NAME:-ROHAN PRAMOD WAGHE

PROGRAM: - M.COM

SPECILIAZATION: - BUSINESS MANAGEMENT

SEMESTER: - II

ROLL NUMBER:-FPMG013A

SUBJECT: - E - Commerce

TOPIC: - A Study on Business Model “URBANLADDER.COM”

(SIGNATURE OF STUDENT)
TOPIC: - A Study on Business Model “URBANLADDER.COM”
 INDEX

SR.NO TITLE PAGE

NO.
1 About Urban Ladder 4
2 Funding 6
3 Obstacles needs to be faced 7
4 Idea of urban ladder 9
5 Competitors 10
6 Business Model 11
7 i. Customer Segment 12
8 ii. Customer Relationships 12
9 iii. Channel 13
10 iv. Target Audience 13
11 v. Positions 14
12 vi. Revenue Stream 16
13 vii. Process 17
14 viii. Marketing Strategy of 18
Urban Ladder
15 Award and Recognition 18

16 Conclusion 20
About Urban Ladder

Urban Ladder is an all-around design business that offers home decor and

furnishings. Urban Ladder was founded as the first online brand in 2012 with more

than 5000 designs in 35 categories including living, dining, bedroom, study, and

design.

This blog highlights the business model of Urban Ladder, its customer segment,

income stream, market objective, and other elements of the company. First, let’s

get to know more information about the company.

Founded in February 2012 by IIM-Bangalore graduates Ashish Goel and Rajiv

Srivatsa, the company raised around $120 Mn from top venture capital funds such
as Sequoia Capital, SAIF Partners, Kalaari Capital, Ratan Tata’s VC fund, and a

hedge fund called Steadview Capital. The company closed its Series E round two

years ago but struggled to get funding after that. In November 2019, it managed to

raise INR 15 Cr although some of its existing investors did not participate in the

round.

In fact, the furniture e-retailer went through a sticky patch throughout 2019.

Several cracks started to appear in the firm’s business, including layoffs, and the

exit of its co-founder Rajiv Srivatsa. In October last year, just months before a

devastating pandemic swept the world, Srivatsa said in a press statement that his

eight-year journey with Urban Ladder would come to an end. His exit came a day

after Kalaari Capital’s Vani Kola resigned from the board of the company.

The financials and the change in post-money valuations over the years would

further explain the scenario. For any startup, surviving during the first year is the

hardest thing. When Urban Ladder was founded by Ashish Goel and Rajiv Srivatsa

in the year 2012, there was no clear platform for people who wanted to shop online

for furniture. When the two were renting flats next to one another in Bengaluru is

when they realized the pain of buying furniture online. After sleeping on the floor

for almost 15 months, Goel and Srivatsa realized what the internet lacked was the

ability to buy furniture online.

With an initial investment of $ 1 million from Kalaari Capital in May 2012, Urban

Ladder was launched. While the primary need was for aesthetically appealing

furniture, the secondary need was for affordable furniture. Realizing this gap, the

two founders used the first round of investment to strengthen their team, build their

customer service, and increase the kind of products available on their website.

“As a small team, we were more agile about our processes. Systems were quite

rudimentary too. We needed a solid front end experience so that customers could

get a good sense of the product and complete their payment. We took a call that

features like ‘My Account’, and more advanced features that are standard for most

ecommerce sites, were not initially prioritized,” says Rajiv.

Funding

Urban Ladder received its first funding from Kalaari Capital in May 2012. Kalaari

Capital invested 1 million dollars immediately after that Ashish and Rajive

launched their first venture in July 2012, Urbanladder.com.

Since then Urban Ladder has managed to raise 92 million dollars in the Series of 5

rounds from 8 different investors.

Series A: After initial funding of 1 million dollars from Kalaari Capital in 2012.

The company raised another 5 million dollars from SAIF Partners.

