We’re long past the days when shopping for furniture used to be a taxing and exhausting task, where we were compelled to go from one room to another to explore and locate the kind of furniture we required and whose quality and design suited our requirements. If it was unavailable we were required to get it made. Yet the process has now been revolutionised as the furniture market emerged onto the online platform. With the furniture now being available online, we can simply select the kind we prefer and order it for it to get delivered and set up in our homes without any fuss.
As confirmed by a Business Today article, the online furniture sector, which merely comprises 3 percent of the total organized furniture market of the Indian nation, has risen to make its place among the leading and rapidly growing e-commerce sectors in the nation. Although the segment has been flourishing at a steady rate of 35-40 per cent in the past five years, the COVID-19 lockdown has prompted a swift upsurge.
The pandemic has played an integral role in giving a boost to fresh market trends and in aiding manufacturers in exploring the fresh business opportunities. In the present scenario as a massive portion of the nation’s corporate employees as well as students operate remotely online amidst the pandemic, the demand for furniture for home-office like study tables or office chairs has intensely escalated.
The online furniture market in the Indian nation has been progressing rapidly, largely owing to the gradual shift in customer behaviour and preferences from offline to online platforms. The present pandemic has resulted in an increasing dependence upon online retail to fulfil purchasing requirements, both among the traditional as well as modern customers. One of the leading furniture companies that has flourished and established its place further, particularly during the recent lockdown, is Pepperfry.
In this blog you will gather a deeper knowledge about Pepperfry, its founders, origin, business model, growth and its funding.
Now among one of the leading online furniture stores in the Indian nation, Pepperfry had been established in 2011, courtesy of Ambreesh Murthy as well as Ashish Shah. The platform focuses on home decor aspects such as lighting, furnishing, housekeeping, dining kitchen appliances and many more.
Pepperfry comprises a massive collection of products. It's simple and advanced mechanism for products and their delivery has helped it occupy a leading position in the market. As confirmed by Times Now, having more than 8 million registered users, the ecommerce platform has three warehouses and 21 centers for distribution. About 58% of its transactions are carried out by repeat purchasers.
As stated by the Economic Times, nearly 80-85% of the company’s business is occupied by the solid wood furniture category which also serves them a revenue of Rs 500 crore per annum.
Pepperfry had initially started out as a horizontal online marketplace that focused on facilitating products across the range of categories like fashion and lifestyle but a year later in 2013, the platform shifted towards establishing its place in the category of furnishings, home decor, and related items online. With its headquarters residing in Mumbai, Pepperfry has set up over 60 Pepperfry studios across cities. Each of the studios exhibit a wide variety of furniture, which allows the users to get a look and experience the furniture prior to placing their order.
In September 2018, as confirmed by Business Line, the platform set up their furniture rental service in Mumbai, Bengaluru, Delhi, Gurgaon, Hyderabad, Pune, Chennai, Noida, and Ahmedabad. This service focuses on urban population between the 25 - 35 age span, and is facilitating over 1200 products on rent for a period of 6, 9 or 12 months. In the same year the platform also collaborated with the online classifieds platform Quikr to set up a programme for furniture exchange.
Pepperfry primarily follows the Omni-channel strategy, which permits the customer to place their order at any time, anywhere and via any device or channel.
Pepperfry’s founders are Ambareesh Murty and Ashish Shah.
Ambareesh Murty, the CEO of the platform has a degree in MBA from Indian Institute of Management, Calcutta. He formerly worked at Cadbury, ICICI Prudential, as well as Britannia. Ambareesh was also the Country Manager at eBay India, Philippines, and Malaysia, while serving as the Vice Chairman of the Internet and Mobile Association of India (IAMAI)in the year 2009.
Ashish Shah, the COO of the platform, has an Advanced Diploma in Materials Management from the Institute of Management Technology, Ghaziabad. He also has a degree in Chemical Engineering from the University of Pune. Ashish's career began when he became the Branch Sales Manager at Tradox Pigments & Chemicals in 1998. He also worked at ChemB.com India, C1 India Pvt Ltd, Baazee.com as well as eBay, before joining hands with Ambareesh to establish Pepperfry.
The Origin of Pepperfry
It all kickstarted with a conversation during lunch, when Murty and Shah met at a mutual friend’s office for lunch in Mumbai. During this conversation the duo came to the realisation that there was a crucial need to address the breach that existed in the industry, when it came to tending to lifestyle requirements of customers. A mere tissue paper became the strategic platform upon which future ideas of the presently leading furniture platform were outlined. Having a decade worth of experience at eBay India where Murty served as the country manager and Shah headed sales and operations, the two took the decision to establish in early 2011.
