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Online furniture and home products marketplace Pepperfry has allocated $10 million to acquire — or make strategic investments in — companies that will improve its efficiencies and widen its customer offering.
“We are looking to make strategic investments in, or acquire, companies that synergise with our business, in the areas of supply chain, augmented reality and those that can help us build local designer ecosystems in cities that we are present in.
“We are in advanced stages of talks and expect to close two deals in a couple of months,” Pepperfry founder-CEO Ambareesh Murty told BusinessLine .
In the last three months, Pepperfry clocked 350 per cent year-on-year growth to ₹750 crore, of gross merchandise value (GMV), and is confident of exceeding its target of ₹1,000 crore in GMV by March 2016.
According to UK-based web traffic ranking site SimilarWeb, Pepperfry attracts traffic of 3.6 million monthly visitors, which is more than the combined traffic of its rivals Urban Ladder (1.5 million) and FabFurnish (1.4 million).
It has been ranked second in web traffic globally after Ikea.com in the furniture category.
Fund raising Pepperfry offers 11,000 SKUs in furniture alone, has 4,500 active sellers on its platform and serves pin codes across 500 cities. The company has raised $128 million in funding, of which $100 million came in the fourth round, in July, led by Goldman Sachs and Zodius Technology Fund.
“We have established a clear lead over competition in the last 12 months and are confident of scaling even faster in the next 12 months” said Murty.
The company has earmarked a marketing budget of ₹200 crore for 2016, which will be spent on brand building and performance marketing including internet and mobile.
While the average order value on Pepperfry stands at ₹16,500, the average selling price of an item is ₹11,500.
The company has opened six brick-and-mortar stores spanning 2,500-3,500 sq ft across the country and will open four more, one each in Hyderabad, Chennai, Terminal 2 Mumbai and Bengaluru, by March.
Pointing out that online sales of furniture and home products has grown from sub-$100 million last year to $300 million this year; constituting a small fraction of the country’s $20-30 billion furniture and home products market; Murty said Pepperfry today accounts for nearly 50 per cent of the market.
Asked about competition from Flipkart and Amazon, which entered the space recently, he said: “Large horizontal players have just expanded the market for speciality players like us.”
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