With $15 mn (~ Rs 90 cr) in funding which was raised recently, Pepperfry, the online retailer which sells furniture and home decor, is targeting Rs 500 cr in gross merchandise value in 2015. The company is also planning to turn profitable in the next 12-15 months, its founder & CEO Ambareesh Murty told NextBigWhat in an interview. Edited excerpts.
For a very long time, NVP was the only investor in your company. Now you have a new one. Do you think vertical players are now seeing more investor interest? Is it because of the M&A activity in Indian ecommerce you are seeing now?
Vertical players have very solid features in India. We tend to specialize in both the supply and demand side of the business. Horizontal players typically specialize on the demand side of the business. It becomes a site for eyeballs. It’s not like how you would sell a mobile phone. For example, at Pepperfry in home and furniture, the products are not branded or standardized. So vertical players have to invest in standardizing the quality, experience and such. This is why there is a lot of value for verticals in the Home and Furniture category. Investors are seeing this and business are growing fast.
What kind of growth are you seeing?
Even worldwide, the vertical players dominate the market. In the US for example, there’s eBay and Amazon. But there are large home and furniture online retailers who do more than a billion dollars of sale. We have grown close to 300% over last year and we expect to hit Rs 500 cr in 2015. We are well on the path to profitability. In the next 12-15 months, we expect to become profitable.
Does profitability come at the cost of scale?
It will come from growth. In our business, the supply side is fragmented. Lot of our investments go into it. Supply side investments are inherently scalable in nature. It is not like marketing spend on the demand side. Pepperfry has a differentiated supply side. By the end of this year, we will be 3 times the size today.
Last mile delivery for large bulky items is underdeveloped. In India, it is easy to ship a mobile phone. But if you were to ship a wardrobe or a book case across 2000 kilometers, there is no one who can do it efficiently. And we don’t even charge our customers for this.
Are you in a position to handle reverse logistics efficiently?
What we’ve done is to create a service around this. We can provide a carpenter to help you fix damages immediately.
How much repeat purchases do you see?
In our case, half of the business comes from repeat customers.