Our vision is to design every home in India, says Mebelkart CEO, Rahul Agrawal

It was tough to survive the stiff competition in the online furniture market for Mebelkart Technologies Pvt Ltd, but its founder and CEO Rahul Agrawal stood firm, not flinching even when tempting acquisition and funding offers came his way. Now that he has found a partner in Ask Me, Mebelkart is all set to scale up and fight back, Agrawal tells Praveena Sharma.

ately, we have seen a spurt in online furniture stores. How are you differentiating yourself?
Unlike other furniture portals, we are a total home solutions provider and a local market place for furniture. This means that we don't believe in the concept of shipping furniture nationally. So, when you come to our portal, we ask you your area, and based on your feed we filter out furniture. This helps us deliver the furniture a lot faster and at a lower cost. Generally, there is a 9% damage cost and a 20% cost of shipping in furniture business. We have brought down damage expenses to a sub-1% and logistics cost to about 3%. This way, we are able to give a lot better pricing to the customers without taking a big hit on our margins. We also provide interior designing services through our portal. We have already launched this service in Bangalore with 600 interior designers and will take it pan-India within a few months.

Interior designing requires personal interaction with clients and stringent cost and timeline management for execution of the design. How will you achieve this online?
We are collaborating with around 30,000 interior designers all over India and telling them to give us the design. Our manufacturers will put a price tag on every design. This is how we will retail millions of designs to people in India. The designer gets to display his or her design on our portal. When we get order, we pay the designers and the factory. The gross margins are huge in this category – currently at 35-40%. We have got Twinkle Khanna (former actor, author and interior designer) as brand ambassador. Our vision is to give a design to every home in the country and to be able to put a price tag on that. This is how it will work. You go to our website and hire a designer at no cost. They will come to your place, take measurements of your apartment and work with you on the house plan. After this, they will submit the designs to us. We will put a price tag on it and then you can go ahead with the project. We are promising to complete the project in 45 days or we pay the client a month's rent. There is a lot of cost saving that will come to clients through this. Since we source the furniture from factories, we will be able to procure materials at a lot better rate than individual designers. The interior design market in India is estimated to be worth $10 billion. An average Indian spends Rs 5-7.5 lakh on a home – to model a kitchen, wardrobe or furniture. We want to be an organised player in this market by roping in interior designers and factory suppliers to give a cohesive solution to the users.

How did you start and grow your business?
We (three partners) started two and a half years back after quitting our jobs. We began with bean bags and chairs, which got us very good response and gave us decent profits. Then, we ran into hard times. Whatever money we had earned, we put it right back in the business. There were times when I had to take tuition in the night to keep the venture going. Then, we decided to focus on local – for sourcing and delivering of furniture – to get cost advantage. This is what made us survive during the tough times against the giants (like Urban Ladder, Pepperfry and others). We also did technologically correct things and more efficiently. Then, we got an acquisition offer from one of our competitors, which we declined. During this period, we also got a huge funding offer from a big Indian company, but their vision did not align with ours. So we turned down their offer too. We felt our vision was technically much better and we were more aggressive than them. Since we were not getting the right funding partner and we were in dire need of it, we raised $3-4 million through 35 angel investors and kept our business going. We then had a talk with Astro Malaysia and Ask Me group for funding. Ask Me, which is ex-yellow pages, is well connected with interior designers, furniture factories and carpenters. So strategically, they made sense to us. Since we have closed our financing deal (August 15) with them, our sales has seen a steep growth. It has grown more than 20 times.

What are your future and scaling up plans?
Currently, we have two lakh products from over 1000-plus suppliers across India on our online store. We want to scale this up to 3000 suppliers and a million products in the next 2-3 months. We will also soon launch a mobile app Funterior, which will help users visualise how a furniture will look in the setting of their home. Our next-day delivery service will also go live in 70 cities next month. Most of our competitors ship a product in five days. We will be using Ask Me's infrastructure for this. We now want to scale up fast. Using analytics, we are predicting demand and scaling up, and will eventually improve our profitability. We are operationally profitable but since we are in expansion mode, we have yet to become profitable at the company level.