Series B: In this round Urban Ladder raised 21 million dollars from existing

investors Kalaari Capital and SAIF Partners and Steadview Capital.

Series C: Urban Ladder raised 50 million dollars in Series C round from existing

investors and some new investors like Ratan Tata, TR Capital, and Sequoia

Capital.

In the latest round of funding held in February 2017, they raised 1.02 billion

dollars from ABG Capital and other existing investors.

Obstacles needs to be faced

Inertia to Change: While many have taken to buying clothes/trinkets online most

people (even in cities) still are not convinced with the idea of buying furniture

online. There is the fear of damaged pieces, the difficulty of return, and the feeling

that the pictures are not accurate that inhibits them.

Ticket Size: Unlike clothes a table/cupboard cost above Rs10000/-. The ticket size

itself is a discouragement for people to purchase furniture online.

Local Vendors: Most cities have furniture market hubs (Like Kirti Nagar in Delhi)

that have a large variety and offer cheaper bargains. Many choose to flock to these

places instead of buying online.

Parallel Industry Focus: To run an online shop, the company has to acquire

expertise or partner with 3rd party vendors for successful/seamless operations. This

includes Delivery, online customer support/complaints, IT set up for site support,

Online Marketing, Social Media, Logistics for returns, etc. This is expensive and

requires heavy capital investments.

Urban Focus: Online Furniture concepts are flying in the urban setup, especially

where the corporate sector is booming like Mumbai, Bangalore, and Gurgaon.

However 2nd and 3rd tier cities where online shopping has become popular, this is

yet to completely break-in.

Price Sensitivity: Due to high overheads, online furniture companies have not been

able to pass on discounts to customers. There is almost a 10–15% gap between

online and shop price. India is an extremely price-sensitive market

Competition: Online Furniture is also now a crowded space with the likes of –

Pepper Fry, Urban Ladder, LivSpace, FabFurniture, Home Lane, Houseful, Durian,

Snapdeal, Flipkart, and many others joining in.

Experiential Buying: Setting up the house also is an experience that people like to

enjoy. This includes going shop to shop, exploring pieces that showcase Indian

craftsmanship, identifying unique & preferable single pieces. Online furniture

shops are providing furniture as a utility and are generally mass manufacturers.

Last a Lifetime (Investment): People in India continue to see furniture as

something that should last a lifetime. Hence there is a focus on solid wood,

minimum use of ply / fabricated wood. Buyers like to check and verify this before

investing in furniture.

Idea of Urban Ladder

While both the founders Ashish Goel and Rajiv Srivatsa were brainstorming over

all the potential ideas on which they can start their own business they decided to

move to Bangalore. After moving to Bangalore both their houses were without any

kind of furniture due to the lack of trusted furniture brands, online or offline. That

is when it stuck to them the need of a well-branded furniture marketplace in India.

Competitors
The top 10 competitors in Urban Ladder’s competitive set

are Pepperfry, Livspace, Wooden Street, Flipspaces Design Labs, Inc.,

HomeTown, Customfurnish.com, IKEA, Flipkart, Furniturewalla, Saraf Furniture.,

Afydecor, Live Sports 365 e-Retail Pvt.

“It took us one month to get the artwork right. Some websites which blindly

followed us ended up making ghosts,” laughs Ashish Goel, CEO and co-founder,

Urban Ladder Goel’s jeers underline the cut-throat competition in the online

furniture market where every small move by one player is forcing others to follow

suit.

The online furniture market got off the ground in January 2012 with the launch of

Pepperfry. About two months later, FabFurnish started and later, Urban Ladder

joined the fray. Over the past three years, Pepperfry and Urban Ladder have clearly

emerged as frontrunners in the race of seven players. Pepperfry has taken a clear

lead in terms of setting up its own logistics network and product catalogue. Urban

Ladder, though, has more funding and has clocked revenues that are almost twice

of Pepperfry’s revenues last year.

