HUB > Companies > Home24
From last funding transaction in Jun-2015.
"Home24 was founded in Berlin in 2009 and launched its online store in 2011. It sells quality furnishings at reasonable prices to the mid-market. The range of products it offers (more than 150,000 from over 800 manufacturers) is significantly greater than its online competitors. Moreover, the firm also sells own-brand products such as Furnlab, Jack&Alice, Mørteens and Smood.
Over its first 4-5 years, the firm built up its platform and then expanded from Germany into Austria, Brazil (under the name of Mobly) France and Holland. During 2014, the pace of expansion increased dramatically with a pan-European roll-out across Belgium, Italy and Switzerland, and the opening of the firm’s own warehouse in Berlin.
The numbers also increased dramatically. In 2012, Home24 had 50,000 items in its catalogue, half a million customers and net revenues of €62mn. Sales reached €100mn roughly one year later (61% growth) and the firm now offers over three times as many products to over one million customers. Between 2012 and 2014, the firm doubled the number of orders it took (from 100,000 to 200,000) and most of the firm’s KPIs now seem to be trending in the right direction.
Getting here has not been easy. In 2012, Home24 has had to deal with the loss of customer data from phishing and migrating from well-known e-commerce platform Magento to a proprietary system. This was so problematic that the firm’s site had to be taken down briefly. While the firm still uses a third party for its logistics operations, its e-commerce operations are now certified by German engineering firm TÜV Süd and reviewed on the Trusted Shops platform.
A feature of Home24’s business model that is common amongst fashion e-tailers is offering not just free delivery but also free returns for the first 30 days. The idea is that this gives customers the confidence to buy and hence increases turnover. However, even though the firm’s mean basket size (a little over €200) is larger than might be expected in the fashion world, it is more expensive to deliver furniture than clothes and Home24 is not yet profitable.
While Home24 cites return rates of under 10%, this could still have a significant impact on the bottom line. Even if costly, however, this strategy will help the firm grow and compete with better known bricks-and-mortar furniture retailers, such as Ikea, who are now expanding online."
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