RetailersCompetitor Customer Segment Competitive Advantage

Godrej Interio

Home, Office and lab products

Quality, Brand name

Stylespa Home and office ISO certified state-of-the-art plant which produces 0.2 million

Durian Imported furniture Plywood manufacturingInterior design consultancy

Nilkamal Lifestyle furniture: Complete home solution store

350-member wide direct sales network, and a 350-plus strong dealer network

MillenniumLifestyle

One stop solution from the best brands in Europe and Far east

Online interactive room designer

Online MarketCompetitor Customer Segment Competitive Advantage

Ikea Home decor and low income individuals

Low cost structure, International brand image

Fabfurnish Home and kitchen designs

Hybrid marketplace model, with both online and offline stores.Part-Payment method

Pepperfry Urban middle class who are setting up homes

Make-to-order, Hub and spoke distribution model

Urban Ladder

Home solutions In-house team of experienced designers, Zero friction delivery

New EntrantsThe capital requirements for creating a

website are relatively lowThe distribution channel is not proprietary

to the existing playersLow cost of switchingCustomers do not have much brand

loyalty in the online furniture sectorThe new entrant can start on a small scale

and then easily increase to a large scale operation

New Entrants: Pepperfry and Fabfurnish

Substitute ChannelsOrganised

Retail Furniture

Stores

Unorganised Local Furniture Vendors and Carpenters

Teleshopping

Substitute Products

Inflatable Furniture

Local Handicrafts Manufactur

ers

Metallic Furniture

Plastic Furniture

Supply Chain Management

ORDER

WAREHOUSE

MANUFACTURER

CUSTOMER

If Standard item

If customized Item

Supply Chain Management

The key players in our value chain are the manufacturers, warehouse managers and Customers.

The business model is totally dependent on the above three Value chain players.

As we are not producing nor assembling the product we are not concerned with raw materials supplier but it would be affecting us indirectly as per the trends a lot of these wood types have to imported.

This industry is new and customization is a difficult process a lot of players have not emerged till now.

StakeholdersGovernment, Customers and Manufacturers

are the stakeholders.Government through a lot of regulations has

a direct effect. For e.g. Competition lawCustomers and manufacturers have a great

influence on the business model.Workers indirectly also have a big impact as

they can affect the cost of the Furniture as well as Labour laws, Factory Act etc.

Technology TrendsUse of Mobile phone technology

◦ Use of smart phones applications for online shopping is making it easy and quick for the customers.

◦ Retailers are leveraging consumer adoption of mobile channels with mobile offers using big data and technology to get more personal and relevant with consumers

Use of interactive tools on online sites◦ Example : Change of colour of furniture, building

modular furniture, designing of spaces online

Ease of Online payments◦ Transactions and payments are a lot easier now with the

use of online transactions like paypals, google check etc.

Ease of Customer relationship management ◦ Use of customer information to personalize the online

shopping experience through personalized reccommendations.

Use of Video marketing and social media◦ Video marketing is becoming more cost effective with

accessible new technology. Video is becoming a perfect medium for customer testimonials and product overviews

◦ Use of social media to enhance brand awareness among the customers and listen to customers.

Societal and Cultural Trends

Decorating a new house

Renovating a house

Furnishing a commercial complex

Socio-economic TrendsChanging consumer

demographics

Real estate/housing boom

Tourism and hospitality industry growth

Consumer Demographics

Real Estate/housing boom

Tourism Industry

THANK YOUBy:

RAJ SWAPNIL SURENDRA (177)ANIRUDDH CHAKRAVORTY (307)

AAKASH CHHARIA (309)TOSIN GANDHI (311)

SANCHIT GUPTA (312)SHIVAM GUPTA (313)SUMIT HANDA (314)

SHUBHANG JHAWAR (317)