Urban Ladder boasts the highest funding among its peers. It has got some $78

million and a personal investment from Ratan Tata, Chairman Emeritus of Tata

Sons. In fact, the investment by Tata is seen as the biggest breakthrough for the

company. “It’s recognition of what we are doing,” says Goel. In comparison,

FabFurnish has been going slow with just about $30 million of funding available, a

tad better than Pepperfry’s $28 million.

Furniture is a long tail business. For instance, buying a mobile is different from a

sofa. Before making a purchase, the consumer is more or less sure about the phone

model (Apple iPhone or Samsung Galaxy S6) to buy.

Business Model
Urban Ladder has both online and offline business model for distribution. The

company delivers and installs all the products it offers. The brand has also put its

products on marketplaces Amazon and Flipkart.

Urban Ladder is continually creating and launching new collections like the

Malabar, the Eleanor & Louise, and the Fujiwara range. Urban Ladder launched

design consultation as a service in 2016.Apart from its in-house collections and

consultations, Urban Ladder works with external designers. The Urban Ladder
Design Network provides external designers with 3D rendered models of its

products. The partnered designers also get priority inventory blocking on Urban

Ladder’s products and a commission when their clients select Urban Ladder’s

designs for their homes. Currently, Urban Ladder has over 600 design firms

working with them as part of The Urban Ladder Design Network, with the tribe

increasing every month. The furniture exchange offer is provided by Urban

Ladder’s partners Zero and Quikr. The old furniture will be picked up, and the new

piece delivered to the customer at no additional cost.

1. Customer Segment

Concentrated on clients who are prepared to pay an insurance premium for

functionality and product quality.

2. Customer Relationship

Concentrate on creating long-term partnerships with an emphasis on sharing user

history and simplify the choice of a consumer.

3. Channel

 Video on YouTube showing product and functionality

 Users stories post on the website

 Social Media

4. Target Audience

Anyone who purchases the property for Rs. 40-50 lakh goes to the furniture for Rs.

4-5 lakh, including cooking utensils. This is our customer target. Anyone who

purchased the house several years ago in the renovation cycle may be interested in

rebuilding a room or multiple rooms as they are boring. That’s a large second

spectator. Anyone in the top 30 of the cities who’s presumably married but haven’t

yet acquired a house where they want some part of their house is also one large

third audience. These three are the audience spanning the entire audience. The

number of buyers is increasing impressively throughout the festive and wedding

season, as the period is when people want to redecorate and buy furniture.
Demographic clients that purchase online and are used to shopping online are well-

read, educated, and well earning between the ages of 23-45. Psychographic clients

acquire material, including lifestyle purchases from Myntra, Jabong, or others,

with a sense of design, knowledge of society, and active, digital. Compartmental

clients are ready to buy large-scale products at a single click and find it much

easier to shop online because it ensures that they check the furniture in their home

environments for themselves.

5. Position

In the next several days you want to be a complete provider of home solutions.

You desire to increase your decoration portfolio by becoming a one-stop household

equipment provider from an online mall Urban Ladder has only lately gotten on
TV to establish itself, but its initial attempts were geared towards broad-based

demography. Organic growth, together with promotion for social media and

positive word-of-mouth, is plenty for founders.

6. Revenue Stream

Despite the stalling of Covid-19, the transaction market is full of headlines. The

newest newspaper is the purchase of the Urban Ladder Home Decor Solutions

situated in Bengaluru. A cash purchase of 96 per cent, which is a little amount of

approximately $25.5 million, was announce able by Reliance Retail Venture Ltd

(RRVL), a subsidiary of Reality Industry Ltd (RIL) on 14 November (INR 182.12

Cr). The RIL can also purchase the remaining stake for another INR 75 Cr until

December 2023.
7. Process

Mainly through the web platform, clients observe a wide selection of items and

have the possibility of testing various features. The majority of the interactions

take place. The products are exhibited in terms of quality and materials used to

make such furniture in Urban Ladder’s store. The platform functions as a stopping

point for linking different consumers to producers and allows them to explore a

broad range of items with a wide range of possibilities. Upon placing an order the

user orders Urban Ladder to send the merchandise. There is also an opportunity to

return the product for better service if the user does not satisfy them.
8. Marketing Strategy of Urban Ladder

Urban Ladder is one of the most active social media users in promoting its

products to those who want to acquire products and resources online. They have

taken the best potential advantage of the platform to advance their portal. Although

to a lesser degree, other forms of promotional publicity will also be utilized.

