'We are adding 10 lakh new customers every year': Ankit Rungta, Founder, Story@Home
After electronics and fashion, home furnishing is fast becoming a hot-selling category on popular ecommerce platforms such as Amazon, Flipkart and Snapdeal. This rise in online shopping could undermine the effectiveness of physical stores for many businesses. Story@Home is one such company, which switched from physical retail stores when it realised the potential of online retail.
Founded by Ankit Rungta in 2012 in Vadodara, Gujarat, Story@Home was self-funded and was incorporated as a family-owned business. With the ecommerce boom, the business grew, and 34-year-old Rungta brought in his father Sohan Rungta to grow different verticals. At present, both father and son are actively involved in the business at different levels. Sixty-one-year old Sohan has over 40 years of experience in various businesses and helps his son with different challenges based on his experiences and insights.
“We launched with the goal to make high-quality home furnishing reach across India. During the initial stages, we had physical stores and we operated with different retail partners to sell our goods. Like all businesses, we had various challenges related to inventory and supply chain efficiency, which we were trying to solve effectively,” says Rungta.
“Then came the ecommerce boom and we were among the first few brands that partnered with Flipkart, Amazon, SnapDeal and many more. We upgraded and switched from physical stores to online channels for sales.”
In a conversation with SMBStory, Ankit Rungta recalls his journey in the home furnishing sector. Excerpts from the interview:
SMBStory: When you launched in 2012, what gap did you want to fill in the home decor market?
Ankit Rungta: For our family, the textile business has been a core field for nearly four generations. However, after working with Infosys for a year, I shifted back to Vadodara and joined my family business that was involved in the metals industry. In 2011, the business wasn’t doing so well, and so I looked elsewhere that had a potential for high returns.
Subsequently, when I studied the home furnishing market, I found a big gap in quality products at reasonable prices, and a lack of proper supply chain management across India. This inspired me to get into entrepreneurship and start a venture in the home furnishing segment by forming a supply chain and marketing team across twelve states in India. I also saw that offline markets were growing well, but payments and returns were a common issue across these channels.
SMBS: The company has around ten lakh customers at the moment. What is your current turnover?
AR: Right now, we are growing our numbers. With over 10 lakh new customers added every year, we had a turnover of close to Rs 65 crore last year. This year, we are targeting revenues of Rs 100 crore.
SMBS: What are some of your unique markets?
AR: We always see a big demand and supply gap of quality home decor items that are reasonably priced. This holds good not only for large cities but also for remote areas in India. Story@Home aims to reach places such as Leh, Kashmir, Sikkim, West Bengal, etc.
These places have a large target market and the people have the same willingness to beautify their homes. Over the past few years, we have been able to supply to these markets with the help of online channels. Currently, we serve over 18,000 zipcodes across India.
SMBS: How are you leveraging digital mediums for selling and marketing in your business journey?
AR: Digital medium is a big part of our day-to-day life - from product research and manufacturing to the final customer. For us, digital is part of warehouse management, real-time inventory updates, catalogue designing and marketing and dispatching and tracking. We often joke that our brand has digital veins, which keeps pumping.
Of course, there is online selling as well. In early 2013, websites such as Myntra, Tradus, Jabong, Snapdeal and Flipkart were active in the home furnishing category. To explore multiple avenues, we started registering on these websites and started receiving good numbers. Then came a turning point in the industry. In October 2013, we had enough stock for the next five or six months, based on average monthly sales.
However, because of the Big Billion Day sale on Flipkart, we sold so quickly that we were left with almost zero stock. This was 30 times the usual weekly sales, and it all happened in a few days. We noticed that around 65 percent of sales came from Tier II and Tier III cities. Post this, we realised the true potential of this segment and started exploring and focusing solely on ecommerce and started to downsize our offline market. Now, we are able to grow at three times the speed, year-on-year.
SMBS: Apart from the Flipkart sale, what are some of the key milestones in your journey?
AR: After we launched, we were still selling in physical stores. But in 2013, our true growth story began when we set up a new office, primarily focused on online sales. After this, we shifted to a larger office in 2015 in order to make full use of our team who had ecommerce expertise. In 2016, we became one of the top-selling home furnishing brand in terms of online sales.
In 2017, we moved to a multi-storied corporate office with a 40,000 square foot warehouse. We have also identified a Rs 20,000 crore market between organised and unorganised players in India. Our strength is that we are an online-only brand and we don’t sell physically in retail stores anymore. This gives us the advantage of cutting middlemen costs and offering really competitive rates in the market.
SMBS: What are the key challenges you faced while sustaining and growing the business?
AR: With any business, there are multiple challenges. Following the ecommerce route, we had our own type of learning curve and challenges. We saw that ecommerce logistics were the opposite of a traditional business. The compliance of the government, along with strict operating procedures of ecommerce marketplaces were very difficult to implement over a period of time. We faced several rejections and cancellations, but we learned from them and grew into the art of ecommerce logistics.
When it came to manpower management, we employed semi-skilled labours in manufacturing facilities and we are still learning to manage them. Quality management was another challenge. As ensuring good quality is a core focus area, we faced challenges in managing the quality of raw material from vendors to the final product packaging, cataloging and dispatching to the customer.
At different stages, we implemented special technologies to help us limit quality issues. Currently, we see 1.01 percent defects, and we aim to bring it to less than 0.5 percent. We are confident we will reach this even as we grow in terms of volume. We also want to get into more product categories where we see the same gap between supply and demand, especially in decor and furniture items.