Under Mukesh Ambani’s watch, Urban Ladder (UL), which was almost dead 2.5 years ago, is growing on steroids.
Here’s everything you need to know about its smart e-commerce expansion and insane offline expansion.
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UL was founded in 2012 as an online furniture and home decor brand and has raised more than $100 million.
But that only helped it build a great brand, not a business.
- As a result, it decided to go omnichannel in 2017 by opening its first offline store in Bengaluru.
- And two years later, when it closed FY19 with Rs 50 cr profits on Rs 300 cr revenues, it knew it could build a solid offline business with that brand it had built.
But, together with Rs 950cr loans it had taken up, the mgmt had already burnt much more than what investors had even put in 📛📛
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As a result, it was too late. Key executives, including the company’s first investor (Vani Kola (vanik.eth) of Kalaari Capital), had resigned.
There would be no more funding, leaving only two options:
- Everyone could profit from a distress sale.
- Bankruptcy: There is no money for anyone.
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Reliance Retail had recently acquired Netmeds.com and was aggressively expanding the months-old Jiomart.
- It saw an opportunity to further expand its digital footprint with an established brand in UL.
- Thus, leveraging its ties to Kalaari, it acquired a 96% stake in Q3FY21 for just Rs 182 crore.
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It now had a great brand but had no idea what to do with it.
Given its rich offline retail experience, it knew that the penetration of e-com was expanding fast, but was still too low and would take time to reach critical mass.
As a result, it decided to reduce its investments in this area while exploring the potential for what it knew best–expanding offline.
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First, it allowed other brands to sell their own goods on UL’s website in exchange for a sales commission.
- Reliance onboarded 100+ brands on UL within three quarters of acquisition, helping to drive daily orders up by twofold year on year.
- Revenue increased by 100% by the end of the first year under Reliance, with external brands accounting for 18% of the total.
- SKUs on offer had grown 5x by the end of FY22, with minimal investment.
- By the end of FY23, this had multiplied tenfold, with another 21% increase in revenue.
To further boost the e-commerce play, the inventory has also been listed on Jiomart!
That means even more reach and distribution! 🚀🚀
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And in the midst of the offline play, Reliance was ready with the blueprint for offline play.
So the expansion began with the start of FY23!
Q1FY23: ten stores in five cities
Q2FY23: 25 locations
Q3FY23: 39 stores
58 stores in 32 cities in Q4FY23
Q4Fy24 (Target): 100 stores in 64 cities
It’s clear that Reliance sees a lot of potential in UL and is all in on making it a big boy beast!
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