Mehul Agrawal is a co-founder at FabFurnish.com, who heads the operations and logistics departments with great zeal and enthusiasm. Under his strong leadership and great aptitude, FabFurnish.com has emerged as a strong brand in a short span of time. Mehul is a Silver Medalist from the prestigious Indian Institute of Management –Calcutta. His professional experience prior to FabFurnish.com includes Investment banking at Morgan Stanley and management consulting at The Boston Consulting Group. His multitude of experience across industries – telecom, banking, retail, consumer goods, airline engineering, and across geographies – London,New York, Sydney and India, coupled with a strong vision to become an entrepreneur, led him to FabFurnish.com where he has displayed incredible expertise across the diverse portfolios which he manages.

1. -­‐
Mehul
Agrawal
Co-­‐founder
and
Managing
Director
Relevance of online
platform for Furniture
Industry

2. AGENDA
E-commerce - Why e-tailing?
Furniture e-tailing – Why Furniture as a category will do great online?
Understanding Customers - Who are they and what’s in it for them?
Implications – What do brands/vendors need to do?

3. Before we start – What do you think of
online?
Online is for discount mongers – cheap cheap cheap!
• 60%+ sales without discounts
• Repeat purchases are significant – shows genuine interest
Online is for urban population – hi-tech youngsters!
• 40% sales outside top 10 cities; expected to rise to 60%
Only low value products sell online
• Maximum basket size – 2.5 Lacs; 70-80% revenues from orders above Rs. 3,000
Online has excessive returns – loss making proposition
• <5% returns when managed properly, and doubles the conversions online

4. E-­‐commerce
–
Why
e-­‐tailing?

5. Indian retail market is largely unorganized
E-tailing is providing impetus to growth of organized segment
However,
overall
share
of
e-­‐commerce
in
India
will
s5ll
be
miniscule
(~1%)
compared
to
US
(~9%)
and
China
(7-­‐8%)
3%
5%
12%
20%
2005
2010
2015
2020
0%
10%
20%
30%
Organized
as
a
%
of
Total
Retail
13-­‐15%
25-­‐30%
60%+
Overall
Retail
Organized
Segment
e-­‐Commerce
CAGR
OF
RETAIL
CAGR
>90%
market
sCll
unorganized
today
E-­‐commerce
is
expected
to
grow
5
Cmes
faster
than
overall
retail
Source:
Broker
Research

6. 29
36
46
60
80
137
190
273
376
3%
3%
4%
5%
7%
10%
15%
22%
30%
0
100
200
300
400
2007
2008
2009
2010
2011
2012
2013
2014
2015
0%
25%
50%
Unique
Users
(million)
Penetra5on
(%)
Increasing penetration of internet is fueling
e-tailing growth
4
5
7
8
11
13
21
28
45
2007
2008
2009
2010
2011
2012
2013
2014
2015
0
25
50
Users
transac5ng
online
(million)
Exponen5al
growth
of
users
that
will
be
transac5ng
online
By
2015,
30%
of
Indian
populaCon
will
be
using
internet
10%
of
Internet
users
are
already
transacCng
online
Source:
Avendus
Es<mates

7. Consumers are also spending more time
online to aid their purchase decisions
71%
64%
29%
24%
15%
9%
6%
3%
19%
10%
0%
20%
40%
60%
80%
Family
Friends
Online
product
reviews
Product
web
sites
Search
engines
Discussion
forums
Social
media
sites
Influen5al
bloggers
TV
News
sources
SOURCES
OF
RECOMMENDATIONS
FOR
PURCHASE
30
45
2011
2015
0
25
50
75
100
125
150
DAILY
AVERAGE
TIME
SPENT
ONLINE
Minutes
spent
online
(India)
USA
9%
13%
18%
33%
19%
8%
<5
5-­‐10
10-­‐15
15-­‐20
20-­‐30
>30
0%
15%
30%
45%
%
of
Purchase
Sessions
LENGTH
OF
A
PURCHASE
SESSION
(MINUTES)
Online
sources
are
aiding
purchase
decision
of
Indian
consumers…
…who
conCnue
to
spend
more
Cme
online,
sCll
behind
global
peers
though
Source:
Avendus
Es<mates
Source:
B2C
e-­‐Commerce
report

