Saraf Furniture’s Focus On Ecommerce Ushers In 3X Growth Even In Lockdown

MSMEs and small and medium businesses (SMBs) are undoubtedly the backbone of India’s economy. According to the MSME ministry’s annual report for 2019, India has currently over 63 Mn MSMEs out of which 99.4% are micro-enterprises. However, since the advent of the coronavirus pandemic, the MSME and SMB segments have been grappling to survive, let alone grow.

Recognising the struggle, both the government ⁠— with the allocation of INR 20 Lakh Cr as a relief fund ⁠— and tech giants such as Amazon India’s Partner Support Fund and workshops, Google’s $800 Mn investment to the Covid-19 fund, Microsoft’s Back2Business Solution Boxes and more ⁠— are focussing on supporting the sector’s economic revival. Among the SMBs, the worst hit have been those businesses that were dependent on retail consumers and physical stores, according to a Zinnov’s Indian SMBs: On The Road To Recovery From Covid-19 report. 

Digitisation is the new normal as the world fights to survive the pandemic. Needless to say, it is vital for SMBs to use digital tools to avoid fading away. For the same, different SMBs have resorted to different ways to sell online. While some entered into partnerships with ecommerce marketplaces such as Zomato, Dunzo, others are doing it through Facebook, Instagram and more or through their own websites.

But though digitisation has become a necessity to survive in these times, there are businesses who understood the benefit and the need to move online quite some time ago — and we don’t mean just by utilising the ecommerce network. Many small businesses recognised the need to control the whole chain. Among this group is Saraf Furniture, which shifted to ecommerce six years ago with insaraf.com. The Rajasthan-based retailer and manufacturer of solid sheesham wood furniture has been in the business for over 40 years. 

“The journey started with trading solid Sheesham wood furniture in the local markets of our village. The business saw forward integration when we started exporting furniture in late 1999,” said Raghunandan Saraf, founder and CEO, Saraf Furniture.

A tech enthusiast and a keen entrepreneur, Raghunandan told Inc42 that he has constantly looked to bring the business on par with modern needs. Expanding it online was not only logical but also the most feasible option to compete with the new breed of furniture startups. “The online business does have its pros and cons, but people’s inclination towards the usage of web and online shopping made the shift and expansion important,” the founder added.

Today, Saraf Furniture works in a hybrid or omnichannel model with both online sales as well as offline stores. Claiming to have sold over 2.5 Mn products till date, it has an inventory of close to 5K SKUs spread across 50 categories which includes sofas, tables of all kinds, beds, wall units, mattresses, other small furniture and more. Amongst the categories that have brought the most revenue for Saraf Furniture are sofas, dining tables and beds.

Additionally, it also claims that since its shift to the online market, it has noted a month-on-month growth of 10%, a year-on-year growth of 200%, along with a healthy average ticket size of INR 25-30K per day. 

The Covid-19 Impact On Saraf Furniture

The furniture retail industry had seen a massive hit from Covid-19. Raghunandan told us that in the month of March 2020 alone, there had been over 80% drop in the sales and almost all furniture manufacturing units were shut since the announcement of the first lockdown. As a result, businesses started focussing more on conserving cash rather than spending it. So while others were pulling back their marketing and advertising spends, Saraf Furniture decided to go the other way.

“We realised that if we cut back our marketing spends, we run the risk of losing visibility. So, we decided to not cut back but rather increase that spend. Another factor that motivated us was that advertisers were less and the viewers were more. So when things are normalised we will not have to start from scratch,” Raghunandan Saraf, founder and CEO, Saraf Furniture.

It also added video calling and video customer service to assure customers. A customer could place a video call to an expert to get advice on the purchases, and after placing the order, the customer would get a video call from the store to show the product packaging before delivery. This not only reassured customers, but added trust to the process. Often delivering products safely in a tough time wins over customers more than discounts. 

“Giving expert advice on a video call, customising the products and delivering them to the doorstep is the new version of virtual shopping. Our customers can schedule their video call according to their time and convenience,” said Raghunandan.

Before the lockdown, the company claimed to be receiving 3K orders per month after it resumed its business not only did it see the number go up to 4.5-5K in the first week of May itself but also that after the first week of May it has noted a 200% surge in sales.

“To survive and grow during the lockdown was challenging, as every operational module was on hold. Amidst lockdown, with liberalisation in MHA guidelines, we could take up the operations and could deliver the furniture in the green zone,” explained Raghunandan.

But at the same time, it did not overlook the safety of both its customers and delivery agents.  “We practised social distancing, proper sanitisation, masking, and also did frequent thermal checkups of the employees. Even while making the delivery, social distance is practised, a thermal checkup of the delivery staff is performed, and the deliverable is properly sanitised in front of the customers,” elaborated Raghunandan on the changes and additions in recent weeks.

With the pandemic forcing businesses to shift to remote operations, Raghunandan noticed two major shifts in the sales of its products, “There has been a 600% increase in the sales of study tables and also while most customers used to delay purchasing furniture for the holidays, now they have become very proactive,” he said.

Planning For A Tech-First Future

In the furniture ecommerce market, Saraf Furniture faces competition from furniture startups such as Urban Ladder, Pepperfry and more. However, its lifetime warranty on termite resistance as well as the exclusivity of manufacturing and selling solid Sheesham wood furniture is its major differentiator. “Being a manufacturer and online retailer we sell the genuine quality sheesham wood furniture directly from the outlet, making it cost-efficient. As a result, 30% of the price varies from that of our competitors,” added Raghunandan.

As for delivery and fulfillment, Saraf Furniture has complete control over this aspect as well. “We used the services of a third-party for deliveries for at least two years, but soon we realised that once shipped we had no control over the time and day of the delivery, handling of the product and more. Also, our products require installation so after the delivery, someone from our team would have to go for it,” explained Raghunandan as the reason behind eliminating the use of third-party for making deliveries.

Another thing that makes the business stand out is that while SMBs struggled to get help from the government for their survival, Saraf Furniture decided to help the central as well as the state government, in their fight against the pandemic. Raghunandan told Inc42 that the company spent about INR 25 Lakh in distributing masks, PPE kits, medical kits, food kits in Sardarshahar, Rajasthan, where it is based, and also donated INR 1 Cr to the PM Relief Care Fund. 

There is no denying the fact that, foraying into the online market is not an easy task, especially for a traditional business like Saraf Furniture. Even then, it says that the most critical challenge for it was drawing awareness about the genuine quality sheesham wood furniture and online payments. “We acknowledge the fact that customers were sceptical regarding online advance payments. To that, we commenced a new service of easy financing or an Easy EMI facility for our customers,” explained Raghunandan. 

Going forward, Saraf Furniture says that it is working on creating a 3D structure of the products to provide its customers with a more realistic view and feel of the same. It told Inc42 that it is planning to implement it with five products each, in the ten highest-selling categories as a pilot product to test the viability of and the response to the idea.

“Next comes the VR technology, the user will be able to virtually experience the store, furniture, and the home decorated with our products. This will aid the user in understanding the furnishing and make the best choice. Also, with the latest advancement in tech, the post buying pattern would use the redressal system to provide redressal with 4 hours ETA,” Raghunandan said.

Currently operating in Delhi, Bangalore, Surat, Ahmedabad, Rajasthan and Hyderabad, Saraf Furniture is leveraging its network to expand its reach to Chennai, Mumbai, Pune, and Guwahati.