urban ladder
TRANSCRIPT
PRESENTED BY: GROUP 5 SAIRAM CHEKKILLA (PGP01017)HIMANI HOODA (PGP01021)
IIM AMRITSAR
ONLINE FURNISHING MARKET OVERVIEW• India’s home décor and furniture market is
worth $20 billion (about Rs. 120,000 crore), with less than 10% of it being organised play
• Furniture makes up 2/3rd of the market, with the largest offline player’s revenue pegged at less than $100 million
• The organised residential furniture market is expected to triple in size to become $1.3 billion in the next 5 years, growing at a CAGR of 27%; this would be around ~9% of $15 billion ( expected) residential furniture market by 2020
Furnishing & Home Décor Company
Founded In: July 2012
Founded By: Rajiv Srivatsa and Ashish Goel
Headquarters: Bengaluru
Private Label Brand
Reach: 19 cities (including Tier II and Tier III)
Revenue: GMV of $250 Million By June 2017 (expected)
ABOUTTHE
COMPANY
CORE VALUES• Customer obsession:
We will consistently strive to ensure that our customers are delighted at the end of every little interaction with us. We are all ears to any feedback that can help improve every interaction.
• Honesty and transparency:What we know and what we do is out there. We place a premium on sharing information honestly with all stakeholders.
• Excellence in every small thing we do:We indulge in attention to detail at every step of our journey. Hundreds of such small steps ensure that every customer gets great furniture and great service.
• Fun as a way of Life• Stepping up to create a magic
PRODUCTS OFFERED
• Sofas • Beds • Dining • TV Units • Mattresses• Seating• Interiors
• Coffee Tables• Study
• Wardrobes• Bookshelves
• Kitchens• Shoe Racks
• Storage• Decor
BUSINESS MODEL
CustomerSegment• Focused on the
customers who are looking at functionality and product quality and are willing to pay a premium for the same
ValueProposition• Products focused on
furniture and related décor products, with limited range of brands
• Simplified furniture selection by providing detailed pictures and measurement of each product
• ‘A look by space’ services
Channels• Primary: Website &
Social Media• User stories posted on
the website• Videos on Youtube
showing product usage and functionality
CustomerRelations• Focus on developing
long-term relationship with a focus on sharing user stories and simplified it for a customer to make choice
Revenue Stream• Product Sale
Key Resources• Furniture & Packing
Design Team• Logistics & Setup
Team• Back Office Team• Customer Stores &
Layout Ideas
Key Activities• Product designs• Enhancing
customer experience
Key Partners• Product suppliers
(brands & other manufacturers)
• Logistics Offered• Customer stories
(experiences & feedbacks)
Cost Structure• General resources• Partner cost• Product• Customer services• Product design
BUSINESS MODEL Contd.
SEGMENTATION
TARGET CUSTOMERS’ PROFILE• Anyone buying a home in Rs. 40-50 lakh range, will go for furniture in
Rs. 4-5 lakh range, including kitchenware. That’s our target customer• Anyone in the renovation cycle, who bought a house several years ago,
might want to re-do a room or several rooms because they are bored of it. That is a big second audience.
• And a big third audience is anyone moving cities among the top 30 cities, who’s probably married but have still not bought a home where they are looking to do-up some part of their house.
• All these three are the audience that span across the board
• Demographic: They are well-read, educated, earning well, between ages of 23-45, who will buy online, and are used to shopping online
• Psychographic: They are design conscious, socially aware and active, digitally buy stuff, including lifestyle purchases from the likes of Myntra or Jabong
• Behavioural: They are willing to buy big ticket items at a single click and are finding it far more convenient to shop online, as it ensures them to check out how the furniture would look in their home settings
• During the festive and wedding season, there is an impressive surge in the number of buyers as this is the time when people like to renovate their homes and buy new furniture
TARGET CUSTOMERS’ PROFILE
TARGETING
SEGMENT SIZE AND GROWTH• Furniture and Furnishings market in India has been growing at a
compounded annual rate of 6-8%.• 90% of this market is unorganized, with a large number of unbranded
players and local carpenters. The branded organized retail segment account for 15% of the market and 0.5% of the market is captured by online retailers, so there is significant headroom for Urban Ladder to grow.
• India’s furniture market is estimated at $15-20 billion (Rs.93,000-1,24,000 Cr.) in India alone.
• The furniture category is big and offers a great opportunity as there isn’t a single player who is valued for more than $100 million.
TARGETING DIGITALLY SAVVY, URBAN AUDIENCE THROUGH TECHNOLOGY
• Urban Ladder launched three apps – Urban Storage, Living Spaces and Core Catalogue app, through which it provides home trials, consultation and augmented reality of 5,000+ furniture.
• Furniture is a complicated product to buy. It’s a high touch and feel product, and is non-standard. It’s also a higher ticket purchase than most other purchases. The front-end experience of the website and mobile apps help the consumers easily discover, navigate and browse the selection of products.
• It also helps consumers get true and rich information around each product, and make them get a sense of both how the product looks and fits in their house. Last but not the least it gives them a sense of trust.
• High investment on mobile technologies to provide a great experience on areas like visualisation, personalisation and app development to target it’s chosen segments.
POSITIONING
POSITIONING• Ashish Goyal, Founder wants “Urban Ladder to be the reason
why homes across India look beautiful.”• They intend to be a complete home solutions provider in the coming
days. They want to strengthen their décor portfolio to graduate from an online furniture store to a one-stop home furnishings provider.
• To position themselves, Urban Ladder had only recently jumped into TV, but its initial efforts were focused on broad-reaching demography.
• Founders believe organic growth coupled with social media marketing and positive word-of-mouth are sufficient for them.
LEVEL OF COMPETITION
• Horizontal Players:Flipkart, Snapdeal, Myntra, Amazon (These players have 50 times their traffic)
• Vertical Players:Pepperfry (January 2012), Fabfurnish (March 2012), HouseFull (August 2006) and Zansaar.com
• Offline Players:Home Town, Lifestyle Home Centre, Godrej Interio, Fab India, Style Spa, DLF Pure, Evok (Hindware)
• The company is gearing up to face Ikea, the Swedish furniture and home décor giant’s expected entry into Indian market
VENTURE CAPITALISTS
VC FUNDING
• $3 Million Debt Financing received on August 23, 2016
• $77 Million in 4 rounds from 7 investors till date
• Helion Venture Partners• Sequoia Capital• Nexus Venture Partners• IDG Ventures• Vantureast Fund Advisors
India Limited
SUGGESTED VENTURE CAPITALISTSTO PITCH FOR
VALUE PROPOSITION FOR VCS• Growing market
(as discussed in market analysis)• Promising business plan• Rapid firm growth
• Company valued at $250-300 Million (approx.)• Gross merchandise value is Rs. 300 crore (approx.)
• Business expansion plans in future• In response to customer requests on launching allied
categories such as bathroom accessories, wall art etc.
EXIT STRATEGY: MERGER AND ACQUISITION
• Going into a similar company or allow the business to be bought by a larger company that can benefit from the merger and acquisition
• When company has reached a desired valuation ($5 Billion i.e 32000 Crores)
• Merge with IKEA for global reach and business
• Both companies can win, combine resources and grow into something more that can change the direction of the market
THANK YOU!!!