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Furniture and home products marketplace, Pepperfry has cut down its losses by 42 per cent at ₹138.94 crore in FY ended March 31 2018 compared to 20 per cent at ₹240.69 crore in the previous fiscal. Total expenses declined by 13 per cent at ₹452.84 crore in FY 2018 over the previous fiscal.
The reduction in losses were fuelled by increased staff productivity, supply chain automation, enhanced vehicle utilisation, investments in smart tech, expansion into multi-categories within house-brands and enhanced modular furniture offering, among others.
“We are reaping the benefits of scale now and ended fiscal 2018 with ₹1,500 crore in GMV. Our business continues to grow, especially after GST rates were brought down from 28 per cent in June 2017 to 18 per cent last November. While we are expecting business to grow at 80 per cent in this Oct-Dec festival season quarter, however, we have added 75 people in our warehouses to support this growth.” Ashish Shah, founder and COO, Pepperfry, told BusinessLine .
The company’s revenue from commissions on transactions grew 20 per cent YoY in FY 2018 at ₹308.46 crore, up from ₹257.96 crore in the previous fiscal.
Budget control
Pointing out that the company’s truck utilisation rate has grown to 95 per cent, successful delivery rates have shot up to 92 per cent, staff productivity increased multi-fold, investments in technology, with augmented reality features and interactive 3D product catalogues generating more business, Shah said, “We achieved a further 17 per cent YoY reduction in overheads through tight budget controls.”
Pepperfry’s omni-channel execution with 37 Pepperfry Studios in 24 cities, of which 11 are franchisee stores has paid off, contributing to 25 per cent of its overall sales. Its 10 house brands contribute to 55 per cent of its overall sales. These high margin (55-60 per cent) house brand offerings have been expanded with additions across categories such as mattresses, pillow, bedsheets, carpets & furnishings, lamps & lighting.
Full-stack services
“Our goal is to continue expanding to become a full-stack player in the home interior space including interior designing and home interior projects such as flooring, ceiling, painting, tiling etc, and have hired 100 people for this. We will continue to expand our house brands and foresee the modular kitchen/wardrobe segment as a key opportunity area. We also have international aspirations” said Shah.
Overall, while Pepperfry’s AOV (average order value) across its 1,20,000 products stands at ₹7,000; its AOV for sofas/beds is ₹18,000 and modular kitchens/wardrobes, which were introduced in October 2017, generates an AOV of ₹3,00,000.
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