Westwing and Home24 - a tale of two online furniture retailers

Furniture and home decoration have been categories that have been seen as less developed in terms of the online penetration. However, there are multiple successful retailers selling home and decor products online.

Among them are German pure players Westwing and Home24. Both of the companies have grown rapidly over the last five years, more than doubling the revenues.

The pandemic acted as a big catalyst for the growth of these two companies. Especially Westwing grew rapidly in 2020 with 60+% growth.

The interesting difference between the pandemic response of Westwing and Home24 was the profitability of the growth. Where Westwing was able to claw itself into profitability, Home24 continued on unprofitable growth trajectory.

The biggest difference for the two companies can be seen in how Westwing was able to grow it’s gross margin since 2019. The gross margin jumped in 2020 to 49% (from 44,6% in 2019). Alongside the improved margins, Westwing has been able to keep it’s marketing budgets under 10% of revenue. For Home24 marketing is 15+% of revenue.

One interesting difference in the marketing activities of the companies can be found in social media. In Germany Home24 has 375 000 followers, whereas Westwing has a whopping 1,8 million followers.