Despite stiff competition, how Pepperfry plans to retain pole position

The online furniture firm says it will stick to four-pronged growth strategy

Pepperfry, the country’s largest online furniture player, has chalked out an expansion plan to tap the growing demand, especially in non-metro towns, for furniture in the Covid times.

The recent acquisition of its biggest rival Urban Ladder by Reliance Retail for Rs 182 crore would mean more competition for the Mumbai-headquartered player, which is planning to go public next year. Its Co-founder and Chief Executive Ambareesh Murty, however, feels competition is always good. “It’s great that they’ve ente­red the space because more competition is always good.” 

Another major competition brewing for Pepperfry is from Swedish furniture retailer IKEA, which is planning both online and offline expansion in India. The company is planning to bring its Ingka Centers in India as part of its global expansion strategy. The Ingka Centers own 45 shopping centres in China, Europe, and Russia.

Despite the challenges, Pepperfry says it will stick to its four-pronged strategy — omnichannel, supply chain, technology, and brand building — to build its business deeper in India.  

Under its omnichannel journey that started in 2013, the Pidilite-backed company has around 60 experience stores in more than 20 cities. It would cross 100 by the end of next year, hopes Murty. There are no sales done through experience centres. These are only to provide consultation and advise to potential customers on the look and feel of furn­iture for their homes and offices. 

What separates Pepperfry from others in the organised furniture market is its in-house supply chain. “We have our supply chain which is a big determinant to measure success in this category. This supply chain has held us in great strength even during the pandemic as we were not reliant on anyone else for delivery, which was a big differentiator,” he said. 

The company delivers in over 300 towns, leveraging its supply chain to fulfil demand in these regions. It plans to add 8-10 new fulfilment centres to its existing suite of 23 wareh­ouses spanning a total of 1 million square feet. 

Pepperfry’s R&D team is working towards augmented reality and virtual reality technologies to blur the lines between offline and online. In the next 6-12 months, it is planning to come up with virtual rooms on its website, which could be designed according to the taste of the buyer before making a final purchase decision.

With people spending more time at homes, the demand for furniture has gone up by 1.3 times as compared with pre-Covid level since July. The $20-billion market in India is dominated by unorganised sector, which accounts for over 85 per cent of the overall market, but experts feel that post-Covid the degree of the organisation of the market will increase following the e-commerce boom.

Pepperfry sells its house brands exclusively on its platform and does not have any tie-ups with e-commerce majors, but it is open to such partnerships in future. “If opportunities open up, we might look at them. One should always collaborate with business partners.”

Its eight private labels make 50 per cent of the total business and it hopes to add a few more sub-categories in the segment in a couple of months.