MebelKart: An Online Furniture Marketplace Providing 360* Home Solutions
We raised $ 20 million from Askme in August 2015. We are looking to raise $100 million within the next six months. This money will help us expand our coverage area, hire more employees and test waters in countries like Malaysia and Kuwait.
Photo Credit : Left to right: Nikhil Saraf, Rahul Agrawal, Ranjeet Vimal, Rahul Agrawal Co-Founder & CEO MebelKart,
Bangalore-based Mebelkart was founded in November 2012 by three co-founders Rahul Agrawal,Nikhil Saraf and Ranjeet Vimal. Initially it was started out by selling bean bags in the city. Today the startup is delivering in 20, 000 pincodes across 200 cities in India.
Sujata Sangwan Interacts With Rahul Agarwal, Mebelkart’s Co-founder & CEO and Spoke to Him
How does Mebelkart work?
MebelKart primarily has two business models, namely the retail business and the interior design business. When it comes to its retail business, it involves the customer visiting the website to buy a specific product, choose from the options available and place their order. Thereafter, the product is manufactured and delivered to the customer.
The delivery is done by our partners and even our delivery timelines are better than the industry average. Even our range of products are about 29% cheaper than those of Pepperfry or Urban Ladder. Our hyperlocal business model in the online furniture space ensures that we are differentiated from our competition. When it comes to our business, the cost margins are about 35-40% and the net revenues are 15-20%.
As far as our interior design business goes, we present home interior designs to the customers online. The designs are from numerous interior designers and are inclusive of their previous projects, their works, as well as the comments and ratings they have received. We, at Mebelkart deliver a complete home for our customers in 45 days and ensure that we take care of both the timelines and the cost. The cost we offer is significantly lower than what the market offers.
We, at MebelKart make complete homes. If someone wishes to get interiors done and buy furniture, MebelKart does the entire process for you. We hire interior designers; get the materials procured and more. We have tied up with in-house design expertise, i.e., the best interior designers in the country and have a working relationship with close to 2000+ factories across India.
The vision of the brand is to create a one-stop destination for the home furnishing and décor needs of Indian consumers. We wish to design every home in India.
How did the entrepreneurial bug bite you?
I always had an entrepreneurial outlook, this is true of even when I was a student studying in IIT Delhi. It was in my very first year there, after a 45 day internship in Delhi, I was making mobile games and sold them to Pizza Hut and Dominos. I then decided to scale it up further and conducted workshops at IIT Kanpur, and choosing the best among them formed ‘Young Engineers’. As a company, Young engineers completed workshops in about 150 colleges across the country in a short period of 3 years. This was my learning phase and I gained a lot of insight on how to run a business.
This involved building business relationships, negotiating with people, money management, working on business documentation and more. It is here that I learned how to take people along while being a businessperson. My outlook changed from believing that if you put in the hardwork, you will get the desired results to realizing that there are a lot of other factors involved. I continued to run Young Engineers even after graduating and did not appear for campus placements. Soon, thereafter, I joined a startup called PicSean Media in late 2011 where I met my now partners Ranjeet Vimal and Nikhil Saraf, who came with lots of experience and business knowledge.
How did the idea came to start? What are the special key features of your startup?
It was after a lot of discussion and brainstorming that we decided to sell furniture online. We felt that there was a vacuum in this industry and wished to play an important role in organizing the highly disorganized furniture retail market in India. We, the founders of MebelKart realised that in the furniture segment there were gaps, nothing was standardized and there existed no brands. The fact that there was no standardization also meant there was no fixed pricing system. A lot of problems related to delivery were there and there were no systems in place. Quality measurements were and still remain an issue which we are trying to resolve.
We started out by selling limited range of furniture to the buyers. Initially, we were only selling bean bags to a select set of customers based in Bangalore. We have grown slowly yet steadily to add new product lines in the online furniture space, as well as expand our reach across cities The special key features of our startup is that we have evolved over the years to become the one-stop destination for home décor requirements. We have 27,000 designers on board and are also in the process of rolling out new categories.
How are you different from the existing ones?
Our differentiation from our competitors is our proposition of providing end-to-end home décor solutions to the customers. We are not only focused on selling furniture online. Our belief is that a home is the most important investment and individual makes and we wish to be the ones customers rely on when they wish to design their homes.
Funding status and monetization model
We closed March 2016 with a gross merchandise value (GMV) of Rs 6 crores that translates into an annualised GMV run rate of around Rs 72 crore. We are targeting monthly GMV of Rs. 100 crore and a Rs. 1,200 crore turnover by the month of October. We raised $ 20 million from Askme in August 2015. We are looking to raise $100 million within the next six months. This money will help us expand our coverage area, hire more employees and test waters in countries like Malaysia and Kuwait.
We further believe that it is essential for companies to go hyperlocal as it translated into faster delivery at lower costs with lesser damages. We, at MebelKart have pioneered this trend and are moving from a 70:30 national: hyperlocal delivery model to a 80:20 hyperlocal: national model.
What are the challenges your startup faced while setting up the business? The best and worst memories...
We faced many challenges. Furniture as a product is not easy to market and even managing its logistics is not a simple affair. Other challenges are sourcing the product, designing the furniture and ensuring quality.
Building a business from scratch ensured many memories are created in a short time frame. One of my early memories is our first meeting with a vendor and when we asked him to sell a bean bag online, I still remember him refusing and he said “how can a bean bag be sold online?” We used to travel on our bikes making the rounds of vendors many of whom were unbelieving in our idea. There was also this dealer in Mumbai who made me wait, have 2-3 meetings and I went there again and again, even after all this we could not get him onboard.
One of our best memories is getting our first customer six days after going live in 2012, we ourselves delivered the product at HSR Layout to a customer who was himself starting a company of his own. Our first office was a single room which was also the warehouse. The three of us ourselves did the first 100 deliveries.
Market size and market opportunity
According to recent media reports and industry representatives, furniture is a 25 billion dollars business opportunity in India of which 10 billion dollars is just the modular kitchen market. Furniture marketplace is a largely unorganized sector with 85% of it being unorganized. Online furniture marketplace is in its nascent stage in India. It is only over the last 3-4 years with the entry of the first few major online players like Pepperfry, Urban Ladder and MebelKart that furniture is moving into the eCommerce space.
Our product portfolio is we have 2.5 Lakh SKUs live. We have 30,000 visitors a day on our website. We have recently launched the MebelKart app a week back and have more than 1000 downloads in this short period and a rating of 4.7 out of a possible 5.
What advice you want to give to the new entrants in this space?
I would advise the new entrants in this space to believe in their business idea irrespective of outside influences. The key here is to be always in tune with the market feedback. It is also important to get the business model right first and only then focus on scaling up your enterprise.
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