We hired celebrities as we are new to many markets: Kartikeya Bhandari
PremiumOne of the good things about having a business which is digital is you kind of see where traffic is coming from, says Kartikeya Bhandari of Livspace
NEW DELHI : Home interiors platform Livspace recently raised $180 million at a $1-billion-plus valuation to join the unicorn club. So far, it has raised close to $450 million from KKR, Ingka Group Investments, TPG Growth, Goldman Sachs and Kharis Capital, among others. As it expands into smaller towns, the company has launched a brand campaign with Virat Kohli and Anushka Sharma for instant consumer connect, Kartikeya Bhandari, chief marketing officer, Livspace, said in an interview. The company is simultaneously entering the overseas markets, he added. Edited excerpts:
How do you define Livspace? Is it a services or products brand?
It is a solutions brand. There is a product component and a service component to it. We connect homeowners with vendors and interior designers, and provide them with a platform to do an end-to-end job for home interiors and renovation. We are present online, but we also have experience centres in all the cities we operate in. We have about 4 million SKUs (stock keeping units) and 5,000-plus brands on the platform. It’s huge, but there’s still a lot of stuff that we do not have because it is such a long tail when it comes to this category.
How difficult has it been to build a brand in this space?
Before going into brand building, I think it is important to understand the category—a high-ticket value, unorganized, low frequency, and unstructured category, which means people are still largely reliant on traditional carpenters or contractors for a lot of stuff, thinking they have their best interests in mind which may not always be so. But you have no way of knowing as it’s (the service) not standardized. When we came in, the first thing we did was to make sure people can understand this whole process better. We have made investments in the content site. We were not doing a lot of brand marketing. Part of the reason I came in three years ago was to try and figure out what the strategy would be. It was probably the right time for us to start building a brand that extends beyond the top, let’s say, six cities of India, which was what it was at that point in time.
Now, we are in close to 40 cities and also present in Singapore for more than two years. We have a strategic partnership with IKEA in Malaysia where we have started operations, and in Saudi Arabia where we will launch soon.
Livspace ads have been quirky. Have they worked?
We work with Tilt Brand Solutions and it’s been a fruitful partnership. We started by understanding the consumer better. We realized that the attributes they look at before making a decision are quality and design. By quality, I mean quality of workmanship, materials used and fittings. By design, I mean both form and function as it should not only look good, but it should also do the job that it is intended to do. If you look at the previous campaign, we’re just trying to establish that narrative.
You have got Virat and Anushka because you have cash to burn or do they serve a purpose?
I think they serve a purpose. The decision on using them was made way before we were in the unicorn club. We did this for two reasons. We are driving more expansion into tier-2, tier-3 markets rapidly. It’s a new brand and people haven’t really seen us or heard from us as we have never really used broadcast media in a lot of these geographies. A lot of them will be seeing us for the first time. That was one. Second, we wanted to create ads that is a bit more memorable, has more stickiness. I think celebrities have done that well. Last, we wanted to get celebrities who are representative of our core 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 build.
Is there enough demand from smaller cities?
One of the good things about having a business which is digital is you kind of see where traffic is coming from. When I say small towns, it’s really tier-two and tier-three towns...like Ahmedabad, Indore and Lucknow. And the reason for that is we are downstream from the real estate market, as in, wherever there is a real estate boom, and as and when people are buying homes, is where they will feel the need to get the interiors done. Which is why you have your usual suspects make up 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 an addressable market of about $10 billion a year for old home renovation and new home interiors.