After raising $37 million in Series F, Pepperfry moves beyond furniture for profit

Online home and lifestyle store Pepperfry aims to make the new home décor category’s contribution to their overall revenue 35% this fiscal, up from the current 22%.

Online home and lifestyle marketplace Pepperfry announced its Series F round of funding just a few weeks ago. With the newly gained Rs 250 crore ($37 million approximately), the Mumbai-based company is taking the next big step towards profitability. Investing about Rs 9 crore, this six-year-old company, which has so far showcased itself as an online furniture destination, is pushing home décor now.

In fact, their target is to make the home décor category’s contribution to their overall revenue 35 percent this fiscal, up from the current 22 percent.

“Pepperfry has been active in the décor category since its start itself, although our marketing was done with furniture as the hook. But only 14,000 of the 120,000 listings are in the furniture category. Décor today contributes to 65-70 percent of sales, and 20-22 percent revenue (due to lower ASP),” says Ashish Shah, COO, Pepperfry, in an interaction with YourStory.

New steps

So far, Pepperfry has raised $197 million and has established its omni-channel network with 28 studios across 16 cities. Their seven private labels are also available in the décor category.

Pepperfry’s first furniture ad came out in October 2014. The latest campaign, which takes after Pepperfry’s “Happy Furniture to You”, comprises six executions, including Happy Bed Linen To You, Happy Laundry To You, Happy Organiser To You, Happy Serveware To You and Happy Wall Art To You. These highlight different product categories in the décor and utility portfolio.

The décor category is divided into soft décor and hard décor, including lamps, carpets, wall shelves and mirrors, curios, wall art etc. Home essentials under the décor category are utility-related products like kitchen and dining, appliances, bath and laundry, storage and organisation etc. The average price range in the category is Rs 3,500.

Creative focus

According to Ashish, Pepperfry took a year and a half to curate the catalogue itself. “It is important for us, because items like bedsheets are available on horizontal marketplaces too. But we do it differently; we ensure better description for our rich catalogue, and great images to go with each item. We segregate according to print and style,” he explains.

In fact, home décor has always been a major category for ecommerce. A few months ago, ecommerce market leader Flipkart re-launched the furniture category at scale and also unveiled a furniture private label, Perfect Homes. They provide bedsheets and other décor items under another private label, Flipkart Smartbuy.

Bedsheets are one of the first categories most first-time shoppers buy on Pepperfry, as are utility categories like kitchen wipes and hooks.

“They become repeat customers, who may move on to buy furniture,” Ashish says .

Supply chain capabilities

Pepperfry claims that its logistics arm Pepkart is the largest big-box delivery in the country. They currently have their own distribution team in seven cities for order fulfillment (pick up from merchant in first mile for marketplace), large item distribution (with trucks), small item distribution (with bikes), and to provide after-sales’ service (with carpenters).

With an expected hike in demand (and sales) from décor now, Ashish says they will make this available in 12 cities. Currently Pepperfry delivers in 1,000 cities through third-party players.

Pepperfry’s revenue has grown at a CAGR of over 83 percent in the last five years. Besides promoting the decor category this year, they are also planning expansion of Pepperfry studios in Tier II cities, and developing AR/VR technology in preparation for the company's IPO.