It is curtains up for online home furnishing market – now online fashion mall Fashionara forays into $20 B worth market
Home-furnishing has become a category which has not only attracted interest of niche players, but even horizontal e-commerce players like Flipkart and Snapdeal are betting big on it. Flipkart entered the category in March this year, and has been promoting home-furnishing with TV ads.
Softbank backed Snapdeal plans to reach close to $2 billion in gross merchandise value (GMV) by March 2017 via home-furnishing.
The latest entrant in home-furnishing market is online fashion mall Fashionara.
With the launch of 36 brands across seven new categories, the company has added close to 7500 new products across brands Mesleep, Swayam, Portico New York, Bombay Dyeing, and Tangerine among others to its home fashion catalogue. Fashionara plans to increase this number to 20,000 in the next four months.
According to Arun Sirdeshmukh, Co-founder and CEO, Fashionara, “Home fashion is a segment that is growing extremely fast. It is a perfect fit for us as most of our customers are between 25 and 35 years of age, with many in the process of setting up their first independent homes. We expect to continue to double our business every second quarter on the back of this new category.”
The brainchild of former CEO of Reliance Trends, Arun and, e-commerce evangelist Darpan Munjal, the e-fashion mall offers premium merchandise in the space of fashion, lifestyle and home furnishing.
Last year, Fashionara had introduced F.Lea Bazaar, where it enabled selected sellers from the flea markets across the country to retail their products on its portal. The company also offers detailed lookbooks and services like on-demand style advisor for achieving a perfect look.
With over 90% of this market still being unorganized, there is a huge opportunity for e-commerce companies to own a large market share in this space.
Some of the most searched products in this category on Google are bed linen, kitchenware, clocks and home decorative. Pegged at $20 billion, the home-furnishing market is growing at the rate of around 15% on a yearly basis with online players in this space growing by three to five times every calendar year.
To get closer towards positive unit economics and achieve profitability, e-commerce players are trying to push sales of home-furnishing products given the category offers healthy margins as compared to electronics and other categories. On an average, home-furnishing witnesses gross margins as high as 40-60%, while electronics (computer+mobile) and home appliances give very thin margin (in single digits).
Fashion (apparel +accessories etc.) and home-furnishing verticals will have major contribution in steering profitability for e-commerce majors while a few niche players will also get a market share as more than 90% of home-furnishing market is organized.
Going forward, we also may see some consolidation in the space. In November last year, Urbanladder acqui-hired Delhi-based BuynBrag for expanding the former’s home decor range.