Testing waters in rental furniture market
India is one of the major markets for organized furniture industry, ranking at 8th globally. But interestingly there’s a new trend of renting the furniture which is slowly emerging in Indian market. This market is very disorganized as the concept is very new in our country, but it’s a very proven concept in the west with a decent market share in furniture industry. It essentially rents or leases household furniture home owners or leassees. One such startup who’s taking a leap into furniture rental industry is Furlenco, based out of Bangalore. Furlenco was started with a different name ‘RentUrDuniya’ was founded by Ajith Karimpana, Ex-Goldman Sachs Vice President in Oct 2011.
Ajith shares his story of how he took a leap of faith to explore these untested waters in Indian market.
So how does Furlenco work?
Furlenco offers a range of furniture for rentals to help individuals set up home in tune with their aspirations and requirements. Individuals can expect to get a well-crafted home to suit ones changing lifestyle or habitats, without burning deep holes in one's pockets. Relocation along with shifting homes can be a very unsettling process and tends to create a lot of frustration and anxiety in some people. Looking out for a new piece of furniture and disposing of the old stuff can be a tricky one, especially when the ‘right value’ is not monetized for the same. Renting furniture could turn the entire process from being painful to pleasurable.
What was your pain point and how did you conceive this opportunity?
My wife, Aparjita and I spent close to 9 years in the US. Life was great there. It was Jan 2010; we were into our third month of return to India. I thought I knew Bangalore – after all I spent a good part of my student life here. We made a mistake. We had some great furniture back in the US. After doing some major calculation, we figured that shipping is going to be pretty expensive. With that money, we might as buy new stuff back in India. While the calculations were right, my understanding of India was completely wrong. We went around to all the wrong shops in Bangalore. Little did we know that we were being conned big time and of course it was a painful and disappointing experience.
Something struck us and I asked why there is no rental furniture here. Here we were the perfect candidate for rental furniture. We were not 100% sure whether we were going to stay back for good in India or would we go back to the US. So rental furniture would have worked for us perfectly. So after spending some time in research on the rental furniture, we were unable to find the rental furniture and clearly we saw a big opportunity. Rent Ur Duniya was born within a week of this visit. Here we were two people who came from Investment Banking technology field, looking at a starting up in a field which we had no clue about – neither furniture nor rentals ! But as they say, when the bug bites, you just do it. And we just did that.
What is your revenue model?
It is simple. Furlenco earns its revenue by renting out furniture items. We own and hold the inventory. Customers typically pay just about 3-4% of the retail price of furniture item per month. We invest only in solid wood furniture and the life of a seasoned well-designed solid wood item is anywhere between 15 to 50 years. This kind of model is completely and radically different from any ecommerce or normal retail models that India is familiar with.
Who are your competitors in this space? And what’s your USP?
Mom and pop stores have been around for aged but we’re the first organized player in India to do this.
We have created an extremely smooth and seamless system that ensures the entire furniture rental experience, from identifying the furniture to setting up the home, to be hassle-free, while all along fulfilling the customers’ aspirations and bringing them happiness.
What challenges did you face and how did you overcome them?
Furniture rental is being introduced first time to India in an organized way. The challenges are many – the biggest among them is reverse logistics. Unlike a normal retail delivery model, we have 100% of our items returned back to us at some point of time. This basically means that our logistics challenges doubles.
Indian laws are not exactly clear about furniture rentals (again this being the first time). We could be the benchmark for many of the changes that could happen. Running operations on measly 3-4% revenue (compared to a furniture retailer) is one of the biggest challenges. We are proud to say that we not only have cracked it but also doing it profitably.
You can reach out to Ajith Karimpana or find more details about Furlenco here.