8. Diversified access ensures that next growth
wave comes from smaller cities and towns
80%
60%
40%
2007
2012
2016
0%
25%
50%
75%
100%
%
of
total
customers
Online
players
are
gaining
increasing
business
from
smaller
ciCes
and
towns…
…as
the
pla_orm
provides
an
instant
vast
reach
compared
to
offline
organized
players
Source:
Avendus
Es<mates
IllustraCve
depicCon
of
reach
of
organized
players
Broadband
reach
and
3G
penetraCon
are
key
drivers
%
of
revenues
coming
from
top
10
ciCes

9. Bottomline: Indian e-commerce will witness
a huge growth ~$70 bn by 2020
0.3
0.4
0.6
1.6
9
2009
2010
2011
2012
2016
2020
0
5
10
15
20
INDIAN
E-­‐COMMERCE
MARKET
SIZE
($
BN)
Total
Market
Size
55-­‐60%
CAGR
expected
5ll
2020
Source:
Industry
reports,
Analyst
es<mates
70

10. Online
Home
&
Furniture
Retail
–
Why?

11. Furniture
Jewellery
Home
Furnishing
Kitchen
Health
Products
Apparels
Fashion
Shoes
Cosme5cs
Books
Electronics
Computers
Appliances
Nascent
Categories
Mature
Categories
Furniture Retail is on its course of being the
next big category for e-commerce
Source:
Global
Webindex

12. Early signs indicate a promising yet
untapped opportunity
362%
119%
100%
98%
90%
76%
75%
13%
3%
3%
2%
2%
10%
15%
0%
100%
200%
300%
400%
0%
5%
10%
15%
20%
GROWTH
ACROSS
CATEGORIES
IN
E-­‐COMMERCE
YoY
Growth
%
Reach
%
Source:
Report
–
State
of
e-­‐Commerce
in
India

13. Internationally, furniture has already emerged
as next big trend in online shopping
• Home
products
are
50%+
sales
• Turnover:
$150M
(2012E)
• Turnover:
$200M
(2012E)
• 100%
YoY
growth;
75%
repeat
rate
• 1B+
online
visitors
(Alexa
Rank:
294;
Zappos:
737)
• 25%
growth
in
online
sales
• Turnover:
$600M
(2012)
• Turnover:
$150M
(2012E)
Home
goods
market
in
U.S.
is
$500bn
and
6%
of
it
is
online
Source:
Press
release,
news
ar<cles

14. Case in point –
11
Million
members
across
26
countries
33%
33%
sales
via
Mobile
device
Purchase
Repeat
66%
Repeat
purchases
by
members
50%
sales
are
home
products
In
18
Months
15000
products
online
15%
exclusive
90%
not
available
on
other
major
websites
66%
Source:
Press
release,
news
ar<cles

15. Online search volumes are also rising rapidly
Expected to follow trajectory of established categories
2007
2008
2009
2010
2011
2012
2013
0
25
50
75
100
ONLINE
SEARCH
FOR
ITEMS
IN
GOOGLE
Shoes
Furniture
Wall
Clocks
Bed
Sheets
2006
2007
2008
2009
2010
2011
2012
2013
0
25
50
75
100
Furniture
2007
2008
2009
2010
2011
2012
2013
0
25
50
75
100
Bed
Sheets
Source:
Google
Trends

16. Even for e-tailers, Home and Furniture
provide a great business case
Higher
Margins
and
Lot
of
Private
label
50%
lower
returns
than
industry
standards
for
other
categories
Purchase
Repeat
2-­‐3x
basket
size
–
both
number
of
items
&
Ccket
size
Nascent
but
already
seeing
repeats
at
15-­‐25%
Flurry
of
e-­‐commerce
ventures
dealing
in
Home
&
Furniture
over
last
year…
…as
it
provides
a
great
business
opportunity
compared
to
other
categories

17. And there are significant advantages over
the traditional physical model too
Network reach
Operational hours
Range of products
Product launches
Product pricing
Basket size
Floor negotiations
Retail Investment
Sales force
Warehousing cost
After sales
Delivery timelines
Product assembly
Scale
&
Presence
Sales
Investments
Service
levels
Physical
Online
Physical
Online
E-­‐com
catching
up
through
local
presence

18. Lastly, you can do so much more online…
Assortment + Depth
• Why make a choice? Go wide and go deep
Be closer to customers
• Get instant and accurate feedback on what customers want and what they perceive
Leverage market intelligence
• Data/Analytics/Behaviour/Patterns everything is at disposal
Run pilots/exclusivity campaigns
• ‘Will it work’? Push customers online by maintaining exclusive ranges
Trigger impulse buying?

