Earlier this month, , the home decor startup, announced it would be opening over 150 experience stores in the next 18 months. It said it would be investing $50 million across 80 markets - 60 new market entries across India, and 20 Asia Pacific cities.
Livspace currently serves Singapore as well as thirteen cities in India - Bengaluru, Delhi, Noida, Gurgaon, Mumbai, Thane, Pune, Hyderabad, Ahmedabad, Calcutta, Kochi, Jaipur and Chennai.
The company has raised over $200 million in capital from some of the top global investors including Ingka Ventures (IKEA), TPG Growth, Goldman Sachs, Kharis Capital, Venturi Partners, FFP (Peugeot Group’s Holding Company), EDBI, Bessemer Venture Partners, Jungle Ventures, Helion Ventures, and UC-RNT.
In an exclusive conversation with YourStory, Co-founder Ramakant Sharma speaks about the company’s expansion plans in APAC, GCC, and Australia by 2022.
Ramakant Sharma, Co-founder and COO, Livspace
Edited excerpts from the interaction:
YourStory (YS): Tell us about the global expansion plans, and your Singapore office. What regions are you looking at and why?
Ramakant Sharma (RK): We are aggressively scaling up our business in India while also planning to strategically expand our presence across the globe.
We launched in Singapore in 2019 and became the market leader within 15 months of the launch. Our Singapore business is growing significantly at 10 percent per month, which contributes to about 20 percent of our overall business.
With Singapore as our headquarters for global expansion, we are exploring new markets in APAC, GCC and Australia in 2022.
YS: What markets are you keen on immediately, and how do you intend to penetrate deeper into those?
RK: We have built an innovative technology platform and a business model that enables us to launch any home-related offering in any geography and then scale it quickly. We are looking at capturing new markets both in India and overseas, with a special focus on expanding our presence in Tier II cities in India.
Our plans over the next 18-24 months include:
- Investing in increasing brand awareness in new markets in both India and Asia Pacific (we are the largest and most trusted brand in the industry)
- Dominating Singapore, which is our Asia Pacific headquarters, and expansion across new geographies in the region
- Continuing to be the #1 modular interiors solution across different offerings such as MDF, space-saving, custom, stainless steel, eco-friendly kitchens, wardrobes and storage solutions
YS: What is the $50 million for, and key aims of the investment?
RK: With this investment, we plan to accelerate our growth and enter over 80 markets, including 60 new market entries across India and 20 Asia Pacific cities.
We aim to penetrate and capture smaller Tier II markets in India and further invest in growing our teams, both in India and overseas.
YS: What is the focus of the new designers going to be on? And what are you looking to scale in?
RK: We plan to onboard over 1000 new design entrepreneurs across the country. This is in line with the brand’s aim to build a community of designers who are enabled by Livspace’s tech platform.
While a design partner will pitch, design and manage the execution of their projects, Livspace provides all the backend support through access to its proprietary online tools, vast catalogue of furniture, decor, products and services and the immense network of community managers, vendor managers, category managers and service partners.
The support empowers design partners to not just choose their work hours, but also choose to work on more projects. Building on the success of the Livpreneur programme - India’s biggest community of freelance designers turned entrepreneurs - Livspace is now investing in building a stronger ecosystem, helping its design partners do more business while also increasing penetration in newer regions.
YS: Why look at experience centres now? When most things are digital and everyone is making things work digitally?
RK: We are an omnichannel home interiors and renovation platform and Experience Centers have been at the core of our offering. We have delivered the Livspace assured experience to over 30,000 customers across our current markets.
While the journey on Livspace begins virtually, our ECs play a pivotal role in the entire journey by allowing the customers to evaluate different options in person as well. Our Experience Centres (ECs) have played a key role in delivering this experience for the entire consumer journey.
Customers can get inspired; experience design, finishes and modular solutions; better understand our delivery and installation processes; and of course, have design discussions with our teams.
Our offline stores have received a phenomenal response in every market we have forayed into, and this gives us utmost optimism. ECs and small format stores have emerged as key consumer touchpoints, helping Livspace solve for access in the non-metros. We plan to deliver the best omnichannel experience to our customers. Essentially, be where our customers are - be it offline or online.
YS: How has the pandemic transformed the business and home decor sector at large? What has Livspace learnt and the key insights?
RK: Despite the continuing disruptions, Livspace has brought together a highly fragmented home interiors market in India. Interestingly, the pandemic accelerated certain trends which have catapulted businesses like Livspace.
Despite the initial uncertainty owing to the pandemic, Livspace has witnessed 1.8X growth compared to pre-Covid times.
These three significant trends have benefited the brand over the last year:
Increased time spent at home
The pandemic led people to spend more time at home. Hence, homeowners have been re-evaluating their home space and have chosen to renovate their homes to accommodate new needs
Deeper digital adoption
There has been a substantial shift in consumer behaviour. Customers are now more open to virtual collaborations with their designers on video calls, visualising their homes in 3D and selecting materials through the industry’s first ecommerce-like material listings. In fact, two out of three new orders first originate through virtual collaboration.
Increased demand of the organised sector and in trusted, reputed brands
There has been a consistent increase in the demand for digital-first organised brands, such as Livspace. Owing to this, we have consolidated our leadership position with a market share of over 65 percent. Our profits, too, have gone up and India operations have turned EBITDA profitable in March 2021. To ensure customer safety, we have put together stringent guidelines in place - be it at our ECs or while delivering completed homes. We implement temperature checks for everyone and strict use of masks, gloves and sanitisers. We encourage contactless and safe design meetings.
YS: How has technology enabled your growth?
RK: Home renovation is a high-involvement, high-ticket and infrequent purchase. The industry is traditionally fragmented, with thousands of design studios, brands, OEMs and general contractors, who cannot provide a scalable solution.
Our tech-enabled platform has actively worked to organise the industry, enabling an ecommerce-like trusted and predictable experience. It has created a scalable omnichannel experience that has been successfully extended across markets.
Key innovations that are unique to Livspace and which help us stay ahead of similar players in the market:
- A robust three-sided managed marketplace model that connects homeowners, certified designers and vendors/suppliers (furniture, modular, decor, services, etc) to enable home design and renovation needs. This unique approach delivers superior economics, better efficiencies, and higher transparency.
- We created Canvas, the only end-to-end platform for the home interiors and renovation ecosystem which provides design creation, automatic shopping cart, 2D/3D visualisation tools connected to a store with over 4.5M SKUs and design-to-fulfilment integration.
Our supply chain includes:
- This region’s top modular furniture - kitchens, wardrobes, etc - contract manufacturing supply chain with automated procurement and optimised packing workflows
- Hundreds of brands and over 4.5 million SKUs across categories
We aim to build an ecosystem of over 12,000 home improvement professionals in India and Southeast Asia.
As the market evolves, we see a steady shift towards digital brands as they offer transparency to customers in important aspects like pricing, designs, modular solutions. That is our value proposition, and we aim to consolidate this fragmented market across knowledge cities of the world.
YS: Do you have any fundraising plans?
RK: Livspace is funded by a gamut of top tier investors in the world and has a deep and diverse cap table. The brand raised $90 million in September 2020. After the India operations broke even earlier this year, we are expecting a company break even in the next 15 months. Like any other startup, funding conversations are an always-on process.
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Edited by Anju Narayanan
Link : https://yourstory.com/2021/09/ys-exclusive-livspace-looks-at-australia-gcc-apac-market-expansion-2022-startup
Author :- Sindhu Kashyaap ( )
September 27, 2021 at 06:45AM
YourStory