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Online Retail Sector
Company B
Business Model
Key Activities
• Order Processing• Inventory Management
Customer segment
• Home Decor
Value Propositio
n
• Make to order with customization• Low cost strategy: Use of recycled
wood
Furniture Market Overview in India
• Furniture market in India is highly unorganized with organized sector having 15% market share.
• Branded Furniture market in India is mainly concentrated into 1 or 2 tier cities.
• Market is driven by increasing income levels and increased consumption of lifestyle products.
2008 2010 2012 20140
50100150200250
Market Size and Growth
Market Size and Growth
INR Bn
30 %
Market
Issues
Market segment has low
absorption to
innovation and
change.Lack of Quality
awareness.
Large fluctuation in demand leading to
stock uncertainti
es.Corruption in India
Market is
Restricted to
top tier cities only.
Indian consumers still want to refrain from
buying online as they want
to have a touch and feel factor involved.
Market Segment
65%
35%
Key Consumer segment
Domestic MarketCommercial Market
Need & Demands• Availability of wide range of products at a single platform with an option of customization.•With the growing urbanization, needs of luxurious furniture is still unfulfilled.•The demand is exponential in metropolitan as well as tier 2 cities.•Rural areas as well as 3 tier cities has the potential but the market penetration is difficult.
Switching CostsThe on-time delivery with an option of
customization is an invaluable feature for the customers.
Availability of such wide range of products at a single platform is a huge time saviour.
Providing quality products made up of best raw materials available.
Easy replacement scheme is another unmatchable quality.
Revenue Attractiveness•Customers are always willing to pay for products with:
• Quality finishing•On-time delivery•Option of customization•Replacement scheme
•Biggest margin is achieved due to product’s volume and removal of physical distribution centers.• Only thing which is more cheaper and easily available is local handloom shops but they are losing the edge because of their lack in modern trends.
Competition Overview Furniture market is dominated by unorganized
sector (85%) and remaining 15% comprises of large manufacturers.
Industry scenario
The competitors
Retailers
Godrej InterioStylespaDurian
NilkamalMillennium
Lifestyle
Online market
Ikea
Fabfurnish
Pepperfry
Urban Ladder
RetailersCompetitor Customer Segment Competitive Advantage
Godrej Interio
Home, Office and lab products
Quality, Brand name
Stylespa Home and office ISO certified state-of-the-art plant which produces 0.2 million
Durian Imported furniture Plywood manufacturingInterior design consultancy
Nilkamal Lifestyle furniture: Complete home solution store
350-member wide direct sales network, and a 350-plus strong dealer network
MillenniumLifestyle
One stop solution from the best brands in Europe and Far east
Online interactive room designer
Online MarketCompetitor Customer Segment Competitive Advantage
Ikea Home decor and low income individuals
Low cost structure, International brand image
Fabfurnish Home and kitchen designs
Hybrid marketplace model, with both online and offline stores.Part-Payment method
Pepperfry Urban middle class who are setting up homes
Make-to-order, Hub and spoke distribution model
Urban Ladder
Home solutions In-house team of experienced designers, Zero friction delivery
New EntrantsThe capital requirements for creating a
website are relatively lowThe distribution channel is not proprietary
to the existing playersLow cost of switchingCustomers do not have much brand
loyalty in the online furniture sectorThe new entrant can start on a small scale
and then easily increase to a large scale operation
New Entrants: Pepperfry and Fabfurnish
Substitute ChannelsOrganised
Retail Furniture
Stores
Unorganised Local Furniture Vendors and Carpenters
Teleshopping
Substitute Products
Inflatable Furniture
Local Handicrafts Manufactur
ers
Metallic Furniture
Plastic Furniture
Supply Chain Management
ORDER
WAREHOUSE
MANUFACTURER
CUSTOMER
If Standard item
If customized Item
Supply Chain Management
The key players in our value chain are the manufacturers, warehouse managers and Customers.
The business model is totally dependent on the above three Value chain players.
As we are not producing nor assembling the product we are not concerned with raw materials supplier but it would be affecting us indirectly as per the trends a lot of these wood types have to imported.
This industry is new and customization is a difficult process a lot of players have not emerged till now.
StakeholdersGovernment, Customers and Manufacturers
are the stakeholders.Government through a lot of regulations has
a direct effect. For e.g. Competition lawCustomers and manufacturers have a great
influence on the business model.Workers indirectly also have a big impact as
they can affect the cost of the Furniture as well as Labour laws, Factory Act etc.
Technology TrendsUse of Mobile phone technology
◦ Use of smart phones applications for online shopping is making it easy and quick for the customers.
◦ Retailers are leveraging consumer adoption of mobile channels with mobile offers using big data and technology to get more personal and relevant with consumers
Use of interactive tools on online sites◦ Example : Change of colour of furniture, building
modular furniture, designing of spaces online
Ease of Online payments◦ Transactions and payments are a lot easier now with the
use of online transactions like paypals, google check etc.
Ease of Customer relationship management ◦ Use of customer information to personalize the online
shopping experience through personalized reccommendations.
Use of Video marketing and social media◦ Video marketing is becoming more cost effective with
accessible new technology. Video is becoming a perfect medium for customer testimonials and product overviews
◦ Use of social media to enhance brand awareness among the customers and listen to customers.
Societal and Cultural Trends
Decorating a new house
Renovating a house
Furnishing a commercial complex
Socio-economic TrendsChanging consumer
demographics
Real estate/housing boom
Tourism and hospitality industry growth
Consumer Demographics
Real Estate/housing boom
Tourism Industry
THANK YOUBy:
RAJ SWAPNIL SURENDRA (177)ANIRUDDH CHAKRAVORTY (307)
AAKASH CHHARIA (309)TOSIN GANDHI (311)
SANCHIT GUPTA (312)SHIVAM GUPTA (313)SUMIT HANDA (314)
SHUBHANG JHAWAR (317)