Furniture Ecommerce Bounces Back With Work-From-Home Surge

As the government slowly opens up the economy, all “non-essential” businesses are also beginning to come back on track. The furniture ecommerce industry, which was shelved as it didn’t fit into the essential category is making the best of the prevailing circumstances.

The work-from-home norm seems to have spurred the segment. So much so that the impact of the lockdown is limited compared to the other ecommerce ventures like apparel and clothing. Pepperfry cofounder and COO Ashish Shah told Inc42 that the company has managed to recover 60-65% of the sale volume it was catering to in March 2020, before the nationwide lockdown was announced. However, the average order value has remained the same.

“In furniture, we have INR 18K ticket size and that has kind of held because it completely depends on the kind of assortment that you offer to your customer. As long as the online catalogue remains the same, order values would not get impacted,” Shah added.

He also noted that this recovery of sales has been solely through their website. The company has over 60 studios, which make up for 38% of the total sales for Pepperfry. But the pandemic has raised doubts over footfalls in their retail outlet, forcing them to keep them on hold till mid-June. “We are quite optimistic about how online will pan out,” he said.

Online Furniture Rental Hopeful For The Inflection Point

Meanwhile, furniture rental platforms like Furlenco and RentoMojo are also back in business after a dry spell of two months. The companies are hopeful of hitting the ground running as the government is working to open us the economy.

Furlenco’s Ajith Karimpana said the company expects to recover back to their March’s metrics within 3-4 weeks of the lockdown being lifted completely. Meanwhile, RentoMojo’s CEO and founder Geetansh Bamania were candid that the company did see a dip as people were not sure about when deliveries would be made during the lockdown. However, the volumes have now started ramping up now.

Bamania added “given there is an organic demand for rental as a category as we are coming out of the lockdown, this is an inflection point for the rental industry.”

Both the companies elaborated that there has been an increase in demand for living room products like lounge sofas, chairs and tables as it caters to the increased work-from-home needs. Meanwhile, demand for kitchen appliances like microwave, dishwasher and refrigerators have also surged.

Pain Points For Furniture Ecommerce

Even as several reports highlighted that the Covid-19 hangover may lead to customers preferring to spend only on “essentials” rather than luxury items, Shah said purchases even though discretionary are essential when it comes to home needs. “While home categories are discretionary purchases, there are some very essential items within home as well. If you need a bed, you need a bed. Similarly, study tables, chairs are something people will keep buying. The way I look at it is that the overall demand in the category might go down because it is discretionary in nature. But the online businesses would go up.”

However, according to market research firm Capgemini Research, 50% of customers are expecting a decrease in their furniture spending, whereas around 23% are expecting an increase in such purchases.

While customer sentiment is only one aspect of the business, the disruption in supply and logistics has also been hampering businesses. Both Furlenco and Pepperfry have been impacted by migrants — which constitute most of their workforce — returning home.

“In Karnataka alone, more than 11 lakh workers have registered to leave the state. The number is just as concerning everywhere else. How we solve this across industries will be crucial in the next few months,” Karimpana added.

Meanwhile, Shah added that since they have their own supply chain, it has been easier for them to manage on that part but it is still the most challenging part at the moment. The company has over 350 trucks of their own, however, due to the migration of labour, the company is facing a scarcity of drivers.

Home-Fit Solutions Look To Thrive

Home fit-out solutions provider HomeLane has also bucked the lockdown fallout. Talking to Inc42, cofounder and CEO of HomeLane, Srikanth Iyer, added that the company’s business never went to zero even during lockdown.

The company has different verticals that manufacture, install and sell furniture. Besides, it also has a separate brand called Spacecraft, a cutting-edge virtual 3D design platform, which allows customers and designers to meet leveraging AI/ML and augmented reality. While manufacturing and installation were completely shut during Lockdown 1.0 and 2.0, Spacecraft managed to do 30% of its business, as compared to new orders in March 2020.

HomeLane restarted their manufacturing and installation from March 4 onwards. Now,  the company is expecting to recover 30% to 35% of its business in May. However, Iyer believes that the business will grow 5% to 10% month-on-month (MoM) to reach the pre-Covid numbers.