For online furniture e-commerce startup Fabelio, the home market of Indonesia is where it intends to deepen its footprint. Riding on suitable demographics, the startup is looking at chasing an omnichannel strategy to mark its presence in every district of Indonesia.
Fabelio – which secured $6.5 million in its Series B funding led by Aavishkaar Frontier Fund – is also on the road to raise its Series C round to fuel these expansion plans.
In an interview with DEALSTREETASIA, co-founder Christian Sutardi said, Fabelio was targeting to close the round this August. He added, the startup is “very close to profitability.”
“This is supposed to be our last funding before going into profitability,” he says. As part of its long-term plan, Fabelio is also looking at a listing on the Indonesian markets in a couple of years from now.
Fabelio raised $6.5 million in its Series B funding led by Aavishkaar Frontier Fund last year. Could you tell us about fund deployment and various initiatives undertaken in the past year?
We believe in the new retail model and have opened several stores since we raised Series B funding last year. This year we will open 24 stores, but it’s not just about having a lot of stores, it is also about making these stores an important point of the customers’ journey. We’ve been focusing on developing tech and conducting research to understand customer behavior.
We are currently developing a new software called Countervision, through which we derive data on consumer behaviour based on video recordings at our showrooms. It is more like a Google Analytics but for furniture.
Everybody is now focusing on an omnichannel – a cross channel strategy. At the end of the day, it is about offering experiences and focusing on the customer journey.
Do you intend to raise more funds within this year? Are you currently in talks with any local or foreign investor?
We are currently raising our Series C round, targeting [to close] in August. The funding will be allocated to open new showrooms within this year. We want to hire more people. This is supposed to be our last funding before going into profitability. We are very close to profitability. We have very good margins. The funding will be from both local and foreign investors.
Are you looking at any strategic partnership between Fabelio and other startups? Any expansion plan for next year?
Last year, we grew more than three times, so, between 2017 and 2019, we target to grow about nine times. On transaction value, we are roughly at $400 per transaction.
We are partnering with property conglomerate Sinarmas. So, if you buy one of Sinarmas’ new projects, all the furniture inside is from Fabelio. We just signed the project two weeks ago in May.
We also have a project management unit, Projects by Fabelio, through which we have designed a lot of offices. We have executed more than 300 projects. We designed a lot of startup offices from HappyFresh, GOJEK, to Traveloka. We are planning to open showrooms in several cities in Indonesia and expand to Bali by 2020.
What would be your long-term vision for Fabelio?
Our main ambition is to make Fabelio shops available in every district in Indonesia. We also want to go public in like two and a half years from now, listing on the Indonesia Stock Exchange.
The company had earlier proposed to expand its business into regional markets such as Malaysia and Singapore. Is the plan on track?
For now, we do not have any plans to expand abroad or going into those two markets. We are focusing on Jakarta, a city with one of the largest middle-class segments in the world. It has a population of 30 million, which is basically 90 per cent of Canada, twice New York, LA, and Chicago. We see that the growth is quite immense and we want to focus on this city.
Aside from that, are you looking at any other market?
We have small projects in Singapore but our operation is focused on Indonesia, especially the large cities in Java Island. Our focus remains Jabodetabek (Greater Jakarta area) as it is such a massive market.
Your target markets are millennials and young married couples. Have you also been looking at other market segments?
Our focus segments are still a young urban couple with young kids or first-time apartment buyers. [We find] they put a lot of research before purchasing furniture products.
And, we provide high-quality, wood-based, child-friendly furniture. Of course, we can go into the lower market segment as well or the high-end market, but we are basically going into the middle-class segment.
As an archipelago, Indonesia has logistical challenges. How do you tackle those challenges to boost efficiency in operations?
To minimize the cost, we manage logistics on our own. We have around 40 trucks, we have three warehouses in Karawaci, Cibitung, Cikarang (Greater Jakarta area). And, we do the last-mile delivery. We decided to do it in-house because it is much more economical for us.
How do you view competition in the online furniture space? What makes your services and products different?
We always want to focus on ourselves. The biggest difference [between us and our competitors] is that we design, market our products, and do everything in-house. The most important aspect for us is customer experience.
We are a local company, we focus on getting the middle-class market, especially the millennials. We know that millennials are very demanding, that’s why we offer a lot of add on services. We also offer a one-year warranty and our design is cooler and trendy.