The objective was to assess the growth and profitability prospects for a fast growing online retailer of furniture in India.
As part of the diligence process, we undertook a comprehensive market landscaping of the furniture and furnishing space in India- covering market sizing from demand and supply side, deep dive into structure of the overall retailing and eCommerce channel for both markets, comprehensive competitor deep dive to validate the horizontal vs vertical theses. A large sample consumer and supplier survey was run to identify the consumer behaviours and changes therin that would support the investor growth theses on the market. Additionally, a mystery shopping execise was also run to test the theses around the robustness of the Target’s supply chain.
Using the above comprehensive analysis, a 5 year growth modeller was also developed for the sector and for the Target, along with a steady state profitability model. All these assesment and models together enabled the investor to take a rich data backed call on the investment.