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After a lull last year, India’s real estate market is on the upswing again, especially in Mumbai, Bangalore and New Delhi. The Indian middle class’ purchasing power has significantly increased in the past decade, as realty investments in major metros and Tier 2 towns are on the rise. And the market is estimated to reach $180 billion by 2o2o, a jump of almost 43% over a five-year period.
However, the journey to building a dream house is seldom an easy one, something Ramakant Sharma and Anuj Srivastava discovered the hard way. Sharma says, “I was ecstatic after purchasing an apartment in Bangalore, but realized very quickly that the real work began after the keys were handed over to me. From finalizing floor tiles, paints, light fixtures to kitchen and bathroom fittings, the onus of seeing a house to completion is on the homeowner. What follows is a wild goose chase of contractors, carpenters and designers to ensure your house becomes a home.”
So in 2014, Sharma, a former VP of engineering at Indian e-commerce giant Myntra, along with Srivastava, former head of worldwide product marketing for e-commerce at Google, decided to launch Livspace, a one-stop shop for homeowners, containing everything from interior designs to a full-scale inventory of home décor items, allowing them customize a living space and witness a project shape up from start to finish.
Virtual Reality and online shopping deliver what’s promised
The average cost of a premium quality 3BHK (3 bedrooms, hall and kitchen) in an Indian metropolis starts at around $145,000 and can go up to $729,000, according to Housing.com. Sharma estimates that homeowners typically spend about 10% to 15% of this home value on interiors alone. “Homeowners experience several issues while getting their homes furnished, including hiked up costs by contractors, delays in completing tasks and unavailability of raw materials,” he says.
Instead of relying on a design blueprint alone, Livspace is tapping into advanced technology to match up to customer expectations. Sharma says, “Interior designers sell an abstract design to homeowners on paper, but as the project begins unveiling, the customer is unable to see all the parts falling in place as they happen. This is the core of poor customer experience, which we are addressing through virtual reality and 3D renders.”
At every one of Livspace’s four design centres in India are VR booths where customers can see what a home looks like based on the design brief provided. I visited one of Livspace’s experience centres in Bangalore’s posh Lavelle Road where I was shown a prototype of a 3BHK apartment in VR. By using a joystick, I navigated from one room to the next, seeing everything from beds, floors, furniture, kitchen fittings, bathroom fittings, woodwork and light fixtures, developed per a customer’s design brief.
When a customer signs up with Livspace, he is matched with an interior designer chosen from the company’s internal repository of more than 2,000 registered designers. After receiving a brief from the customer, the designer creates a concept on Livspace’s proprietary design automation platform Canvas, where 3D renders of designs are generated. Currently, VR demos are available for Livspace’s popular pre-designed concepts, but the startup is working on making them available throughout Canvas, just like 3D renders.
Another recurrent problem among homeowners is not being able to find home décor items or materials of their choice. So, Sharma created a complete e-commerce catalog of products, allowing customers to choose from items readily available in either Livspace’s supply chain, warehouse or factory. The company’s e-commerce catalog has about 10,000 products on offer, including door handles, curtains, upholstery, wood laminates, veneer, paints, and tiles. A customer can choose his preferred materials, place it in an online shopping cart and share this list with his designer, who creates a 3D design.
This dual-pronged approach of a tactile experience through VR and freedom of choice through online shopping has led to higher customer conversion for the startup. Livspace receives nearly 300 orders each month, with the average price of each design order pegged at around $17,000. Since its inception in 2014. Livspace’s revenue has grown 1,200% and is expecting to hit an annualized revenue run of $100 million by the end of the fiscal year 2019.
Heralded by Fast Company in 2017 as one of India’s most innovative companies, Livspace has garnered around $28 million in funding from investors like Helion Ventures, Bessemer Venture Partners and Singapore-based Jungle Ventures. Reports state that private equity firm TPG Ventures, an active investor in Uber and Airbnb, is expected to pump in around $40 million.
Catering to the Millennial Indian
The popularity of Livspace, in addition to the advent of IKEA in India next month, shows that experiential buying is gaining ground. Unlike earlier where there was little creativity or aesthetics in home interiors, the modern-day Indian home is a reflection of its owner’s sensibilities and personality.
Angel investor and entrepreneur Suhas Gopinath says, “The combination of experiential design centres and an online shopping catalog is ideal. It allows for greater freedom of choice, personalization and transparency. The use of advanced tech like VR connects with a younger, evolved audience whose tastes are contemporary.”