The battle for India’s $32 billion furniture market heats up
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Ikea is celebrating its first anniversary of operating in India. Even though the company secured regulatory approval to enter the country in 2013, it took five years of effort and significant investment before the first Ikea megastore opened its doors to Indian consumers in Hyderabad in 2018.The global furniture market size was USD 475.4 billion in 2020. According to DataLibraryResearch market is projected to grow from USD 493.6 billion in 2021 to USD 720.2 billion by 2028 The global furniture market size was USD 475.4 billion in 2020.The market is projected to grow from
USD 493.6 billion in 2021 to USD 720.2 billion by 2028 The global furniture market size was USD 475.4 billion in 2020.The market is projected to grow from USD 493.6 billion in 2021 to USD 720.2 billion by 2028 The global furniture market size was USD 475.4 billion in 2020.The market is projected to grow from USD 493.6 billion in 2021 to USD 720.2 billion by 2028.
The response was overwhelming—40,000 shoppers turned up on day one, resulting in two-hour-long queues just to get inside, while traffic built up outside the store.Ikea has since purchased land parcels in Mumbai, Bangalore, and Gurugram (near Delhi), announced a 10-fold increase in its employee numbers to 15,000 and set a target to reach 200 million customers in three years.Despite Ikea’s big ambitions to increase its presence in India and capitalize on a growing middle-class market, as well as its experience in doing so around the world, it faces stiff local competition from Pepperfry, India’s existing, largest online furniture retailer.On the surface, there is no comparison between Ikea and Pepperfry. One is a global player with deep pockets, more than $40 billion in revenues, and decades of experience; the other is a six-year-old venture capital-backed startup that is yet to turn in profits.But a closer look at Pepperfry’s business fundamentals reveals that there is more to it than meets the eye.STRATEGIC CHOICESWhen Pepperfry’s cofounders, Ambareesh Murty and Ashish Shah, both formerly of eBay, made their first investment pitch to a venture capital firm in mid-2011, the concept of an online furniture marketplace was unheard of.Furniture was not a natural fit for e-commerce because of its high value and nonstandard nature (compared to books, music, or electronic goods). Indian consumers preferred local retailers or trusted carpenters over an online suplier. Plus, the supporting infrastructure in terms of logistics was lacking.Undoubtedly, Pepperfry had decided to follow a riskier path in building a business model around an online platform. But its cofounders made some strategic choices to create a successful business.One of the trickiest elements of the furniture business is offering the right combination of variety, quality, and price.Murty and Shah changed the game by building a well-curated offering from specialist merchants, small and medium enterprises, and artisanal woodworkers in furniture manufacturing hubs in north India.They built personal relationships with their suppliers, digitized their catalog, and constantly improved their operations.After carefully selecting and listing products, they then used data analytics to track which ones are most popular and scale up or remove them accordingly. Based on consumer choices, they continually give feedback on designs and trends to their manufacturers.Success so far has also been built by ensuring that Pepperfry offers customers the same service in multiple ways—whether that’s online via their computer or mobile, or offline. This omnichannel approach is increasingly important for the success of any retail business.