We recently covered the $5mn funding news of Pepperfry, an ecommerce initiative started by Ambareesh Murty and Ashish Shah. Before starting Pepperfry, Ambareesh Murty earlier worked as country head for Ebay India and Ashish Shah as Head of Ebay Motors-India and Philippines.
Here is a QnA with Pepperfry team on the initiative and their outlook towards the ecommerce industry.
Pluggd.in: Why are you selling non-standard products? Why not start with electronics which is the highest selling category.
Ambareesh: Essentially, Pepperfry is about lifestyle products which we believe offer great value to customers. There is a component of discounted merchandise (deals) on the site, but value USP is much bigger.
Here is how we look at ecommerce business. There are primarily three categories in ecommerce business:
2. Books & Media
3. Lifestyle products.
1 & 2 have few similarities – they are inherently standard products. Customer know about these products fairly well and its okay to say that they are brand new fixed-price product.
3, i.e lifestyle comes in immense variety, is inherently an unstructured industry.
When it comes to online space, tech products are really huge. Lifestyle hasn’t scaled. Having said that, the share of wallet in lifestyle is MUCH higher than tech products (in organized).
Just to give you an idea, size of tech (organized retail) is close to $6Bn, that of books & media business is 1Bn$ and the bigger piece, i.e. offline/organized/retail is 35Bn$.
If consumption were to be tracked, (1) and (2) has been replicated in online space, but not (3), i.e Lifestyle business. And that’s our bet. We have built mechanism of structuring information through inherently unstructured info.
Pluggd.in: What kind of mechanism are we talking here?
Ambareesh: Let’s break this down into categories. What online can cater to is repeat purchase of known brands. Let’s talk about furniture buying process. Here is how offline furniture buying experience pans out:
1. You are shown product catalogue.
2. You still don’t get to see the final product.
3. When you order, you order based on the catalogue (but you haven’t yet seen the product).
4. In offline, you have to wait for 3-4 weeks, but we ship it in 2 weeks.
We are sourcing operations from Jodhpur (which is known for its wooden product) and we have very tight control on sourcing. Similarly, in jewellery – when its not readymade available, its made for you and ship in 7-10 days,. What also counts is certification. We are offering certification in order to help build the trust and also matching/bettering the offline experience.
Pluggd.in: Non-standard products mean lack of standard/anchor pricing, which could also mean losing trust.
Ambareesh: Firstly, we believe that transparency would work. When you see our view item page, we state the price of the gold, we state weight of the product, details of of diamonds/gemstones/used, we will upfront tell you our labor charge also.Transparency helps the customer makes judgment. so we mention these prices instead of just giving a cumulative amount.
Secondly, Benchmarking: So if you are looking to buy furniture, we’d guarantee that all furniture you buy from us will be authentic/wooden. We are able to achieve pricing owing to sourcing.
The biggest piece in lifestyle product is managing information (unlike standard products). No such catalogue for lifestyle products exists. Biggest challenge for us was to structure the unstructured information and hence we decided to do all piece of content ourselves. For instance, we do all of our product photo shoots by ourselves (so that customer gets a wider perspective). We write descriptions by ourselves (done by merchandising team, mostly from NIFT).
Pluggd.in: How are you handling logistics/payment? Building own logistics service?
Ambareesh: Logistics has 4 components
1. Sourcing: its all done in-house.
2. Storage/warehousing: we have 3 locations where we warehouse from (Delhi, Jodhpur and Mumbai).
3. Packaging: We believe that the moment of truth for any service is how customer receives the product, the packaging etc. Hence we own this part.
4. Shipping: We have partners to handle the shipping part.
Pluggd.in: Brand building – now that there are brands like Flipkart/Snapdeal/Yebhi etc etc. – what’s your target base?
Ambareesh: The first thing we are focusing is to build a great customer experience. I think great businesses will be built by virtue of repetitive customers which then adds to NetPromoterScore.
We will explore the entire channel/media mix, but our goal is simple : what’er folks we get in, they should have a great experience and he/she should tell this to their friends (i.e. WoM/Word of Mouth).
Pluggd.in: What’s Pepperfry TV? What about Pepperfry name?
Ambareesh: When we were hunting for a good name, we asked ourselves what’s truly Indian? We came up with spices. Hence pepper. It’s truly Indian! We added fry to bring fun element. But it was sounding like a foodie brand. So we went and talked to folks who have built successful foodie business. We interviewed owner of Britannia Restaurant (famous Parsi joint), Bade Miyan etc and we asked them how they built business, what pepperfry means to them. We made videos of these and Pepperfry TV is a way for us to explain who we are.
As far as launch date is concerned, Pepperfry will go live next week.
What’s your opinion on Pepperfry’s focus with respect to lifestyle products? Is the mass market ready for an initiative like this?
Image credit: Sameer