Managed marketplace model augurs well

Online furniture retailer Pepperfry.com, which started out as fashion and lifestyle portal, said it was seeing significant clicks in the home assortment category as more people were shopping for “non-standardised” products online.

“We shifted to furniture retailing after insights revealed that consumers were buying bulky items like beds and side tables online. Since these are non-standardised products, it gave us better gross margins. Additionally, the ticket size is also much higher,” said Kashyap Vadapalli, Chief Marketing Officer.

The three-year-old company has $13 million investment from players such as Norwest Venture partners and retails over 45,000 products across categories, such as furniture, home décor, furnishings, kitchen, fitness and pet supplies.

Pepperfry competes with other ecommerce players such as Urbanladder, Fabfurnish and Zansaar. In India, the overall furniture and home market is around $20 billion, but is fragmented and unorganised with a few national brands.

Vadapalli said the company improved its products offering to suit the needs of the online customers. He said the company had tied up with over 1,000 small and medium entrepreneurs to cater to consumers in the furniture category.

The company does not offer ‘cash on delivery’ option in furniture. Several retailers have been incurring heavy losses on account of cash on delivery as a mode of payment. Ashish Shah, COO & founder, Pepperfry.com, said the company worked as a managed marketplace model by late 2012.

Pepperfry does not stock any inventory. It has four fulfilment centres where all products arrive and are shipped. The fulfilment centres are in Mumbai, Delhi, Jodhpur and Bangalore.

On its site, the portal lists the products of its merchants. Once an order is placed, the merchant sends the products to the fulfilment centre which are checked for quality, packages and sent to courier companies for delivery.

Shah said the managed marketplace model is auguring well for it as several merchant partners are selling products in various categories.

For its products, Pepperfry has set up a network of merchants and artisans.

(This article was published on February 19, 2014)
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