Pepperfry, the online marketplace for furniture, posted a wider net loss of Rs 194 crore for the year ended March 31, 2022, versus a loss of Rs 106 crore a year ago.
The company’s total expenses were up 40% at `458 crore driven primarily by the rise in brand and marketing spends, which were up 79% to nearly Rs 130 crore. Pepperfry invested in marketing and brand particularly in the second half of the last financial year to rapidly accelerate growth as markets opened post the second wave of Covid to re-base the business and drive traction, the company said in a statement.
A focus behind expanding its reach in tier 2 and 3 cities resulted in the Pepperfry Studio network doubling the reach over 140 studios by March 2022.
Employee benefits, excluding ESOPs, were up 57% at Rs 71 crore, while the company’s ESOPs declined by 42% to Rs 9 crore. Logistics costs increased 20% about to Rs 93 crore during the year. Finance cost was up 28% at Rs 23 crore.
The revenue from operations increased 23% during FY22 to Rs 247 crore. GMV (gross merchandise value) on the platform was up 33% year-on-year at Rs 1,185 crore. Offline customers who visit Pepperfry Studios accounted for 36% of the company’s business. The growth in Studio also resulted in an increase in the share of higher margin D2C Private Labels, which reached 41% of GMV in FY22.
In supply chain, Pepperfry invested in seven new distribution centres. The net promoter score was maintained at 73 and delivery timelines were reduced to less than 10 days across India.
Pepperfry is going aggressive on expanding its offline footprint, though keeping it asset-light as it is betting big on the franchisee model. The company recently told FE that it is expected to become profitable in the financial year 2022-2023, while its initial public offering (IPO) of $200-250 million is in the works.
Commenting on the performance, Ambareesh Murty, co-founder and chief executive officer, Pepperfry said, “With the worst effects of Covid behind us in the latter half of FY22, we invested behind our brand and supply chain, expanded our leadership team, and seeded new business segments such as mattresses and modular furniture. I am confident that these investments have set us up well to drive Pepperfry’s next phase of growth.”