Growing population, increasing per capita income and better lifestyle have resulted in a desire to own a home. This further has aided in the growth of the home decor and interior designing sector. “When we started, the organised sector represented only about two-three percent of the market, with the rest dominated by unorganised players such as carpenters and contractors. Fast forward to 2023, and the organised sector now accounts for about 15% of the market. This shift towards organised options is driven by people looking for quality and convenience,” Kartikeya Bhandari, chief marketing officer, Livspace, told BrandWagon Online.
India’s interior design market generated a revenue of $ 22.21 billion in the current year, and it is further expected to witness a compound annual growth rate (CAGR) of 18% during the forecast period, according to business intelligence platform, Mordor Intelligence. According to the market intelligence firm, Livspace holds the second position in terms of market share in the interior design industry after Aamir & Hameeda.
The company’s revenue from operations rose 67.86% to Rs 470.62 crores in FY22 from Rs 280 crores in FY21, as per regulatory filings accessed by business intelligence platform, Tofler. While the net loss widened 61% to Rs 411 crore in FY22 from Rs 254.7 crore, during the same period, in the corresponding year. Interestingly, the company claims that its marketing expenditure ranges from 10-15% of its total revenue. “However, the spending varies from market to market. Around 65-70% of the advertising budget is allocated to digital channels,” Bhandari explained, adding that the cost of customer acquisition accounts for 10-15% of the revenue.
Further, it claims to follow a comprehensive assisted sales process as opposed to relying on just e-commerce models. Additionally, the company has offline stores in almost 40-45 cities besides being present in countries such as Singapore and Saudi Arabia. “The dual approach encompasses both a digital component and a physical presence. On the digital side, you might see an ad, visit our website, or discover us through SEO (search engine optimisation) efforts. Alternatively, you can directly visit one of our stores. Customers often want to physically interact with the product and experience it before purchasing. Thus, the physical presence through our experience centres is a crucial aspect of our business, allowing customers to explore the brand and the design process,” he added.
The real estate sector in India is expected to account for 12% to the country’s GDP by 2025.
Livspace claims to focus on customers either purchasing new homes or renovating homes. Its target consumers reside between the age group of 30-50 years old residing in metros and tier-3 cities. . “Our services cater to anyone with a residential property valued anywhere between Rs 50 lakh- 5 crore, be it an apartment, villa or bungalow. This range defines our target audience. Additionally, there is a noteworthy preference among individuals we term as knowledge migrants, those who have relocated to a new city and consider it their new home,” Bhandari said.
The company claims to have a broad range of products and offerings. Additionally, it sells starting from Rs 4 lakh to Rs 50 lakh. “The average selling price often falls around Rs 10-12 lakh. It’s essential to note that our solutions are customisable and made to order, tailored to meet specific requirements. This means that there isn’t a standardised range of products,” he added. The company claims that people tend to allocate approximately eight percent to 15% of their home’s value to develop interiors.
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