The super success of Furniture Rental start-ups in India

Gone are the days when consumers demanded a permanent ownership of products, goods and commodities. With the progress in design and style and considering the dynamic nature of trends, everything is desirable only for a small duration as long as it is not replaced by something newer and better. Nobody likes repetition and hence the service providers too had to adapt to the changing needs of consumers.

Furniture Start up Tips

Companies started coming up with services which allowed consumers to share the products which last for fixed, short periods. While Uber and Airbnb fall in this list, Dollar Shave Club presented another appealing idea which allowed people to set up subscription for razor so that they do not have to go through the hassle of order placement and can get the product delivered at their doorsteps. Similar practices are exercised by many other online cosmetics sites.

From easy subscription based buying the economy also moved on to providing products on rental basis, be it clothes, shoes, bags or anything else. The biggest advantage that this kind of market offers is that the consumer can own the products for a certain period of time at very low prices and return it back once the need is over. The owner puts the product back for sale after refurbishing it and that is how same thing can be sold multiple times for short term usage.

Though putting things on rental sounds cost-effective, easy and profitable yet one cannot deny the fact that all things have different storage and maintenance requirements. For example, maintenance and storage of vehicles is different from that of apparels and fashion accessories. That is how specifications for each one of them differ.

Moving on to furniture rental companies, according to Ajit Karimpana, the CEO and founder of Furlenco, “The market for rentals can be looked at like a scale.”  Furlenco is a Bangaluru based furniture and appliance rental start-up. Ajit further explains, “One end involves consumables like groceries and toothpaste, and the other end is things like airplanes, rockets, and houses. Things that are rented occupy the latter end of the scale. We’re trying to make furniture an option as one of these things.”

The fact that three out of the fifteen most heavily funded ecommerce startups in 2015 were in furnishing segment, says a lot about the potential of the industry in the market. Ajith asserts that it is the rental market which will have a better hold in long run in furniture industry and not the conventional way of ownership. Though all three above mentioned companies adhere to conventional way of buying and owning furniture, Ajith does seem to be making a point here. He substantiates his belief with a valid explanation saying, “When you look at the behavior of millennials, you see that they move around often. Furniture is an interesting market because the value of a piece is rarely known. Even if you do want to go the extra mile and spend money, selling your used furniture  will be difficult because it will essentially be a distressed buy. The value of furniture sinks the more you use it.”

Frulenco also offers the tempting idea of swapping a piece of the company’s furniture for a new style at any time. Definitely, users tend to get bored of things and wish to exchange them at affordable prices. But when it comes to heavy commodities like bed, cupboard or other furniture, the idea does not sound so practical. Yet Ajith voices the Frulenco idea and shows a great understanding of consumer behavior as he says, “Let’s say you get a single bed with a television set attached to the foot of it, you’ll have to change that bed once you get a girlfriend. Or, even if you get bored of it. The rental model makes this possible.”

Different Shades


Though the basics remain the same for both rental and e-commerce world from inventory, logistics, payments yet there is a slight difference between the two which comes from the difference in the nature of services. The inventory of rental has to be different considering that they depend on return, refurbish and reuse.

The “full stack” model which Frulenco follows is built on the need of housing its entire inventory which is distributed as per the requirement. It comes with its own challenges for instance there must always be enough space in a warehouse for returning furniture so that it can be installed and stored properly. Not only so, but in case of larger goods, it becomes a little difficult to estimate the number of copies to be maintained. Krishna Venjamuri of Lightbox Ventures explains, “In the case of a ‘full stack’ model, you control the quality of a product from end to end.”

While on the other hand in case of a “marketplace” model, a piece of furniture need not be with the seller as they can source it from the manufacturer as and when required. This problem is quite smartly managed by Flatfurnish which is a recently launched home furnishings rental startup. “The minute we receive an order, we reach out to a local manufacturer. We eventually want to make this a seamless flow where an order immediately reaches a vendor and he starts making it,” co-founder Jeetesh Agrawal explains. Flatfurnish prefers to pay in installments on a monthly basis for the furniture they purchase as it helps them to scale without making it capital intensive.

Yet there are some advantages which are exclusive to the “full-stack model” and which a marketplace model can’t achieve. Krishna explains how Furlenco makes the best use of this advantage for consumer satisfaction and quick furniture installation. “If someone wants their whole place furnished, Furlenco can do that within a few hours. We can provide a whole experience right from Furlenco’s warehouse. It is difficult for those who don’t own the full stack.”


Similar Strokes


Be it rental model or marketplace, both have their own challenges. Furniture requires rigorous human labor which makes rapid scaling tough. “At first, we did have supply chain problems,” Ajith admits. “We grew fifteen times in nine months unexpectedly, and this put a lot of pressure on vendors to generate that amount of furniture.”

Rental furniture has to be refurbished and deep-cleansed before it goes to a new customer so as to ensure buyer’s full satisfaction and quality services. The process does seem a bit challenging but it really depends on the handling operations of the company as Krishna tells that Furlenco deep cleanses each and every part from wood to fabric but they have never faced any time operation issues so far.

Both Flatfurnish and Furlenco have a minimum rental period i.e. four months for Flatfurnish and six months for Furlenco. This helps the companies to be sure of soft breakeven. Frulenco was launched in Bangaluru and started making profit after ten months. According to Ajith claimed that the company had better input than other popular conventional marketplace companies.

Though the renting of furniture is yet to receive appreciation and attention of consumers due to the stigma attached to the same, the “sharing economy” is definitely curbing many of these. Ajith shares that the aim of his company is to offer the ease of renting furniture to the consumers. As he explains: “Furniture rental was never an option when I moved to Bangalore or I would have done it. We want to make it a real, attractive possibility.”