By Asmita Dey
Online furniture and home decor retailer Pepperfry is looking to raise anywhere between $150-200 million to fund its offline store and product expansion, Ashish Shah, founder and COO, told FE. Since it set shop in 2011, the retailer has raised close to $200 million.
Pepperfry’s losses at Rs 106.72 crore in the year to March 2018 were only slightly short of the revenues of Rs 128.51 crore. In 2016-17, losses totalled Rs 128.89 crore, higher than the revenues of Rs 114.98 crore. However, the company reported an operating profit of Rs 97.4 crore in 2017-18, higher than the Rs 88 crore reported in 2016-17.
The Mumbai-based firm is planning to open over 100 offline stores across the country in the financial year beginning April. “Our overall store count by the same time next year would be around 150,” Shah said. While close to 85 of the 100 stores would be managed and owned by Pepperfry, 15 stores would operate under franchise model, he added. Franchise arrangements for opening stores in Guwahati, Siliguri, Surat and Raipur have already been signed.
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Pepperfy currently has 42 offline stores in 20 cities. Pepperfry’s offline stores act as experience centres that allow customers to choose the product of their choice and place the order online.
Shah said the strategy to increase the offline store count is aimed at being accessible to more consumers. The stores have led to repeat purchases by customers, he claimed.
The new stores will be located within a radius of five to seven kilometres from establishment. “Our plan is to move closer to demand and not worry about being on the high street. My goal is that my customer does not need to travel more than 5-7km and that is my expansion plan. The idea is to reach customers in all possible access points,” Shah said.
The firm hopes to garner about 40-45% of its total online sales from the stores once the count goes up to over hundred. Currently, offline stores contribute around 30% of total sales online, Shah said. “My studios drive two and a half times my average order value compared to online business,” Shah said. “People who buy from stores, actually repeat 1.8x more than the online customers. We build more trust with our customers through our omni-channel business,” he added.
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Pepperfry’s expansion drive will not just be limited to India. The retailer is also eyeing launch of international operations and aims to open its first overseas store in Australia. “Sydney and Melbourne are the first two markets we want to target. In the next three to four months, we should be ready for international launch,” Shah said.
On the product side, Pepperfry is looking to expand significantly, Shah said. In the furntiure segment alone, the product count available on the website will double in the next three to four months. The firm will also expand the listings and colour palattes of its in-house brands, Shah said.
“The ambition really is to become a billion dollar company very soon. We aim to be a billion dollar in the next 1.5-2 years and to become a multi-billion dollar company by 2023,” Shah said.
