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America’s largest furniture e-commerce company: Wayfair Inc. (W) (2002)

Wayfair Inc. (NYSE: W) was established in 2002 and is headquartered in Boston, Massachusetts, USA. It has 5,637 full-time employees and is the largest furniture e-commerce company in the United States.

wayfair logo

Wayfair (W):

Wayfair is the largest furniture/furniture e-commerce company in the United States, with more than 12,000 suppliers providing products and services for its five brands, and a total of 7 million products.

Wayfair was co-founded by Niraj Shah and Steve Conine in August 2002. It was originally a small shop called CSN, which specializes in selling furniture for storage and home entertainment. Later, CSN gradually established multiple websites to sell other household goods and furniture. By 2010, the entire company had more than 600 employees, had more than 200 websites, and had annual sales of US$380 million.

In 2011, Shah and Conine decided to unify all websites under one brand to enhance the operation of the company, and wanted to further improve the company’s level through external financing. So there is the Wayfair brand, and in July 2011, it received a number of venture capital investment of 165 million US dollars. In the past three years, it has frequently raised funds. In 2014 alone, it received an investment of US$201 million and the company’s valuation reached 2 billion.

Now Wayfair has five brands : Wayfair.com, which mainly sells mid-range furniture; Birch Lane, which targets mid-to-high-end users; AllModern, which sells high-end brands; Dwell STudio, a modern home studio; and Joss & Main, which is a permitted design A flash sale site where the designer sells his design products.

Constantly studying consumers and respecting consumers is another reason why Wayfair has become a giant in the furniture e-commerce industry. In Wayfair’s analysis, consumers are divided into hunting and collecting types. Hunting consumers use Google to search and browse useful information to quickly place orders and make decisions. The price is very tempting for them. After finding and locking the consumption habits of this group of people through data Wayfair, they will adjust the corresponding products in real time. The price to ensure it is lower than Amazon or other platforms. For collecting consumers, they are more satisfied with appreciating product matching and creative display, so Wayfair has set up a column ideas to provide style matching, creative design, buying guide and other information to guide consumers to buy.

Wayfair (W) investment:

Wayfair IPO on October 2, 2014, the issue price was $29, 11 million shares were issued, and the valuation reached 2.4 billion. The first day of IPO rose +30.07% to $37.72. The closing price of the most recent day was $29.05, returning to near the issue price.

Wayfair lost US$15.5 million in 2013 and US$51.4 million in the first half of 2014. The increase in losses was mainly due to advertising expenditures.

The US home improvement market was 233 billion US dollars in 2013, an annual growth rate of 2.3%, and the market size is estimated to be 297 billion US dollars by 2023. The online share was 7% in 2013. 70% of Wayfair’s customers are women. There are 158 million women in the United States, of which 63 million are between the ages of 35-65. This is Wayfair’s target customers.

There are 7.3 million people in the United States who belong to the “millennial generation”, aged between 18-31. According to market research, 29% of millennial customers are accustomed to shopping online, compared to only 12% of post-war baby boomers (48-66 years old). As the millennial population enters the marriage and childbirth period, the proportion of the US online shopping population will continue to grow.

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