New Delhi : Home interiors platform Livspace recently raised $180 million at a valuation of over $1 billion to join the unicorn club. So far, it has raised around $450 million from KKR, Ingka Group Investments, TPG Growth, Goldman Sachs and Kharis Capital, among others. Kartikeya Bhandari, Chief Marketing Officer, Livspace said in an interview that as it expands to smaller cities, the company has launched a brand campaign with Virat Kohli and Anushka Sharma for instant consumer connect. He added that the company is simultaneously entering overseas markets. Edited excerpt:
How do you define livespace? Is it a service or product brand?
It is a solution brand. It consists of a product component and a service component. We connect homeowners with vendors and interior designers, and provide them with a platform to work from start to finish on home interiors and renovations. We are present online, but we also have experience centers in all the cities where we operate. We have around 4 million SKUs (Stock Keeping Units) and more than 5,000 brands on the platform. It’s huge, but there’s still a lot of stuff we don’t have because it’s such a long tail when it comes to this category.
How difficult has it been to build a brand in this space?
Before getting into brand building, I think it’s important to understand the category – a high-ticket value, unorganized, low frequency, and unstructured category, which means people still rely on traditional carpenters or contractors for a lot of stuff. Huh. They have their best interests in mind which may not always be the case. But you have no way of knowing because it (the service) is not standardized. When we came in, the first thing we did was make sure people understood the whole process better. We have invested in the content site. We weren’t doing a lot of brand marketing. One of the reasons I came in three years ago was to try to figure out what the strategy would be. Maybe it was the right time for us to start building a brand that goes beyond the top, let’s say, six cities of India, which it was at the time.
Now, we are in around 40 cities and have been present in Singapore for over two years as well. We have a strategic partnership with IKEA in Malaysia where we have started operations, and in Saudi Arabia where we will launch soon.
Livespace ads have been bizarre. Have they worked?
We work with Tilt Brand Solutions and it has been a fruitful partnership. We started by understanding the consumer better. We realized that the only features they look for before making a decision are quality and design. By quality I mean the quality of workmanship, materials used and fittings. By design I mean both form and function because it should not only look good, but it should also do the job it is intended to do. If you look at the previous campaign, we’re just trying to establish that narrative.
You got Virat and Anushka because you have money to burn or do they serve a purpose?
I think they serve a purpose. The decision to use them was made before Unicorns came to the club. We did this for two reasons. We are expanding rapidly in Tier-2, Tier-3 markets. It’s a brand new one and people haven’t really seen or heard of us because we’ve never used broadcast media in these geographies. Many of them will be seeing us for the first time. he was the one. Second, we wanted to create ads that were a little more memorable, with more stickiness. I think celebrities have done it well. Ultimately, we wanted to get celebrities who are representative of our main target group, who are known for their dependability and professionalism and are at the top of their game. That’s the association we wanted to make.
Is there enough demand from smaller towns?
One of the cool things about a business that is digital is that you want to see where the traffic is coming from. When I talk of smaller cities, it is actually tier-two and tier-three cities…like Ahmedabad, Indore and Lucknow. And that’s because we’re on the bottom of the real estate market, as in, wherever there’s a real estate boom, and when people are buying homes, they’ll feel the need to do interiors. This is why your usual suspects are at the top of the list for us as well as the top 15-20 markets that do a lot of business. The top 15 markets in India will be a detectable market for old home renovation and new home interiors worth around $10 billion per year.