Pepperfry was started by two friends – Ambareesh Murty and Ashish Shah – who had a common vision: “to be the place where modern Indians shop for their homes.” To find out more about this promising and rapidly growing enterprise, we interviewed Hussaine Kesury, chief category officer, Pepperfry. Excerpts from the interview:
How is the Indian home decor market growing? Which segments or trends are driving the growth?
India’s furniture market looks promising with a projection to cross $32 billion by 2019, according to a TechSci Research report. While the total offline market is growing at 10-15% YoY, the online component is growing at 300% YoY. Over the next few years, we expect the online home and furniture (H&F) business to become 9% of overall ecommerce segment, and 6% of the overall H&F market.
FURNITURE SALES DOMINATE
Pepperfry’s furniture sales currently contribute 80% of the total revenue, while the decor and utility business contributes about 20% of sales and 70% of the transactions.
Pepperfry provides customers a differentiated choice through its diverse portfolio of 1.2 lakh products across categories like furniture, home decor, lamps and lighting, furnishing, kitchen and dining, housekeeping, and hardware and electricals.
In the furniture segment, bed, coffee table and shoe racks are a popular choice, while in the nonfurniture segment lamps and lighting is the largest category followed by mattresses, dining and baking, and hardware and electricals.
Are Indian consumers accepting the online furniture segment?
Today close to 90% of the furniture market in India is unorganised and the customers are dependent on offline/ carpenter services to furnish their homes.
However, post the initial inertia, the number of people shifting to online mediums for furniture shopping is rapidly increasing.
The early adopters, tech-savvy and progressive customers have taken to online furniture shopping as it offers them easy accessibility, convenience and diverse variety of products, providing customers with more choices.
CHANGING CONSUMER BUYING BEHAVIOUR
Pepperfry being the market leader in the online furniture segment, has played a key role in changing consumers’ buying behaviour, thereby helping build the organised market digitally.
We aim to convert this vast majority to online customers by scaling in terms of top of mind recall for the brand, expansion of our omni-channel footprint, providing full-stack homeset-up solutions, developing a robust big-box supply chain network etc.
Pepperfry offers a wide range of 1.2 lakh products, including top brands and house brands, which cater to specific product requirements of customers.
While our website elaborates on each of our merchandise through an array of static images and product detailing, we also recognise the need to touch and feel a high-investment item like furniture, which is why we have launched our experiential studios across the country.
These unique concept stores allows consumers to experience the material, quality and make of the product and the design experts at the studios offer free in-store design consultancy on furniture products ensemble to furnish homes that are aspirational.
What are the major challenges for the furniture market and especially online ventures in the segment?
A major problem we faced was the under-developed logistics infrastructure for large items. Initially, we used third party services, but soon realised that reliance on them proved to be either too expensive or took too long to deliver which did not adhere to Pepperfry’s promise of providing customers a hassle-free shopping experience.
Therefore, with the objective of standardising the furniture industry and building distribution for large items, we built the country’s largest and robust big-box supply chain network using proprietary hub and spoke model.
Today, Pepperfry has 18 distribution centres across the country and owns 400+ customised trucks with a capability of delivering more than 100,000 large items per month to 500+ towns and cities.
What are the trends for online furniture buying in non-metro cities especially tier-2 and tier-3 cities?
A large number of our metropolitan customers are evolved internet users with a huge inclination towards online shopping and prefer to do their research online before they move on to the purchasing decision.
Even though they visit an offline store, it is the last step in their journey before purchasing the product. Therefore, in these markets, our marketing and communication strategy is primarily via digital media, with a strong focus on smartphones and we invest heavily in pull-based channels like search.
However, we observed that in non-metro cities online shopping penetration is lower. They prefer to first visit the physical store to research about the products and then purchase it via online mediums.
Hence, in these markets, we often use TV and other offline channels as the lead medium. In addition, our studios become the main channel of introducing the brand to the market and we have witnessed a steep rise in the town’s business when we open a store in such cities.
Is Pepperfry planning to come out with major changes in the market?
Pepperfry is India’s leading online home and furniture marketplace with many firsts to its credit. While omnichannel has become a buzzword now, in December 2014 we launched our first studio in Mumbai thereby pioneering this effort.
EXPANDING THE REACH
With 30 studios across the country presently, we aim to expand our reach and open 70 by April 2019. The studios currently contribute to 25-30% of our overall revenue.
Every customer has a distinct requirement and to address their needs, we introduced 10 house brands that cater to a wide range of design and style specifications of consumers, and contribute to 50 per cent of the overall business.
For example, the Woodsworth collection is characterised by a timeless classic range of furniture, whereas
Bohemiana collection blends the free-spirit of the eclectic with the rigid framework of the industrial piece.
We believe that AR/VR technology is a game changer in the online furniture segment and therefore decided to invest in it early on. Customers shopping online face issues like how the product will look or fit in their space, both physically and aesthetically.
Pepperfry addresses this specific customer need through enhanced augmented reality feature on our app, which allows them to zoom into products, drag and place them against their room set-up, or their walls giving them a choice to easily mix and match the products with their home interiors.
With high definition imagery, clutterfree layout and user-friendly options, the feature simplifies the process of buying furniture online.
We are currently focusing on developing innovative and cuttingedge technology, which will provide the best in class online furniture shopping experience to the customers.
We have also forayed into furniture rental segment aimed at millennials who are constantly moving job and cities. The service which was launched across nine cities – Mumbai, Bengaluru, Delhi, Gurugram, Hyderabad, Pune, Chennai, Noida and Ahmedabad – offers 1,200 options at affordable rentals for a period of 6-12 months.
In September 2017, we made our mark in a furniture exchange programme across select cities through which customers can exchange their old furniture with greater flexibility and convenience within 48 hours of placing a request on Pepperfry.com.