“Yandex Market” will be engaged in the production of furniture
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After the ex-managers of the Russian office of IKEA moved to Yandex Market, the marketplace decided to produce furniture under its own brand. The share of online sales in the segment is growing annually and already exceeds 16%. However, experts emphasize that the average purchase price online is much lower than in offline stores: most buyers prefer to buy only oversized furniture online.
Yandex Market has launched the sale of furniture under its own brand (STM) in the middle price segment, Kommersant was told in the company. Now sofas and beds are available on the site, by the end of 2023 the range will be replenished with furniture for the living room, kitchen and bedroom. The company expects that furniture under its own brand will take up to 10% of the category turnover on the online platform. By the end of 2025, the assortment is planned to be increased to 3,000 items.
The project will be developed by a team of ex-managers from IKEA, who moved to Yandex Market after the Swedish company closed its enterprises in Russia. They will develop products.
For the production of furniture, the marketplace will work mainly with Russian factories. However, they specify in Yandex Market, in parallel, the company began to cooperate with manufacturers from Belarus and China.
Yandex Market’s competitors are in no hurry to launch their private labels in the furniture segment. Wildberries says the company has no such plans, but will continue to work with Russian manufacturers to sell their brands.
Mikhail Burmistrov, General Director of Infoline-Analytics, notes that the launch of furniture under private label forms the competitive advantages of the marketplace in an environment where online platforms need to offer an exclusive product to attract customers. However, the expert notes that the development of its own brand by the marketplace will lead to the fact that sellers selling their products on the online platform will also face additional competition.
In addition, Ruslan Madzhitov, director of e-commerce at Angstrem, clarifies that for online trading in large-sized furniture, the marketplace will have to expand its logistics capacity and provide assembly services.
In general, the volume of furniture production in Russia in the first half of the year began to grow after a decrease observed at the beginning of the year (see “Kommersant” dated August 15). The demand for these products is also growing in the online channel. The share of online sales of furniture and household goods in the first six months of 2023 reaches 16.5%, second only to electronics and home appliances (18.3%), follows from the data of the Association of Internet Trade Companies. The total volume of the e-commerce market for this period reached 2.7 trillion rubles.
Since the beginning of 2023, furniture sales on Yandex Market have tripled, more than half of them are cabinet products.
The turnover of this segment in Wildberries in the first half of the year grew by 103% year-on-year in monetary terms, by 134% in real terms, and racks, chairs and tables are among the most demanded goods. According to the results of the first half of the year, online sales at Hoff grew by 28%, their share in the sales structure is 30% of the total turnover.
However, the average check for online purchases is still much lower than for offline retail, says Maxim Valetsky, co-founder of Mr.Doors. According to him, it is more convenient to purchase oversized goods on the Internet, while when buying kitchens and living rooms, the principle “search online, buy offline” still works. Most people still need tactile-visual contact with the product in order to evaluate its convenience and quality, agrees Ruslan Madzhitov.
At the same time, online platforms to attract customers can create offline showrooms or use 3D models to promote goods, Mr. Burmistrov believes.
In general, notes Maxim Valetsky, complex interior solutions are gaining popularity in the furniture market. According to him, buyers prefer manufacturers and sellers who sell whole sets of different pieces of furniture in a single style.
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