New Business Segments and Approach for Urban

Ladder
VIMAL GARG
Bangalore, 26th July 2015

CE v7.0

Summary
New
New Business
Business Segments
Segments
Assuming
Assuming that
that the
the focus
focus for
for the
the company
company is
is on
on more
more than
than top
top line
line than
than profits,
profits, creating
creating high
high value
value business
business segments
segments is
is
the
the key
key
Current
Current target
target segment
segment of
of the
the company
company is
is upper
upper middle
middle class/affluent
class/affluent urban
urban households
households who
who need
need differentiated
differentiated
products,
products, superior
superior customer
customer service
service
Modular
Modular kitchen
kitchen and
and flooring
flooring can
can be
be new
new business
business segments
segments targeted
targeted at
at existing
existing customer
customer segment
segment
Both
Both categories
categories are
are largely
largely unorganized
unorganized and
and hence
hence aa need
need of
of professionalism
professionalism and
and unique
unique designs
designs with
with superior
superior buying
buying
and
and purchase
purchase experience
experience is
is aa potential
potential need
need
Paying
Paying capacity
capacity for
for right
right product
product &
& service
service exists,
exists, hence
hence market
market provides
provides exciting
exciting opportunities
opportunities
Major
Major business
business segment
segment excluded
excluded from
from entry
entry is
is Bathroom
Bathroom segment
segment which
which is
is attracts
attracts competition
competition from
from established
established
players
players such
such as
as kohler,
kohler, cera,
cera, jaguar
jaguar etc.
etc. and
and provides
provides limited
limited product
product designs
designs opportunities
opportunities

Entry
Entry Model
Model &
& Strategy
Strategy
Create
Create sub-brand
sub-brand under
under Urban
Urban Ladder
Ladder for
for bundled
bundled product
product and
and service
service offerings
offerings
Since
Since these
these offerings
offerings will
will requires
requires great
great impetus
impetus on
on installation
installation and
and after
after sales
sales service,
service, differentiated
differentiated branded
branded strategy
strategy is
is
required
required
Both
Both segments
segments allows
allows leveraging
leveraging of
of internal
internal synergies
synergies and
and building
building common
common capabilities
capabilities such
such as
as superior
superior material
material
procurement,
wood
processing
and
customization,
building
team
of
installation
professionals
procurement, wood processing and customization, building team of installation professionals
Both
Both segments
segments can
can be
be developed
developed in-house
in-house without
without much
much significant
significant additional
additional investment
investment
Suggested
Suggested model
model of
of inbound
inbound logistics
logistics is
is complete
complete in-house
in-house solution
solution which
which would
would require
require one
one time
time investments
investments but
but also
also
allowing
benefits
to
existing
categories,
better
margins,
improved
quality
control,
delivery
efficiency
and
customer
allowing benefits to existing categories, better margins, improved quality control, delivery efficiency and customer
satisfaction
satisfaction
Outbound
Outbound logistics
logistics will
will require
require investments
investments in
in de-centralized
de-centralized infrastructure
infrastructure and
and team,
team, most
most of
of which
which will
will further
further
strengthen
strengthen current
current logistics
logistics capabilities
capabilities
Technology
Technology should
should be
be leveraged
leveraged to
to provide
provide customization
customization and
and at-home
at-home shopping
shopping experience
experience to
to customers
customers
2

Objective for Urban Ladder is to become Indias largest online destination for home
furnishing by providing distinctive products and superior customer experience

Key aspects
Market Scenario

Implications for Urban Ladder

Business Objectives

Indian furnishing market is $20bn market with

home furnishing being 65% of it. Only 10-15%
market of which is organized
Online home furnishing market expected to
grow at healthy rate of 30-40%
Private label and furniture is a high margin
category
Increasing customers are looking at one stop
solution for home products
As repeat purchases increase need for
targeting same set of customers increases
Important for Urban Ladder to gain significant
market share in other categories as the space
will get increasingly competitive going forward
Venture into new business segments by
providing value added solutions to existing
target segment
Quickly expand wide and deep for lower
customer attrition
Develop sub-brands as pilot projects to test
will it work?

Need to venture
into new
business
segments and
categories for
next level
revenue growth
Maintain the
same standards
of product
quality and
customer
experience

Going Wide in Kitchen and Wooden Flooring can be attractive opportunities within
existing target segment
Living

Fur
nitu
re

Sofas
Chairs
Tables
Storage

Oth
ers

Decor
Lighting
Rugs
Mirrors
Shelves &
Windows
Curtains

Dining
Dining sets
Chairs
Tables
Storage
Bar Units

Dinner
Ware

Bedroom

Beds
Storage &
Accessories

Decor
Mattresses
Pillows

Kids
Beds
Tables &
Chairs
Storage
Swings
Cribs etc.
Decor
Lighting
Mattresses
Rugs

Outdoor&
Home office

Bathroom

Study table,
chairs
Outdoor sets
Gazebo
Decor
Lighting
Umbrellas,
Grills
Garden
Accessories

Kitchen

Kitchen Islands,
trolley, tables,
rack etc.

