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Backed by a fresh fund raise of ₹210 crore from existing investors — Goldman Sachs, Bertelsmann, Norwest and Zodius — furniture and home products marketplace Pepperfry.com has set a new target of tripling its GMV (Gross Merchandise Volume) to ₹3,000 crore by March 2018.
To achieve its target, the company plans to add 300 personnel in its customer support, supply chain and technology departments, to create a 1,000-strong team over the next 12 months.
Investments are being made to ramp up Studio Pepperfry’s footprint, from 10 Studios in six metros (three were recently opened in Chennai, Hyderabad and Delhi) to 17 Studios by December, at an investment of ₹10 crore.
A marketing spend of ₹25 crore has been earmarked for the Diwali marketing campaign, spanning TV, digital, outdoor and radio, to cater to the demand spike during the festive season, which contributes to 60 per cent of the company’s annual sales.
“We surpassed our target of ₹1,000 crore GMV in March and are looking to hit ₹3,000 crore in the next 18 months. While the bulk of the $100 million we raised last year is still in the bank, we needed capital in the bank to make investments today that will fructify over the next two years, to help us achieve our GMV goal and break even sans marketing cost in the next six months,” Ambareesh Murty, founder and CEO, Pepperfry, told BusinessLine .
Murty said 3 million customers have made purchases from 10,000 merchants on the Pepperfry platform. Nearly 100 per cent of the customers who visited Pepperfry Studios bought furniture on its site; plans are on to open Studios in Tier II and III cities such as Kochi, Chandigarh and Ahmedabad in January. Pepperfry owns and operates 17 fulfilment hubs and a delivery fleet of over 400 vehicles, covering customers across 500 cities, which it wants to increase to 1,000 cities.
Online sales of furniture and home décor has grown from a sub-$100 million to a $300-million market, constituting a small fraction of the country’s $20-billion furniture and home décor market.
The new pecking orderPepperfry and Urban Ladder, which have raised a total of $158 million and $77 million, respectively, are the largest players, followed by FabFurnish (now a Future Group company) in the online furniture and home décor segment that is going through a consolidation phase. Mebelkart.com, which was a strong contender for number four position, ceased operations late August, as its parent company AskMe.com shut shop in August.
“The $300-million online furniture market in India is growing at 70-80 per cent YoY and as per our estimate, and will hit $600-650 million in FY2018. Our mission is to help 20 million customers create beautiful homes by 2020,” Murty said.
Data from digital market intelligence firm SimilarWeb reveals that visitors to Pepperfry grew from 3.6 million in March to 4.4 million in August; while visitors to Urban Ladder dipped from 2.1 million to 1.8 million and FabFurnish was almost flat from 1.2 million to 1.3 million, in the same period. According to tracking firm Tracxn.com, there are 200 start-ups in the furniture and home décor space in India of which 22 start-ups have raised a total funding of $252.4 million, as of March 2016.
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