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Pepperfry is on Its Path to Become a Billion Dollar Company in the Next 2-3 Years

Pepperfry is geared towards scaling the Studio presence and recently rolled out a franchise model with an aim to build the largest omni-channel network in the country. Pepperfry will open 46 Studios by March 2018.

Ashish Shah, Founder and COO, Pepperfry

Pepperfry has come a long way in its journey to establish leadership in the online home and furniture segment. This has been achieved in a short span of 5 years. The company is now charting out its strategy in order to move to the next orbit of growth, with a vision to create 20 million beautiful homes by 2020.

Ambareesh Murty, Founder & CEO, and Ashish Shah, Founder and COO at Pepperfry, have together charted out Pepperfry’s leadership journey. They, along with their team, have taken on this vision to grow the furniture and home segment by making significant investments towards organizing this segment, while transforming the way Indians shop for their home through the marketplace that has an omni-channel presence. 

In an interaction with BW Disrupt, Ashish Shah, Founder and COO, Pepperfry shared the company’s future plans.

Excerpts from the interview:

How big is the online home and furniture segment? How much of the market share has Pepperfry captured so far?

The online home and furniture segment offers a huge opportunity for growth. It is a $32 Billion market and by 2020 it is set to reach $71 Billion. While the total offline market is growing at 10-15% YoY, the online component is growing at 300% YoY. Over the next few years, we expect the online Home and Furniture business to become 9% of overall eCommerce, 6% of the Overall H&F market.

These projections are in line with Home and Furniture trends worldwide where the segment constitutes more than 10% of eCommerce in markets across the globe; it is 13% of US eCommerce, 19% of Chinese eCommerce, 20% of Brazilian eCommerce and 17% of the eCommerce market in Russia.

Pepperfry has established its leadership in the category occupying two-third of the online traffic in the segment. Pepperfry dominates about 62% of the online traffic in this segment with a high conversion rate. This is a strong indicator of the category leadership built by Pepperfry in less than 5 years.

How much revenue did your company generate last year? How much are you planning for this year?

Our growth rate is 150% Y-o-Y. We surpassed our target of achieving a 1000 Cr GMV in March 2016 and Pepperfry is well on its path to become a billion dollar company in the next 2-3 years.

What are Pepperfry’s current achievements in terms of users, no. of products, funding, tie-ups, partnership etc.?

A testament to the fact that Pepperfry is the leading online home and furniture marketplace and are in a position to hit a billion dollar GMV are the key differentiators built around the scale achieved in every aspect of the business:

·         Our supply of 1.2 lakh unique live listings is unparalleled in both the online and offline segment

·       We reach 500+ cities directly through our own network of 400+ delivery trucks, thus giving us the largest capacity for delivering bulky items right up to the last mile in the home and furniture segment

·         We work with 10,000+ suppliers in the country including MSME’s and large brands

·         Have more than 3.5 million registered users

·         We have shipped more than 4.5 million customer orders

·         50% of the transactions come from repeat buyers

Globally, only few of the top 35-40 companies to have raised more than $100 million, Pepperfry has overall raised $167 million from marquee investors like Goldman Sachs, Norwest Venture Partners, Bertelsmann India Investments and Zodius Technology Fund.

Our Managed Marketplace model is a platform for 1000+ SME’s and 900+ leading brands in the home and furniture segment. These contribute towards forming the most exhaustive catalogue of 1.2 lakh items in the segment. Thus, we are able to offer a diverse range of merchandize to our customers’ to complement a wide spectrum of styles at competitive price-points. For instance, in furniture we have the largest collection of designs sourced from 90+ national brands like Hometown, Spacewood, FurnitureKraft, Evok, etc.

Additionally, Pepperfry has 7 house brands that cater to the varied and distinct requirement of each customer. Each House brand is differentiated by design ethos and every furniture piece fulfils specific design requirements and quality standards. Contributing to 55% of our overall business, these brands include:

Woodsworth - A contemporary furniture brand which is characterized by a timeless, classic range of furniture

Mintwud - Represents functional designs that are conceptualized for modern and compact homes - a rare combination of style and functionality.

Casacraft - Represents transitional modern furniture style reflecting minimalist and clean lines are inspired by fresh concepts to offer functionality along with style

Amberville - Designs are inspired from the classic colonial style of furniture

Bohemiana - A range of furniture that blends the free spirit of the eclectic style

Mudramark - Carefully crafted furniture which is influenced by ethnic Indian art, architecture and culture

Mollycoddle - A versatile range of modern kids’ furniture with a punch of vibrant and cheerful colours

What are your future plans?

Pepperfry has set out a mission to help create 20 million beautiful homes by 2020 and taking cognizance of the need to have multiple engagement touch-points for its consumers, Pepperfry pioneered the omni-channel approach by opening 20 Studios across the major metro cities in India. These Studios essentially serve as offline experience centres for discerning Pepperfry customers who are seeking design inspiration. Here they can not only experience a select Pepperfry range but also avail complimentary design consultation.

Pepperfry is geared towards scaling the Studio presence and recently rolled out a franchise model with an aim to build the largest omni-channel network in the country. Pepperfry will open 46 Studios by March 2018.

We will extend our Studio coverage into Tier II and III towns, and in keeping with Pepperfry’s sharp focus on customer experience significant investments will be made behind Supply Chain Automation and the Big Box logistics network will expand to 1000+ Cities. 

In how many cities Pepperfry is present currently and how do you look at expansion?

Pepperfry’s specialized large item delivery fleet of more than 400 vehicles operating from 17 hubs across India today serves customers in 500 cities. Pepperfry also provides assembly and installation support to customers through a team of more than 250 carpenters across major towns and cities. Pepperfry expects to double its logistics footprint 1000+ cities & towns to establish robust delivery network in Tier III and Tier IV cities.

What unique initiatives are you taking for your business growth this year?

Currently our key focus is to expand the offline presence and establish the largest omni-channel business in the home and furniture segment. We envisage our Studio’s as a co-working space for the designer and architect community who can become our channel partners and contribute to our vision of helping customers build beautiful homes. The aim is to build a vibrant community of interior designers and architects for which we have also rolled out a channel partner programme. We are confident that we will empanel 300 designers by the end of this quarter under this programme.

We are also geared to ramp up our alliances business by partnering with builders, corporates and the HORECA (Hotels, Restaurants and Cafes) industry. This will be done through gift cards for employee R&R programs, office interiors, gift cards for builders to drive primary sales, modular furniture for new projects, etc.

All the leading offline furniture brands in country sell on our marketplace and we are looking forward to new players who contribute towards expanding the organized furniture market in the country. Today, close to 88% of the market is unorganised, and as more players enter the segment, they will contribute significantly towards organizing this market.

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Online home & furniture segment

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