During that time, the platform’s primary focus wasn’t furniture and it had also focused on a vast range of categories that included lifestyle items such as jewelry, fashion as well as clothes.
As confirmed in an interview with NextBigWhat, the platform chose the name Pepperfry with the intention of reflecting the company's business attitude.
“When we were hunting for a good name, we asked ourselves what’s truly Indian? We came up with spices. Hence pepper. It’s truly Indian! We added fry to bring fun element. But it was sounding like a foodie brand. So we went and talked to folks who have built successful foodie business. We interviewed the owner of Britannia Restaurant (famous Parsi joint), Bade Miyan etc and we asked them how they built business, what Pepperfry means to them. We made videos of these and Pepperfry TV is a way for us to explain who we are.”
- Ambareesh Murty, Cofounder, Pepperfry
Business Model of Pepperfry
The platform primarily operates on a managed marketplace type of business model in which the small and medium business artisans and merchants sell their merchandise via the platform. In this type of model the category team of the platform collaborates with the sellers and after complete checking they obtain certain items through the sellers.
Following this, the items are later sent to studios to execute photoshoots. After this, the pictures of the items are organized and situated on their website. Once an item has been ordered for being sold it is carried to the warehouse of the platform from the sellers, the item’s quality is overseen and it is packed and dispatched from the vendor to the customer.
The Business Model of Pepperfry
From the year 2014, the platform introduced some alterations in their business model by setting up their retail stores, which are called Pepperfry studios, across cities.
Pepperfry Recent Growth and Future Plans
As per Entrackr’s calculation, Pepperfry’s platform presently stands at an estimated valuation of $462 million after its Series F round.
The platform’s online business has escalated to 120 percent of pre-lockdown levels, which shows the rising adoption of e-commerce features by the users.
"This growing transition from offline to online is not only restricted to tier 1 cities but is also penetrating into more traditional markets in tier 2 and 3 cities. In fact, Pepperfry's first-time buyers (FTB) numbers grew at a faster rate than repeat buyers in Tier-2 cities. Our FTB business contribution increased nearly 500bps for tier-2 cities and beyond,"
- Sanjay Netrabile, CTO, Pepperfry
The culture of work from home has prompted a great degree of demand for home-office furniture, a category which accounts for almost 25 percent of the overall sales volume of Pepperfry, presently. It had contributed to 10 percent before the pandemic induced lockdown. As the consumers spend more time at their homes they’ve started focusing on enhancing their home surroundings, aiming to make them more artistically pleasing alongside functional.
The platform has also recently added the augmented reality (AR) features onto their app which allow customers to virtually situate the furniture in their homes and then make their choices accordingly.
As confirmed by the Economic Times, while presently the platform has been listing national players and manufacturers of furniture and home décor items, in this year it is on the lookout for regional and local players to sell on the platform in order to bring more variation in its inventory The platform aims to to collaborate with 150-180 suppliers as 2020 nears its end.
As confirmed by Mint, the company is also planning to go public in the coming year.
“ We are gunning to file for an IPO in 12-18 months. For an IPO, a track record of at least 6-9 months of profitability is important to show the business is capable of making money. Over 6-12 months, we will focus on not only profitability but will also use the opportunity to grow. There is no scope for complacency, and we need to execute the way we have all this while."
- Ambareesh Murty, Cofounder, Pepperfry
Pepperfry has raised more than $230 million so far from all its funding rounds.
The latest funding the platform secured was $40 million which it secured in a Series F round which was headed by Pidilite Industries, an adhesives manufacturing company, as confirmed by Entrackr.
This new capital for the platform has emerged after nearly 2 years. Prior to this back in March 2018, the platform had raised around $35 million in a Series E round headed by State Street Global Advisors.
Before this round, back in September 2016, the platform had obtained $30 million in a Series E round which was headed by Goldman Sachs and Bertelsmann Investments.
The platform’s Series D funding round occurred in 2015 when it hoisted $100 million in a funding round headed by Goldman Sachs Group Inc. and Zodius Technology Fund.
Pepperfry also hoisted $15 million from Bertelsmann India Investments and Norwest Venture Partners in its second round of funding.
The platform’s very first funding was $5 million which it obtained from Norwest Venture Partners.
Pepperfry’s platform has ventured its way into both the online and offline operations and has established stores all across the Indian nation. The online ecommerce venture has managed to establish a prominent position in the furniture industry’s market and its position has not shaken in spite of the heavy competition it has faced among all the other platforms exploring this industry. The platform shows massive potential of flourishing and rising further in the future.