Online furniture and home product marketplace Pepperfry has set up a target to achieve break even over the next three years. Around the same time, the five-year-old startup is expecting a GMV of around Rs 3,500 crore.
Ashish Shah, founder and COO, Pepperfry shares, “Having already achieved our December 2016 GMV of Rs 1,000 crore as early as October we have now set ourselves to the path to profitability. We expect to see the company to breakeven sans marketing costs in the next few months, covering all costs like payroll and supply chain. Since inception, Pepperfry has built a market leadership as the largest furniture marketplace by offering great value, a large variety of curated merchandise with an over 1 lakh items from over 10,000 merchants.”
Shah is currently looking at improving the gross margins and achieving scale to achieve their target. “We clocked annualized gross sales of Rs 1,000 crore and are aiming to triple this in the coming years.”
Shah also added that the higher growth in the recent months was aided by many initiatives, one of them is the interest-free, with no processing fee EMI option launched recently, which effectively offers 12-15 per cent savings on purchases. The company has reportedly tied up with close to a dozen credit-card issuers for this scheme.
So far, Pepperfry has raised Rs 210 crore in Series E funding (held last September) from global investors Goldman Sachs, Norwest Venture Partners, Bertelsmann India Investments and Zodius Technology Fund and will be looking to raise more funds for further expansion over the next six months.
The company which claims to capture 50 per cent share of the online furniture sales market, has plans to grow the customer base five-fold to 20 million by 2020 from the present four million. “The market for online furniture sales will double from $300 million right now to $650 million by December 2017. Currently we have around a 50 per cent share of the market. We have plans to grow the customer base five-fold to 20 million by 2020 from the present 4 million.”
Pepperfry’s offline stores and technology are its other focus areas. Shah explains, “Ramping up our studios is a key focus. We will be nearly trebling physical presence through brand studios from the current 13 to 36 by the end of this year. Technology is another area where we want to focus and expanding the delivery network to 1,000 cities is the business plan for the next two years.”
According to Shah, the Pepperfry Studios have managed to achieve what aimed for, “The basic purpose of studios is to offer a touch-n-feel to customers and no sales happen at the studios. They have been doing well with almost 25 per cent of visitors converting and ordering online.”
Pepperfry has reported to process over 4 million shipments creating, and reaches out to 500-plus cities. It has 18 fulfilment centres spread across the country and 40 trucks covering over 500 cities and a 3 lakh sqft depot at Bhiwandi.