Online furniture portal, Pepperfry recently launched their campaign ‘Don’t wait till Diwali, buy furniture any time on Pepperfry’. The ad highlights the proposition that there is great value available on the site and customers need not postpone their big ticket purchases to events like Diwali.
The campaign comprises two creative executions which are being aired across television channels, multiplexes and digital media. According to media reports, the total outlay for the month-long campaign is Rs 10 crore.
Pepperfry has further scaled its operations and is seeing significant contributions to revenue from its physical stores. It has also plans to double the store count to 16 by the end of this year. Eight Tier-1 cities contribute to almost 80 percent of its business and the company is expecting to hit Rs 2500 crore in GMV by March 2017.
We spoke to Mihir Kulkarni, Head, Brand & Retention, Marketing, Pepperfry on the brand’s latest campaign, their festive plans, budget allocation, size of the furniture market, challenges in this space, competition from IKEA and others…
Your latest campaign ‘Don’t wait till Diwali’ is quite similar to the previous year’s campaign. How do you benefit by being the first one to launch any festive communication?
When it comes to shopping for consumer durables, consumers typically associate festivals and key occasions with value delivery; they believe that they will get better discounts during such occasions. Pepperfry is different; we work with more than 10,000 manufacturers directly and we have our own logistics fleet to deliver furniture across cities in India. So we are able to deliver value because we work directly with our sellers all year around and we want to communicate this proposition to our consumers. That is the reason- our campaign – Why wait for Diwali—is a property, which we want to cultivate going forward and associate with the consumers on a regular basis, rather than limit ourselves to event or occasion led communication.
What are your marketing plans for the upcoming festive season?
We have our plans for the festive season in place. We will launch our other campaigns as we approach the season for the remainder of the year. For us, the festive season starts around June-July, and typically, it is the same across the industry where the second half is much more active than the first half. Our offline campaigns which we have been doing for the past two years now has helped in pushing the brand’s awareness level among our TG.
How much budget have you allocated for the festive season marketing?
I wouldn’t be able to share the exact figures but our marketing budget is always in line with the growth which we see. Since we started, we have grown three times year-on-year in terms of our market growth; we see no reason why that will change this year.
What is the size of the furniture market in India?
The overall furniture retail market in India would be around Rs 65,000 crore to Rs 70,000 crore in value. About 85% of this market is unorganised; a lot of Indians get their furniture done by carpenters, local market and from small shops. It is this portion, where we see a large opportunity. Converting the unorganised market into the organised market is something which Pepperfry aims at achieving. Over the last five years, we have seen significant growth and our vision is to reach 20 million consumers by 2020.
With IKEA coming into the market next year, do you see it as a threat?
I feel that with other players coming into the market, there is an opportunity to convert the unorganised market into organised market. With new entrants entering, it will only help us achieve it at a faster rate. To us, it is more of an opportunity rather than a challenge. It is about growing the pie when everyone pitches in together.
How many physical stores does Pepperfry have?
We have 8 physical stores across 5 locations currently and we have an expansion plan in place. We plan to double our store count to 16 this year.
Has there been a significant contribution to the revenue from these stores?
These are experience centres rather than retail outlets for us and these stores have turned out to be the ‘best marketing channel’ for the company. It gives customers the experience of what Pepperfry has to offer. It helps them to understand and get a touch and feel of the furniture that can be delivered. It helps them get assistance in terms of what they can choose on the website. We see convergence happening online as well because the customer finally ends up buying online.
How will you classify your TG?
The modern Indian consumer, 25-45 years of age, typically living in metros, who have an evolved taste when it comes to furniture shopping and is also a regular shopper on the internet and wants to go beyond the functional furniture.
Are you planning to enter the other markets, like the tier II areas?
We have seen appreciable growth in tier II markets as well. Right now our strategy and focus is on the tier I markets because that is where we see a large push in sales coming from. But at the same time, we have seen an uptick from the tier II markets.