 "Rajiv Srivatsa")
Urban Ladder, an online furniture seller backed by Tata Sons Chairman Emeritus Ratan Tata, is looking at virtual reality to help homeowners take decisions on what to buy. The Bengaluru-based firm is eyeing profitability and padding up for competition from global giant IKEA, which will soon open offline stores. “We will be in a space by within the next five years where there will be room for everyone to play,” said Rajiv Srivatsa, co-founder and chief operating officer (COO) to Apurva Venkat. Edited excerpts:
What is the current focus?
Currently, the focus is the new homes business: Kitchenware, wardrobes, interior design — the whole package to excite a new customer.
The focus is this because it’s almost like running a second business. Everything is very different: products, material, the selling process, the installation and delivery. We have put in place a strong team in the last one-and-a-half years.
Now, we are ready to accelerate. In the next 12 to 18 months, we shall have the technology in place and the processes shall be automated. If the new business now contributes to 10 per cent to our total business might contribute 30 per cent by the end of the year.
We have been doing a lot more deals with banks for home loans. We have partnerships with Tata Sky and Quikr.
What is your plan for profitability?
The overall macroeconomic situation today — compared to the last 12 months — has become far worse, especially in e-commerce. This means companies are going to be talking about profitability a lot more.
We are trying to drive efficiency in every part of business. Everything from pricing to the product portfolio is rationalised. We are working with a world-class consulting company to make sure that the inventory, from our suppliers’ perspective, is well thought through.
We are looking at operational profitability in the next nine to 10 months and fully profitability in the next 24 months.
How are you planning to ensure customer satisfaction?
We have a team which is really strong in driving consumer satisfaction. Urban Ladder has been known for its customer satisfaction score. Now, there is international competition and horizontal entrants into the sector.
We need to concentrate on loyalty and referrals, and keep customers engaged beyond their first purchase.
At present, 70 per cent of our products are designed or tweaked by us. Out of this, 30 per cent is designed solely by us. This contributes 60 per cent to our revenues. We want to be self-served; we are not so self served right now.
We have month-on-month growth of eight to 10 per cent. Yearly, we are targeting a 2.5 to three times growth, compared to the four times growth last year.
Other than automation, what else are you doing to be profitable?
We are cutting a lot of wasteful expenditure. For example, we have completely cut TV advertising; now, we stick to digital.
We’ve brought down advertising and marketing costs by almost a third.
How do you make the online furniture space more experiential for the customers?
Among the categories that require offline presence, sofa is the most important. Next are kitchens and wardrobes. So, we get a person to go to customers’ homes to take measurements.
Next is interior designing. It’s difficult to take care of aesthetics and space. Our backend software helps designers do it quickly for you.
The customer gives us the specifications — colours, number of people living in the house.
Again, our software helps the staff create the views (2D, 3D) for the customers.
How do you plan to deal with IKEA’s entry?
We have to be dominant on in the new-homes space. Also, we have to be self-funded in the next 24 months.
Customer experience is very important. We believe our customers have very good experience. Even IKEA will need outsourced partners for delivery and after-sales services. If we grow strong, they will find it difficult to beat us.
We should be the first choice in the market, before IKEA enters. While they take their time to launch in the top four or five cities in the next 24 months, we should be at the top. As a category moves from commodity to lifestyle and unbranded to branded, market share moves towards these folks. So, they are not fighting against each other.
We will be in that space in the next five years, where there is room for everyone to play. We are all taking away from the carpenter. There will be more brands but two or three which are sizeable. We hope to be one.
Do you plan to go offline?
There no right answer for it. For now, nothing; but never say never.
