Online home store Fab Furnish is scouting India's $20-billion furniture market for small-time entrepreneurs who will be mentored to sell on its platform, as it shifts focus to the marketplace model. The Delhi-based e-tailer, which expects revenues to grow five-fold to R200 crore this year, currently relies on an inventory-led model.
Born in 2012, the two-year-old e-tailer is nurturing around 10 furniture entrepreneurs and will help them reach out to a wider audience through its portal. More such entrepreneurs will be absorbed as Fab Furnish gains scale and encourages to sell on its portal — it plans to generate 70% of its revenues from the marketplace model in the next two years.
“At present, we generate 70% of the revenue through the inventory model. In the next two years, we expect 70% of the revenue to come through the marketplace and the rest through inventory,” said Fab Furnish co-founder Vikram Chopra.
The e-tailer has already invested R10 crore in some promising businesses, and the amount will double in the coming year. It has constituted a four-member team to scout for entrepreneurs with unique offerings in the furniture space and groom them to retail online, besides providing them with initial funds and lenient payment terms.
“We are trying to launch differentiated products. Since we are promoting these new brands, we want to get into long-term exclusive relations with them, where they launch new products only with us. We let them focus on developing unique products which while we can focus on retailing,” said Chopra.
Chopra, however, admitted that more attention to the marketplace model will also help Fab Furnish reduce costs. “It's cost-effective because if you don't have to store inventory, you are saving on warehousing. We don't have to worry about liquidation expenses if we are not able to sell the products. By cutting down on warehousing alone, we could save 5% of overall costs,” Chopra added.