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Pepperfry goes complete digital, ups ad spends by 70% over last quarter

The company was badly hit last year amid the pandemic but is now witnessing growth higher than pre-Covid levels. Kashyap Vadapalli, CMO and Business Head, Pepperfry, says they are scaling up marketing efforts and expansion plans, and expecting 50% growth this festive season over last year

Kashyap Vadapalli

Business was completely shut for Pepperfry at the height of the Covid-19 pandemic and lockdown last year. But as markets started to open up, the online furniture store started to gain business and scaled up its operations in terms of both marketing and expansion. In the beginning of 2021, it raised Rs 35 crore from InnoVen Capital to capitalise beyond achieving profitability.

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BestMediaInfo caught up with Kashyap Vadapalli, CMO and Business Head, Pepperfry, to know how the furniture e-com player is generating growth while managing cash flows, and its festive plans.

Apart expanding its portfolio and its physical footprint, it is scaling up marketing initiatives.

In FY 2019, it had allocated around Rs 150 crore for marketing but in 2020 could not spend much because of the pandemic. This year, it is spending 50% more in terms of marketing budgets over last year.

“Compared to the last quarter, we increased our ad spends by almost 60-70%,” he said.

From last year, it had been focusing on digital, social media and OTT and moved away from traditional channels, including television, radio. Now, all spends are directed towards digital.

“In the July-September quarter, we didn’t do anything traditional. This quarter we might do a little OOH but not sure,” Vadapalli said.

“Just like last year, we're sticking only to digital this year. The last time we did a lot of traditional advertising was way back in 2018. In 2019, we did a couple of small campaigns on television. By 2020, we were 100% digital and in 2021, we will remain the same. The increase in spends is on digital only.”

Sharing details on its business last year and future growth strategy, he said that last year, towards the end of March, their business was completely shut down because lockdown was very stringent. From July to December, it saw some resurgence in the furniture market.

“There was a pent-up demand because for about three months, people could not buy due to the shutdown. There was a lot of demand for new categories such as work-from-home furniture. For the furniture market, August to December is a strong season and we witnessed significant resurgence. This year, the lockdown was not so stringent and the July-September quarter was almost 3-4x of last quarter. One fundamental thing that helped us last year and this year is the significant shift in consumer behaviour to this category. More customers are now willing to buy a lot of basic furniture items online. So we are seeing a very healthy growth compared to last year. This year, while we continue to do business, we're continuing to see a 30-40% growth over last year. Businesses have come back at a much higher level than pre-Covid,” he said.

According to him, they are well prepared for the festive season.

“We have revamped the entire portfolio; there are a lot of new products. We have revamped our stores. We are running active marketing campaigns. These things will come together to help this year to do much bigger business than last year.”

Vadapalli expects this festive season to witness a growth of 50% over last year’s season (October-December quarter).

Apart from the frequent campaigns around festivities, it is offering coupons and cash backs.

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The company is seeing an increased interest in its brand online and he attributes it to its proactive approach in marketing campaigns.

Other than scaling up its marketing campaign and overall initiatives, it is expanding its physical footprint. 

It has 100 stores and plans to double it before March-end. In the beginning of July this year, they had about 60 stores. They launched 40 stores in this quarter, most of them are franchising. It has re-launched some of its existing stores.

Its physical stores contribute about 35 to 40% to its overall business.

In terms of footfall, he said, “This quarter, compared to 2019, we have about 25-30% higher footfall at present. While there was a little bit of apprehension in the May-June period due to Covid19, in the last two-three months, people are beginning to come out. Our studios are not too crowded. We have rather one-on-one consulting.”

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In the online furniture marketplace, the company enjoys a 40% market share. It expects this share to grow on the back of its expansion of its marketing efforts and offline stores.

Asked if the company had to lay off any employee last year, Vadapalli said, “Philosophically, we didn't want to lay off anybody during the pandemic. Once the business started doing well, we realised we need all hands on deck and a strong motivated workforce to help to cater to this extra demand.”

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