From home appliances and accessories to roofing, Homlot provides everything that is needed to improve a home.
At a Glance
Founders: Prasad Bollineni and Vineet V
Year it was founded: 2016
Where is it based: Bengaluru
Sector: Online wholesale
The problem it solves: Single platform for home improvement product purchases.
Funding raised: Bootstrapped
Their love for the retail and home furnishing supply industry made Prasad Bollineni and Vineet V start Homlot, an omnichannel wholesale supplier for all categories of home improvement products.
Travelling to various countries made them realise that the Indian home improvement supply chain industry is highly unorganised. They built Homlot as a one-stop shop for wholesale furnishing products like hardware, laminations, appliances, accessories among others, with a solid and efficient supply chain and volume discounts.
Being MBA graduates and having previously worked in technology, logistics and supply chain sectors, Prasad and Vineet are working towards changing the unorganised retail sales in Indian home improvement segment.
Homlot, which is the trade name of Seedolabs Pvt Ltd, was started in 2016 under the Nasscom 10K startups programme. It helps interior designers, modular manufacturers and carpenters procure the materials they require for their projects from a single supplier at discounted prices based on their purchase potential.
Small and medium business owners often find it hard to avail services like material estimation, cutlist optimisation, insurance, and credit, which are usually available for major players. Homlot provides these services to them and intends to expand on its offerings in the future.
The company currently operates through one warehouse or dark store. It is planning for another one in Bengaluru next year, which is touted to be a an experiential warehouse facility, where customers can walk in, touch and feel the product and avail the comfort of click and pick. They can take it home with them or get it delivered to their site location.
On the supply side, Homlot has established a direct relationship with a majority of the manufacturers and has over 225 suppliers through whom it acquires the products.
Its initial challenge was to convert its business users for repetitive purchases from the Homlot platform. Homlot has 50 people in the team currently. The customer base of Homlot includes architects, contractors and retailers also.
AI for improved outcomes
Homlot uses cognitive artificial intelligence (AI) with which it understands and differentiates one use from another. Prasad says that at Homlot, no two members will get the same pricing. The technology helps in addressing the problems of bulk buying among others.
The intelligence is built not only through the entire platform, but also to the shopping cart. Once a user logins, and as they add the items, their savings will change.
“We have spent the major portion of our first year in developing cognitive AI along with e-commerce,” explains Prasad.
Overcoming productivity losses
The bootstrapped startup generates revenue through sales of products and services either as a commission on GMV or as a percentage margin.
Homlot remains self-funded and has plans for extensive expansion, for which it is planning to raise investments through VC funding.
Homlot had a turnover of Rs 1.5 crore in the last two quarters since its operations began in 2017. It has 80 percent active users with repeat purchases. It intends to use a technology-driven customer acquisition strategy to get over 2,000 users by the end of 2018.
As per Homlot’s data, service providers usually take three days and 10 store visits to procure materials for a two BHK home project. This leads to 30 percent productivity loss . This is compounded by the inadequate availability of genuine and quality products. Due to the lack of proper planning and technology, there is 35 percent material wastage during the procurement process, causing 10-percent surge in material price due to inefficient supply chain.
Home improvement sector begs for further improvement
Homlot says that, currently, Bengaluru’s home improvement market share is dominated by distributors, dealers, retailers and importers in an unorganised, traditional procure-and-sell model.
Hardly one percent of this entire market share is taken by online marketplace sellers for retail purchase with a stagnant growth rate. Less than a one percent market share is slowly taken by online network aggregators for bulk business purchases with some growth potential.
“Currently the cumulative aggregate growth rate is 23 percent for the home improvement segment. India’s organized furniture industry is expected to grow at 20 percent per annum over the next few years and is projected to cross US$ 32 billion by 2019. These consumer durables which Homlot deals with are less of an impulse purchase and more of a life time investment for the user or end customer,” adds Prasad.
The demonetisation had a huge impact on the growth prospects of Homlot after its establishment. GST immediately followed .While Homlot believes that GST will positively impact large organised players, it had delayed the launch of its platform due to multiple tax slabs and supplier price changes.
With the next round of VC funding, Homlot plans to expand to other metro cities like Hyderabad, Chennai and Pune.
It’s long-term plan is to expand to over 110 experience warehouses pan India.
Homlot is also planning to expand its catalogue and the number of suppliers with the next investment.