2020 is to most Indian furniture companies what 2017 was to payment companies. “It was our demonetisation moment,” says a senior executive managing furniture for one of the leading e-commerce platforms.
This year, the pandemic forced Indians to buy furniture online like how having 85% of their currency invalidated overnight in November 2016 forced them to adopt digital money. The resulting tidal wave in 2017 lifted virtually every payments app to levels beyond their own rosiest predictions.
As millions of professionals were suddenly liberated from working out of offices due to a sudden lockdown, with no clear date to return, many gave up their rental apartments and went back to their respective hometowns and cities. Overnight, homes turned from places you spent half a week to where you spent every waking hour of every day.
This was the moment online furniture sellers had been waiting for.
In the US, Wayfair, the largest online seller of furniture saw its largely languishing stock shoot up nearly 700% since hitting a low in March as the pandemic rolled in. Founded in 2002 and listed in 2014, Wayfair earned $9.1 billion in revenue last year but has yet to turn profitable. Between April and June, it added 5 million new customers, more than the number it had added in the entire previous year.
In India, with cities and stores shut, Indians were forced to overcome their reticence towards ordering furniture off a website. They gingerly started by ordering study tables and chairs, in many cases subsidised or paid for by their employers who had quickly created WFH (work from home) allowances.
Then, as the lockdowns refused to ease up, they started ordering sofas, wardrobes and bookshelves. And once they made peace with being stuck at home for possibly the next 12-18 months, the orders for beds, mattresses and dining tables started pouring in.
“The months of March and April were washouts, but we’ve done more business in the next six months than we did in all of 2019,” said the executive quoted earlier. Like most of our sources increasingly, he too declined to be quoted by name because his employer strictly forbids media interactions.
The one player you would expect to surf this pan-India wave is Urban Ladder.
Founded in 2012, it was backed by $105 million in venture funding from respected funds like Sequoia, SAIF Partners and Steadview. It was also the largest in the space based on 2019 revenue and even declared a profit for the year, a rarity in e-commerce.
2020 should have been Urban Ladder’s year like how 2017 was payments platform PhonePe’s or 2020 edtech Byju’s. A year to reap the rewards of eight years of hard work.
Instead, Urban Ladder was forced to sell itself to Reliance Retail, the retail arm of India’s largest private conglomerate.