Pepperfry.com, the online furniture marketplace recorded logistics cost of R4 crore, per month in FY16, Ashish Shah, founder and chief operating officer of Pepperfry told FE. The company uses its in-house logistics team of 1,000 people for all its deliveries across 500 cities and is spending R400 on every order, added Shah. The company has reduced the same from R3,000 per product in 2012.
In order to ensure quality and efficiency in the delivery network, Urban Ladder also launched its in-house logistics team in 2012 and is currently servicing 18 cities through 23 delivery centres in the country. Meanwhile, Pepperfry is servicing 500 cities through 17 distribution centres.
According to Kaustabh Chakraborty, senior vice president of operations, Urban Ladder said that the company has reduced its logistics cost by 40% in the last four years. He declined to share cost of every order but said that it is below R1,000.
Pepperfry earns a commission of about 35% on every order from its merchant. Every month, it sells about R45 crore worth of hard furniture pegged at average ticket size of R17,000-R18,000 and R30 crore worth of home décor and kitchen appliance products pegged at average ticket size of R4,000 to register monthly sales of R75 crore on the platform. The company is expected to become profitable in the first quarter of FY19, Shah added.
The cash-on-delivery orders for the company are less than a percent which is only permitted for order below R4,000. The cancellation of orders is as low as 2% which includes products which were damaged in transit, according to Shah.
Recently, Pepperfry opened its 10th studio in Kirti Nagar, Delhi which will not drive sales for the platform but will function as a experience store which the customers can visit before making the purchase.
“The studios are not sales point for the brand. They are a customer interaction points where our goal is to help them by providing complimentary advisory related to interior design and empower them to make the right decision,” Shah explained. Besides Delhi, Pepperfry has studios in Mumbai, Pune, Gurgaon, Chennai, Kolkata and Bengaluru.
By the end of March 31, 2016, 7 of the 10 Pepperfry studio were operational and the company had invested close to R10 crore in the studios and spent R2-3 lakh every month on each of the studio and will be making similar investment for next 10 studios by end of December.