As far as promotion is concerned, Urban Ladder is most active in allowing clients

to check out sofas at home before buying them online. The promotion was unique

and no other portal attempted it. This is a unique sort of promotion. The company

is also one of the best digital enterprises in the country, and the founders of the

company played a vital role in designing the digital marketing strategy of the

online platform.

Urban Ladder focuses largely on offering its customers great products in a unique

way using website visualization. One of the key factors of the success of the
company could be its staff. The founders, the management team, employees, and

the distribution network of the company have all worked hard to improve customer

service. When founders found furnishings for their office, they developed the idea

of developing an internet platform for the sale of furnishings and home decoration.

Awards and Recognition:

Urban Ladder has won several national and international awards since its inception

few of those awards are.

 Best Digital Startup in India by IAMAI .Ashish and Rajiv has been featured

in Fortune’s 40 under 40 for three consecutive years (2014 – 2016) and a

part of GQ’s 50 most influential young Indians in 2015. Top 10 dream

companies for Fresher’s by HRWorkplace Survey 2016 .In-book Winner:

Direct Response – Digital for Mattress Tester at the Kyoorius Creative

Awards, 2017. In-book Winner: Use of Social Media for Mattress Tester at

the Kyoorius Creative Awards, 2017

Conclusion

Urban Ladder is a multi-channel designed mechanism and a company for house

decoration. There are almost 5,000 styles, including living, dining, bedroom, study,

and more, in 35 different categories. Urban Ladder decided to spend substantially

on technology after raising $77 million in funding, which was considered as one of

the main drivers of growth. Spree has proved to be the ideal alternative thanks to

its flexibility, scalability, and reliability. The digital presence of the new invention

of Urban Ladder can now be communicated to the public. You reached your clients

and end-users via several digital sites, including Facebook, Twitter, Pinterest,

Instagram, and LinkedIn. They have created a marketplace for themself.

. This Bangalore-based firm owns end-to-end operations, which means they have

complete control over everything from wood selection to furniture design to

delivery. Furniture, lifestyle, and home decor are all available from Urban Ladder.

Urban Ladder is a one-stop store for all your furniture needs.

In 2012, Ashish Goel and Rajiv Srivatsa established Urban Ladder. Before

launching their own business, they both worked for several global corporations.

Previously, Ashish Goel worked for McKinsey & Company and was the CEO of

Amar Chitra Katha. Rajiv Srivatsa previously worked for Yahoo and Cognizant.
While the founders, Ashish Goel and Rajiv Srivatsa, were pondering all of the

possible company concepts, they decided to go to Bangalore. Due to a shortage of

renowned furniture companies, both online and offline, neither of their houses had

any furniture when they moved to Bangalore. That’s when the requirement for a

well-branded Indian furniture marketplace became apparent to them.

Business Model of Urban Ladder

Urban Ladder works on the e-commerce channel on a very simple but innovative

business strategy, which lets users choose the home décor and furnishing products

to their needs. The furniture is provided and the goods are installed according to

the order detail. A new procedure of sofa testing in customer homes, the first in the

industry, has recently commenced. It shows you do not hesitate to take the extra

mile to give the customer the best value. By their choices and taste, the buyer may

choose furniture and other things. Laying and installation are uniquely offering its

customers great products using uniquely offering its customers great products free

of charge. It is a complete solution provider and hence all they do is to install the

product at the customer’s premises from wood purchase on-site.