According to a Business Insider Intelligence report, the furniture retail category, which includes home goods, is among the fastest-growing segments in e-commerce. The research estimates that an estimated $38 billion was spent in 2016 to buy furniture online and accounted for nearly a quarter of the total market in America.

Wayfair’s Financials

The largest pure-play online retailer of home goods in the country Wayfair (NYSE: W) recently announced its second quarter results. The performance was, once again, impressive. Q2 revenues grew 43% over the year to $1.12 billion, ahead of the Street’s forecast of $1.06 billion. Net loss per share improved from $0.57 a year ago to $0.45 for the recent quarter. On an adjusted basis, Wayfair reported a loss per share of $0.26, beating the consensus of a loss of $0.46 per share for the quarter.

Revenues from the direct retail segment which include its five brands – Joss & Main, All+ Modern, Dwell Studio, Birch Lane and wayfair.com – grew 46% to $1.1 billion. The number of active users increased 43% to 9.5 million and the average order value remained flat at $258. The market had forecast an average order value of $244.

Among other metrics, the trailing twelve-month net revenue per active customer fell marginally to $402. During the same period, the orders per customer grew from 1.70 a year ago to 1.74. Repeat customers placed 61.3% of total orders in the second quarter and the number of orders by repeat customers grew 55% to 2.6 million. Mobile continued to grow as the number of orders placed through mobile devices accounted for 44% of total orders compared with 38% a year ago.

Wayfair’s Expansion Plan

To continue to tap the home goods and furniture market, Wayfair has expanded its product inventory and digital storefront capabilities. Some of the new categories added to its line-up include plumbing, flooring, door and cabinet hardware, mattresses, seasonal decor, housewares, and wedding registry.

Besides the product lineup, Wayfair has been investing in a reliable fulfilment solution called CastleGate Network. The CastleGate fulfillment network allows Wayfair’s suppliers to store their small parcel and large parcel inventory in CastleGate warehouses in return for storage and pick-and-pack fees. These warehouses are located in key markets and use presorting and dedicated transportation to speed up delivery of small parcel and large parcel items. To compete with Amazon’s shipping speeds, CastleGate is now able to offer delivery of 95% of its small parcel sales within the 2-day delivery limit in the US. It is also working on reducing costs for the suppliers through additional programs such as the freight pickup program. The service leverages Wayfair’s rates with trucking companies to pick up full truckloads of supplier product from their domestic warehouses. It allows suppliers to send full containers of small or large parcel products directly from factories overseas to the CastleGate network. CastleGate centers are located in New Jersey, California, and Georgia to handle this inbound container traffic.

Wayfair’s International Expansion

Wayfair has also been driving its presence in the international markets. During the reported quarter, US revenues grew 36% to $1 billion and international sales more than doubled to $126 million. To continue to drive this growth, a CastleGate warehouse was also set up in the UK. Earlier this year, Wayfair announced the launch of a financing program with Barclays where Barclays bears the credit risk on financing transactions worth more than GBP 400.

In Germany, Wayfair has expanded its product inventory and now offers a native German-language translation and product-level merchandising. In Canada, it is able to leverage the product catalog and logistics infrastructure of the US. Earlier this year, it also launched a French language site for its Canadian customers.

Wayfair’s Competition

Wayfair may be delivering impressive growth, but it should still be worried about the elephant in the room – Amazon. Wayfair’s average order price of nearly $250 suggests that it is not really selling big furniture pieces. In fact, the company admits that it is focused on consumers buying individual items “to freshen up their home”. Amazon may not be a known furniture seller, but it has a bigger clientele and inventory of home décor items. Additionally, Amazon’s might ensures access to the kind of data that Wayfair doesn’t have. For instance, when a Prime subscriber moves homes, Amazon can anticipate their customers’ next need and push out offers targeted to those needs.

Wayfair should also realize that it is not easy to sell furniture only online. People want to be able to sit on and feel the comfort of the piece they are buying. Looks are important, but comfort is equally important. Wayfair has no brick-and-mortar presence. Amazon doesn’t have a furniture store, but it is slowly expanding its physical store presence and may enter the furniture category in a not too distance future.

So far though, its stock has done well. It had listed in 2014 at a price of $29 a share. It has steadily climbed and is currently trading at $69.01 with a market capitalization of $6 billion. It touched a 52-week high of $82.19 earlier last month.