Pepperfry, Urban Ladder battle each other & demonetisation

The leading online furniture stores Urban Ladder and Pepperfry have big plans. Urban Ladder has taken a lot of steps in the recent past to move towards profitability. They include:

• Changing to a single brand model from the earlier marketplace model,
• Opening a store on Amazon,
• Works to reduce costs by eliminating TV ads,
• Concentrate on interior design and home improvement range, and
• Add customer experience centres and pop-up stores.

Now the company is planning a set of moves to strengthen its position, including:

• Modified its returns and cancellation policy. Senior VP Kaustabh Chakraborty says, “We have stopped cancellation on décor and have implemented a strict seven-day window for accepting returns on furniture. We are also digging into data on the brand and customers. Sometimes customers just want a different product from the catalogue and we give them Urban Ladder vouchers.”
  
• Reduced its turnaround time to 5 days in Bangalore, and
• Raised capital worth $ 77 million from investors Kalaari, Sequoia, and Steadview.

Likewise, Pepperfry has had its share of events including:

• Raised Rs. 210 crores from investors to develop experience centres and better its logistics,
  
• Launched modular kitchens to reach greater audience, and
• Plans to introduce concept studios to give customers home improvement tips.

The company intends to break even by FY 2018-19 through furniture refurbishing and servicing. The company believes that discounting helps purchase. Co-founder Ashish Shah says,

“If you look at category we make upwards of 45% of margin in our business. The product that we sell there is no MRP or price tag to the product. Discounting is a way to deliver value to the customer.”

Furniture woes

The demonetisation buzz has doubtlessly affected furniture as well. Pepperfry recently held a ‘Cash me not’ sale where it gave 51% discount on online payments. Kashyap Vadapalli, the company’s CMO said,

“discounts and campaigns are helping in reviving sales.”

Anil Kumar, founder and CEO of RedSeer says that gross margins in furniture are good. He says,

“The problem they face is in generating sales volumes. The problem they face is mainly of scalability that can lead them to complete profitability.”

The industry’s counter moves ought to help even that out.