Urban Ladder Home Decor Solutions Private Ltd-owned online platform for home furnishings, Urban Ladder, announced its financial results for the fiscal year ending March 31, 2018, reporting revenue of $21.68 Mn (INR 151 Cr), a jump of 202% against the last financial year revenue of $7.17 Mn (INR 50 Cr).
According to financials sourced via business intelligence platform Tofler, the company has reported a loss of $17 Mn (INR 118.66 Cr), down 74% against $65.8 Mn (INR 457.9 Cr) in the previous year. The company also controlled its expenses by 54%, reaching $33.39 Mn (INR 232.73 Cr), as against $72.98 Mn (INR 508.58 Cr) in the fiscal year 2017.
The Bengaluru-headquartered company had announced a shift in its business model from online retail to a furniture brand in July 2017. Since then, it claims to have greatly improved its business economics and accelerated its growth.
In a media statement, the company said that its omnichannel strategy has increased the average order value (AOV) by 24% along with lowering its customer acquisition costs (CAC) by 43%. It has also optimised other channels on its path to profitability and omnichannel expansion.
With a major change in its business model in fiscal 2017-18, here are some highlights of its financial performance for the year:
- Out of its $13.86 Mn (INR 96.64 Cr) operational revenue, the sale of products contributed $11.33 Mn (INR 79 Cr), reducing the company’s dependency on the sale of services, reaching $2.51 Mn (INR 17.5 Cr), as against $5.83 Mn (INR 40.67 Cr) in the previous year
- Urban Ladder’s expenses included: Purchases of stock-in-trade for $10.62 Mn (INR 74 Cr) and negative change in inventories of finished goods, work-in-progress and stock-in-trade for $5 Mn (INR 34.92 Cr).
- It spent $7.71 Mn (INR 53.66 Cr) on its employees for the year as against $8.59 Mn (INR 59.8 Cr) in FY17. Also, the company recognised the power of ESOPs and announced ESOP plans for the company’s senior executives
On a consolidated level, the company reported total revenues of $21.92 Mn (INR 152.5 Cr), as against $13.39 Mn (INR 93.17 Cr) in the previous year. For FY18, Urban Ladder’s consolidated expenses were $80.56 Mn (INR 560.99 Cr) while its losses reached $16.73 Mn (INR 116.5 Cr).
The company’s directors emphasised in their statement that “the company is looking to aggressively grow its retail store-front presence by cultivating multiple outlets across 10 major cities of the country to jettison its now core-retail business into a national position of strength with the purpose of acquiring a healthy market share. Whilst in this pursuit the organisation intends to simultaneously strengthen the growth of its online presence through the continuing optimisation of brand equivalence and online marketing strategies. The objective is to parallelly annex a solid positioning in both markets.”
Six-year-old Urban Ladder offers over 3000 products across 35 categories to more than 90 cities in India, with offline stores in Bengaluru and Delhi-NCR. Inc42 Datalabs in its What The Financials analysis of major market players Pepperfry and Urban Ladder noted that Pepperfry has been able to create an omnichannel presence for itself in the furniture market in India and Urban Ladder is following in its footsteps.
Although the comparative analysis also suggests that Pepperfry’s success is chipping away at Urban Ladder’s market capitalisation, in reality, the market is so vastly unorganised that these two players are only catering to 2% of the entire online furniture market.
With the total funding of $106.87 Mn (INR 744.7 Cr), Urban Ladder is picking up its pace so as to challenge global players like IKEA exploring the country as well as increasing number of furniture players in the country including those who offer rentals like Furlenco and Rentomojo.