Read in Mint today that Livspace is planning to go public in next 18 months.
Though the company has managed to cut losses substantially, its revenue growth has slowed.
Home interiors is not an easy business 😅
Given the high ticket size, long timelines to execute the projects and number of decisions / variables involved- there’s a high chance that there’s an expectations mismatch and disappointment on customers end.
This is reflected in the negative reviews that you can read for most players in this category
Livspace currently has a presence in 65 cities with 105 stores and plans to hit 250 cities in the next two-three years. So, there’s enough runway for future growth of the core business.
But it’s not going to be easy.
As one of the experts pointed out in the article- maintaining quality and service consistency across diverse product categories and geographies is a key challenge as they scale up operations across cities. A shortage of skilled labour could further complicate things.
The company is now into the biggest experiment-launching its own branded products, specifically furnishings and appliances.
This is the first time it will retail Livspace products.
Furnishings will include about 4,000 stock keeping units (SKUs), including bedsheets, pillows, pillow covers, quilt covers, and blankets.
The founders are very bullish on the furnishing business and expect it to be a 1000 cr business by itself with dedicated retail showrooms in malls and high streets, and a separate website for a pure-play e-commerce business with furnishings.
Last month, Livspace launched hobs and chimneys in Bengaluru for Livspace customers and plans to open up to customers outside the platform as well. The brand is also planning to launch appliances such as dishwashers next year.
I am just curious about their strategy 🤔
Two concerns:
Scaling the core business itself comes with so many challenges. Customer reviews already reflect disappointment with the current state of affairs.
Now add to this the arduous task of launching two new businesses with totally different playbooks – won’t that consume disproportionate bandwidth of the organisation and divert the attention from strengthening the core.
Two, what gives Livspace a license to win in these new businesses? Especially in appliances space?
Home interiors and appliances might look like adjacencies but there are totally different spaces with own set of complexities.
To me, these look like a desperate attempt to find new revenue streams than fixing the real issue.
Any thoughts?
Source: Mint
