Aiming to widen its reach, cash-flush Flipkart has initiated talks for a strategic investment in India’s top online furniture marketplace Pepperfry, reports the Economic Times. The e-commerce giant is aggressively looking at expanding its market share and combat global rival Amazon after raising $1.4 billion led by Tencent and another $2.5 billion from SoftBank earlier this year.
The company already has several large acquisitions under its belt, including Myntra, Jabong and PhonePe.
Though there is no certainty yet that the deal will go through, an agreement, should it happen, would give Flipkart the chance to tap high margins, according to the daily. The furniture market comes only second to the online fashion industry in terms of margins.
With a 65 per cent share of the organised online furniture marketplace, Pepperfy makes approximately 45 per cent gross margins through the sale of appliances, furniture, home decor, among others.
delivers to 84 cities across India and has begun to open offline stores, where a customer can select items and purchase it online. If the deal settles, Flipkart will gain access to Pepperfry’s 100,000 items of curated merchandise from about 10,000 merchants.
On October 30, Flipkart and Decathlon announced a strategic partnership to bring the sporting goods company's entire selection of fitness products, sports equipment, clothing, footwear and accessories to Indian shoppers. (More details
The sports and fitness industry in India is estimated to be worth $1.8 billion, while the online penetration in the category is currently pegged at only 7 per cent.
Flipkart, which registers margins of 20-40 per cent in its fashion business, was also in talks with Kishore Biyani's Future Lifestyle Fashions to list 20 brands of the offline retailer exclusively on Flipkart. The announcement came after Amazon picked up a five per cent stake in Shoppers Stop for Rs 179.25 crore. (Full report
As part of its diversification, Flipkart is said to be in talks with multiple firms like online food-ordering and delivery service Swiggy, home services firm Urban Clap, online furniture retailer Urban Ladder, ticket-booking platform BookMyShow and even some financial technology firms, according to Live Mint
Flipkart claims it has captured 70 per cent of India’s e-commerce market after seeing huge success in the recent festive sale period, and is almost twice the size of its rival Amazon. (Read more
The revenue margin of Indian furniture market was pegged at $900 million in 2016 and is expected to cross $1.1 billion this year.