Online furniture and home décor marketplace Pepperfry, which hit the 3-million shipment milestone last month, is widening its net to lure a new set of customers who choose to rent furniture instead of buying it.
After studying the operating model of furniture rental firms such as Furlenco, RentoMojo, FlatFurnish, Rentickle and Cityfurnish, Pepperfry has come up with a bouquet of EMI-tenure offers as low as Rs. 811, payable for 12 months, or Rs. 435 for 24 months, which are applicable on an order of Rs. 3,000 and above.
“At Pepperfry, customers can buy furniture at the cost of a pizza,” founder and COO Ashish Shah told.
“My proposition to the mobile generation who seldom stay anywhere for over 12-18 months is, why rent used furniture when you can own brand-new furniture by paying attractive EMIs, at the cost of a pizza, minus the upfront deposit that has to be paid to rent it.” Unlike horizontal e-commerce firms such as Amazon, Flipkart and Snapdeal, niche furniture e-tailers such as Pepperfry, Urban Ladder, FabFurnish and Mebelkart enjoy margins of 45-50 per cent.
However, they now have to compete for the consumer wallet-share with a growing number of online furniture rental start-ups, 13 of which were founded in 2015 alone.
Start-up tracking firm Tracxn pegs the number of furniture rental companies in the country at 18, which have collectively raised $8.25 million in funding.
The proposition of these start-ups to customers is: why spend heavily on furniture when they may not have any use for it a few months down the line.
Geetansh Bamania, founder and CEO, RentoMojo, said: “On average, the rental difference between a furnished and an unfurnished apartment across major metros in India ranges Rs. 6,000- Rs. 9,000 a month. This additional expense can be mitigated by renting furnishing essentials at approximately half the cost from RentoMojo.”
According to details available on online furniture rental websites, the cost of rentals for a bedroom and living room is between Rs. 900 and Rs. 1,200 a month and is usually payable in 3-12 months along with an upfront payment of a 2-month refundable deposit.
Shah says Pepperfry offers 3-24 months EMI-tenure options.
“We have partnered with Axis Bank, Citibank, HDFC Bank, HSBC, ICICI Bank, IndusInd, Kotak, SBI and Standard Chartered Bank to offer these EMI tenures at interest rates ranging from 12-15 per cent depending on the tenure.”
The Indian furniture market is pegged at Rs. 65,000-70,000 crore. Of this, the organised market constitutes 10-15 per cent. Annual online furniture sales hovers between Rs. 1,500-2,000 crore (2-3 per cent of the overall furniture market).
Source: Business Line