19. Understanding
Customers
–
Who
are
they
and
what’s
in
it
for
them?

20. 51%
0%
10%
30%
26%
14%
9%
5%
7%
49%
0%
11%
26%
23%
14%
9%
6%
10%
Total
Customer
Less
than
20
20-­‐25
25-­‐30
30-­‐35
35-­‐40
40-­‐45
45-­‐50
More
than
50
Female
Male
25-35 years is the key age group for Home
However, gender split remains equal
Given
only
20%
online
shoppers
are
women,
the
category
has
a
significantly
higher
penetra5on
among
women
Source:
Industry
es<mates

21. 60% sales comes from top 10 cities
South is the largest region with a ~40% share
29%
7%
25%
37%
2%
%
OF
SALES
FROM
DIFFERENT
REGIONS
North
East
West
South
North-­‐East
35%
of
all
sales
come
from
Metros;
60%
comes
from
top
10
ciCes
South
provides
the
largest
pla_orm
for
online
sales
contribuCng
~40%
of
sales
35%
25%
40%
Metros
Next
6
Ci5es
Rest
of
India
%
OF
SALES
FROM
DIFFERENT
CITIES
%
of
total
sales
Source:
Industry
es<mates

22. 2,095
1,549
1,634
1,825
2,165
2,278
2,323
2,412
2,391
2,748
2,988
1,675
2,443
2,591
2,940
3,482
3,247
3,418
Total
Customer
Less
than
20
20-­‐25
25-­‐30
30-­‐35
35-­‐40
40-­‐45
45-­‐50
More
than
50
Female
Male
Basket
Size
Men have a significantly higher basket size
than women across age groups
Source:
Industry
es<mates

23. Repeat
Rate
%
customers
making
next
purchase
20%
10%
12%
16%
21%
24%
24%
26%
25%
15%
11%
9%
12%
15%
17%
19%
20%
23%
Total
Customer
Less
than
20
20-­‐25
25-­‐30
30-­‐35
35-­‐40
40-­‐45
45-­‐50
More
than
50
Female
Male
Male
However, women depict greater loyalty and
have higher repeat rates
Source:
Industry
es<mates

24. Critical to address consumer sentiments
across the board to enable online purchase
Can
I
trust
the
website?
Will
I
receive
the
products
safely?
Will
the
products
get
delivered
5mely?
How
do
I
raise
my
queries/concerns?
What
5me
of
the
day
can
I
make
the
purchase?
What
kind
of
payment
op5ons
are
available?
Is
the
variety
of
products
sufficient?
Are
the
products
different/unique?
Is
the
overall
deal
aorac5ve?
What
exactly
will
I
get?
How
can
I
experience
the
products?
How
will
the
products
get
assembled?
Trust
and
Safety
Added
convenience
Value
proposiCon
DemysCfying
products
1
2
3
4

25. Can
I
trust
the
website?
Will
I
receive
the
products
safely?
Will
I
receive
the
products
Cmely?
Guaranteed
Delivery
in
8-­‐13
days
Addressing consumer sentiments:
Trust and Safety
1

26. What
exactly
will
I
get?
How
do
I
experience
the
product
–
Touch
&
Feel?
How
will
the
products
get
assembled?
Addressing consumer sentiments:
Demystifying products
2

27. Is
there
a
sufficient
variety
across
categories?
Are
the
products
different
or
unique?
Is
the
overall
deal
asracCve?
Foldable
Wall
Shelves
350
200
75
50
50
50
Living
Room
Furniture
Bed
Room
Furniture
Dinning
Furniture
Outdoor
Furniture
Bar
Furniture
Workspace
Furniture
0
250
500
#
of
SKUs
Addressing consumer sentiments:
Value proposition
3
LOVE
Wall
Shelves

28. How
do
I
raise
my
queries/concerns?
When
can
I
make
my
purchases?
What
kind
of
payment
opCons
are
available?
0%
50%
100%
11
AM
-­‐
9
PM
9
PM
-­‐
11
AM
%
OF
SALES
BY
HOUR
33%
Addressing consumer sentiments:
Added convenience
4

29. ImplicaCons
–
What
do
brands/vendors
need
to
do?

30. • Focus on online
• Exclusive range
• Invest into systems and processes
• On time delivery
• Be flexible – allow returns
A genuine focus is all it needs

31. Thank You