Cloudion Homes: Revolutionizing Furniture ‘Business’ in India
Indian furniture market, with a value of INR140,000 crore, is dominated by unorganized sector with 80% of total Indian furniture market. The organized furniture market consists of both offline and online retailers. The offline furniture retailers include Godrej Interio, Durian, Hometown, eHome, Damro, Wipro, Homeshop, Usha Lexus, etc. With the advent of internet and increasing penetration of e-commerce, online furniture retailing – both from horizontal players like Flipkart, Amazon, Shopclues, eBay, Snapdeal, etc. and from vertical players like Urban Ladder, FabFurnish, Pepperfry, Housefull, MebelKart, etc. – has been witnessing considerable growth rates and is expected to grow at a CAGR of 75% and reach $700 million by 2020. There is an immense competition amongst online furniture retailers and between offline and online furniture retailers. This Case Frame provides scope to understand and analyze the Indian furniture retail market.
Amidst such competition, Cloudion Homes (through its retail venture EDIY) enters Indian furniture market with seemingly disruptive customer-business proposition. What is Cloudion Homes’ (Cloudion) Business Model? What are the distinguishing features of this model? Does it have the power to disrupt Indian furniture market? What are the challenges to this model? This Case Frame also provides scope to analyze if Cloudion’s business model can revolutionize Indian furniture market.
Prerequisite Conceptual Understanding
As a part of this Case Frame’s classroom analysis, the following exercise is suggested to enable an effective discussion and analysis of this Case Frame:
- • Students/participants must visit www.cloudionhomes.com and www.ediy.in to understand the unique customer value proposition, its operating, business and revenue models, and how customer has been collaborated with to create value
- • Visit any of the online furniture retailers’ sites – Urban Ladder, Pepperfry, FabFurnish, etc. – to have an overview of product profile, delivery models, etc.
Case Positioning and Setting
This Case Frame can be used for either of the following Programs/Courses/Modules:
- • MBA Program – eCommerce Course – Online Furniture Retailing Formats – To understand the two different online furniture retail formats (Horizontal vs Vertical), the value chain implications thereof and the challenges in each of these two models
- • MBA Program – eCommerce Course – Business Models – To examine and discuss the prevalent business models in Indian online furniture retailing – The Marketplace Model vs In-House Model, and debate on the organizational implications of these two models and also to understand Cloudion’s business model
- • MBA Program – Strategy Course – Business Models – To analyze Cloudion’s business model and examine its ability to disrupt the Indian furniture market’s retailing landscape
Preamble to this Case Frame’s classroom analysis
This Case Frame is meant to analyze the business landscape of Indian furniture retail market, offline vs online furniture retailers, and Cloudion’s business and revenue model. The sequencing of questions – organized through the three sections given in the Case Frame – is meant for this purpose. However, as can be seen, the questions related to the advertisement appear in the last section as a sufficient understanding of the basics of Indian furniture retail market (both online and offline) is necessary to address the questions related to the advertisement given in the last section. Accordingly, the Case Frame was orchestrated [Exhibit (TN)-I]....................