Shoppers comfortable buying furniture online
Considering the large size and relatively expensive price tag of furniture, most customers used to prefer visiting normal brick-and-mortar stores, choosing to buy only once they had tested the quality and comfort of products before purchasing.
However, due to the rapid transition in consumer spending trends during the last couple of years, online shopping has become a friendly and convenient outlet for furniture as well.
According to 11st, an online shopping site, last year’s sales in the mall’s furniture section soared 24 percent year on year. In fact, growth showed a 49 percent jump in sales of furniture by small and midsize enterprise labels, which are usually priced at an affordable level. About half of these online purchases were made through mobile devices like smartphones.
Another reason for the surging popularity in the online furniture market, especially small home decor items, is the influence of the recent home styling fad, along with television programs themed on house decoration.
“After Ikea entered the domestic market, consumer interest in affordable furniture sets and home decor items have soared,” said Go Hee-jeong, head of the bedding furniture team at 11st. “Customers purchasing furniture with a click on mobile devices, as if buying clothes or commodities, are rapidly increasing.”
Data from the furniture industry shows that the total size of the furniture market was 1.2 trillion won ($1 billion) last year and is expected to grow as big as roughly 2.5 trillion won by 2020.
The players in the industry, who used to have their focus on large showrooms, are shifting their interest to the online marketplace. Since the pie of the online market is expanding at a rapid pace, its dominance will become a crucial factor in determining the success of each company.
The nation’s No. 1 furniture and interior design company, Hanssem, has recently redecorated its online shopping site Hanssem Mall, in step with the change in customer sentiment. The membership registration time has been shortened from 2 minutes to 30 seconds. A simplified payment process and strengthened search system that divides products into categories, brand, size, price and style are also part of the changes.
The revenue from Hanssem Mall grew from 27.9 billion won in 2009 to 170 billion won last year, showing an annual growth of 20 percent.
“This year’s goal is to reach 200 billion won in revenue from the online mall,” said the head of online business at Hanssem. “Another goal is to adjust the percentage of earnings from offline and online outlets into 5 to 5 in the future.”
To accomplish the goal, the company will release a mobile app by the end of this month and integrate all of Hanssem’s separate homepages, such as Hanssem Interior and Hanssem Kitchen, into Hanssem Mall.
Hyundai Livart, the No. 2 player in the market, also operates a mall, called Livart Mall. Its revenue was at the 7 billion won level in 2009, but revenue increased tenfold last year to 70 billion won.
The company aims to reach sales of 150 billion won by 2020. To do that, the company plans to reform the mall during the first half of this year and turn it into a “total interior mall” from a furniture-centered mall.
“In step with increasing demand for small-size adornments led by youngsters, we plan to expand our product categories in the household items sector from 2,000 categories to 3,000,” said Eom Ik-soo, director of the sales department at Hyundai Livart.
It will also implement convenient payment options such as NPay, operated by Naver, and Payco on its site.
According to industry insiders, the online furniture market will turn into something similar to the “specialty store retailer of private-label apparel,” following the increase in the number of single households.
“Consumers who quickly change their furniture at a cheaper price following the trend and season will be the leading customer segment of the online furniture market,” said Go from 11st.
BY LEE SO-AH [firstname.lastname@example.org]