Geysers
Grooming
Appliances
Mirrors
Bath Accessories

Storage
Cookware
Appliances

Ho

2 me

imp
rove
men
t
End
End
solu
tion
s

Flooring

Bathroom fixtures &

fittings
Sanitary ware
Flooring & Tiles

Flooring

Kitchen Fixtures

Living Room
projects

Dining
room
projects

Bedroom
projects

First line of growth target segments going wide approach

Second line of growth segment - build design capabilities

Kids room
projects

Bathroom solutions

Modular kitchen
Kitchen remodelling

Excluded from current focus as they should be a part of growing

existing categories, bathroom segment is highly competitive and
currently un-related to operational synergies
4

Modular kitchen and flooring are largely still unorganized and there is a need for high
quality, attractive designs and superior customer service at affordable prices
End to End Solutions

Home Improvement

Modular Kitchens

Flooring Hardwood, Laminate, Vinyl

Flooring market in India has evolved from ceramic
and stone to wood.
Market is growing at 30-35%
Market is largely un-organized (70-75%)

Overall Market

Modular kitchen is $1bn market in India

Market is largely unorganized (70-75%) provided
by carpenters making custom designs as per
requirements of households

Competition

Godrej, Sleek, Glima etc. including few

international companies

Alternate options such as Marble, granite and ceramic

etc. and few international & domestic brands such as
Strore 772, Tarkett etc.

Expected # of Projects

Total $80mn household in India

5% target segment ~4mn households
10% new/replacements = 0.4mn
Organized Industry~25%= 0.1mn

Total $80mn household in India

5% target segment ~4mn households
5% new/replacements = 0.2mn
Organized Industry~25%= 0.05mn

Average Ticket size

Rs. 2 ~5 lakh

Rs. 500-800 per sqft /1000 sqft = 5lakh ~ 8lakh

Urban Ladder opportunity

5% market share in first year

5000 * 3lakh = 150cr

5% market share in first year

2500 * 6 lakh = 150cr

Customer Proposition

Providing solutions of functional practicality,

design and appeal
Effective space management
Provide warranties and easy replacement

Provide easy and professional installation options

Quality, designs and convenience is a big concern
Variety of options, styles and upgrades offered
Unique proposition of allowing customers to shop
flooring online matching their current scheme
Provide warranties and floor care education

Create Sub-Brands under Urban Ladder to provide differentiated and dedicated marketing
& promotion capability and awareness among construction industry professionals
End to End Solutions

Home Improvement

Modular Kitchens

Flooring

Entry Strategy

Launch a sub-brand under Urban ladder providing

differentiated solutions with superior design and
quality
Tie up with architects, builders and interior
designers and housing companies

Launch a sub-brand under Urban ladder

providing flooring options under hardwood,
laminate and Vinyl
Target selected first set of customers and create
pull for the product - low inventory and operating
costs
Tie up with architects, builders and interior
designers and housing companies

Target Segment for

Urban Ladder

Tier 1 and Tier 2 cities

Upper Middles class/Affluent

Tier 1 and Tier 2 cities

Upper Middles class/Affluent

Challenges

High prices and low replacement demand

Investments in high quality and speedy installation

process

Technology

Mobile app for customizing kitchen as per needs and

quotes

Mobile app for in home measurement and quotes

Inbound logistics

Invest in manufacturing services for creating high

quality customized finished products

Channelize bulk sourcing from domestic and

international players

Outbound Logistics

Invest in high quality installation services

Invest in high quality installation services

After Sales

Provide reliable warranty, replacement and service

options

Provide education on surface care and treatment

Urban Ladder strategy should be based on product differentiation and superior end to
end customer service
Differentiation Pillars

Best product design and quality

Key Recommendations
Provide shop at home solutions, demo services
Differentiated designs and options in product

Superior and reliable customer service is the key

Customer service

3
Brand Awareness

Both modular kitchen and flooring requires extremely professional

service which is quick, neat and efficient
Temper the power of the immediate customer by appealing directly
to the end customer
Create brand awareness and pull for product

4
Customization

Shoppers are more informed and sophisticated and more

demanding in terms of customization
Offer unique combinations of products designs and solutions

Marketing

Tie-ups with housing, architects and builders, promote flooring and

modular kitchens
Appeal to the customer needs aesthetics, hassle free, great
service
7

THANK YOU!

CE v7.0