The report added that the total unique buyers for the online furniture and home market is also expected to be about 40 million by FY2026. The growth in the industry is fuelled by the fact that online shopping in India has become mainstream and spending per shopper has also doubled in the last five years and is adding about 20 million new product shoppers every year.
Further, the online furniture category is expected to see a 3x growth in five years with about 1.8x jump in annual spending per shopper. Which is in turn expected to enable more than 5x GMV growth for the category over FY 21-26.
Similarly, the online home category which includes home decor, furnishings, mattress, lighting, and others is expected to see a growth of about 2.5x in shoppers in the next five years with 1.3x jump in the annual spending per shopper to indicate about 4x GMV growth.
The analysts at RedSeer have pointed out two challenges to the online and furniture and home categories. One, both the categories are design-driven and requires browse browse-first interface raising the need for 3D merchandising. Thus, use of innovative technologies in this category will be key for the industry players.
Players like Pepperfry have already started working on integrating augmented reality and virtual reality capabilities with their platform. Flipkart too has launched Flipkart Camera to enable augmented reality-led commerce across categories including furniture and home products.
Further, existing supply-chain also need to be optimised to cater to standard sizes and formats of furniture and furnishings. Large and non-standard shipments come with challenges from packing to installation.
The category is currently served by horizontal (like Pepperfry, Livspace) and vertical players (Flipkart, Amazon) where vertical players are marketplaces or private labels who are serving within the category whereas horizontal players are large e-commerce who are selling everything under the sun.
The report observes that the average listing price on verticals is about 2x higher than horizontals, indicating the difference in target customer base. Verticals with superior omnichannel presence, customer experience, product innovation, specialised supply chain, and technology capabilities are well-positioned to scale, the report added. Courtesy: www.thehindubusinessline.com
