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Online Retail Sector

Company B
Business Model
Key
Activities
Order Processing
Inventory Management
Customer
segment
Home Decor
Value
Proposition
Make to order with customization
Low cost strategy: Use of recycled wood
Furniture Market Overview in India
Furniture market in India is highly unorganized with
organized sector having 15% market share.

Branded Furniture market in India is mainly
concentrated into 1 or 2 tier cities.

Market is driven by increasing income levels and
increased consumption of lifestyle products.
0
50
100
150
200
250
2008 2010 2012 2014
Market Size and Growth
Market Size and
Growth
INR Bn
30 %
Market
Issues
Market
segment has
low
absorption
to innovation
and change.
Lack of
Quality
awarenes
s.
Large
fluctuation in
demand
leading to
stock
uncertainties.
Corruption
in India
Market is
Restricted
to top tier
cities
only.
Indian
consumers still
want to refrain
from buying
online as they
want to have a
touch and feel
factor involved.
Market Segment
65%
35%
Key Consumer segment
Domestic Market
Commercial Market
Need & Demands
Availability of wide range of products at a single
platform with an option of customization.
With the growing urbanization, needs of luxurious
furniture is still unfulfilled.
The demand is exponential in metropolitan as
well as tier 2 cities.
Rural areas as well as 3 tier cities has the
potential but the market penetration is difficult.
Switching Costs
The on-time delivery with an option of
customization is an invaluable feature for the
customers.
Availability of such wide range of products at a
single platform is a huge time saviour.
Providing quality products made up of best raw
materials available.
Easy replacement scheme is another
unmatchable quality.
Revenue Attractiveness
Customers are always willing to pay for products
with:
Quality finishing
On-time delivery
Option of customization
Replacement scheme
Biggest margin is achieved due to products
volume and removal of physical distribution
centers.
Only thing which is more cheaper and easily
available is local handloom shops but they are
losing the edge because of their lack in modern
trends.
Competition Overview
Furniture market is dominated by unorganized sector
(85%) and remaining 15% comprises of large
manufacturers.
Industry scenario

The competitors
Retailers
Godrej Interio
Stylespa
Durian
Nilkamal
Millennium Lifestyle
Online market
Ikea
Fabfurnish
Pepperfry
Urban Ladder
Retailers
Competitor Customer Segment Competitive Advantage
Godrej Interio

Home, Office and lab
products
Quality, Brand name
Stylespa Home and office ISO certified state-of-the-art
plant which produces 0.2 million
Durian Imported furniture Plywood manufacturing
Interior design consultancy
Nilkamal Lifestyle furniture:
Complete home solution
store
350-member wide direct sales
network, and a 350-plus strong
dealer network
Millennium
Lifestyle

One stop solution from
the best brands in
Europe and Far east
Online interactive room
designer
Online Market
Competitor Customer Segment Competitive Advantage
Ikea Home decor and low
income individuals
Low cost structure, International
brand image
Fabfurnish Home and kitchen
designs
Hybrid marketplace model, with
both online and offline stores.
Part-Payment method
Pepperfry Urban middle class who
are setting up homes
Make-to-order, Hub and spoke
distribution model
Urban Ladder Home solutions In-house team of experienced
designers, Zero friction delivery
New Entrants
The capital requirements for creating a website
are relatively low
The distribution channel is not proprietary to the
existing players
Low cost of switching
Customers do not have much brand loyalty in
the online furniture sector
The new entrant can start on a small scale and
then easily increase to a large scale operation
New Entrants: Pepperfry and Fabfurnish

Substitute Channels
Organised Retail
Furniture Stores
Unorganised
Local Furniture
Vendors and
Carpenters

Teleshopping
Substitute Products
Inflatable
Furniture
Local
Handicrafts
Manufacturers
Metallic
Furniture
Plastic
Furniture
Supply Chain Management
ORDER
WAREHOUSE
MANUFACTURE
R
CUSTOMER
If Standard
item
If customized
Item
Supply Chain Management
The key players in our value chain are the
manufacturers, warehouse managers and
Customers.
The business model is totally dependent on the
above three Value chain players.
As we are not producing nor assembling the
product we are not concerned with raw materials
supplier but it would be affecting us indirectly as
per the trends a lot of these wood types have to
imported.
This industry is new and customization is a difficult
process a lot of players have not emerged till now.






Stakeholders
Government, Customers and Manufacturers are
the stakeholders.
Government through a lot of regulations has a
direct effect. For e.g. Competition law
Customers and manufacturers have a great
influence on the business model.
Workers indirectly also have a big impact as they
can affect the cost of the Furniture as well as
Labour laws, Factory Act etc.









Technology Trends
Use of Mobile phone technology
Use of smart phones applications for online shopping is
making it easy and quick for the customers.
Retailers are leveraging consumer adoption of mobile
channels with mobile offers using big data and technology
to get more personal and relevant with consumers

Use of interactive tools on online sites
Example : Change of colour of furniture, building modular
furniture, designing of spaces online


Ease of Online payments
Transactions and payments are a lot easier now with the
use of online transactions like paypals, google check etc.

Ease of Customer relationship management
Use of customer information to personalize the online
shopping experience through personalized
reccommendations.

Use of Video marketing and social media
Video marketing is becoming more cost effective with
accessible new technology. Video is becoming a perfect
medium for customer testimonials and product overviews
Use of social media to enhance brand awareness among
the customers and listen to customers.

Societal and Cultural Trends
Decorating a new house

Renovating a house

Furnishing a commercial complex
Socio-economic Trends
Changing consumer demographics

Real estate/housing boom

Tourism and hospitality industry
growth

Consumer Demographics
Real Estate/housing boom
Tourism Industry



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By:
RAJ SWAPNIL SURENDRA (177)
ANIRUDDH CHAKRAVORTY (307)
AAKASH CHHARIA (309)
TOSIN GANDHI (311)
SANCHIT GUPTA (312)
SHIVAM GUPTA (313)
SUMIT HANDA (314)
SHUBHANG JHAWAR (317)

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