Flipkart in talks with Pepperfry for an investment

Flipkart is said to be exploring an investment in online furniture retailer Pepperfry shortly after relaunching its own furniture business. Discussions were held last month, according to reports, and Pepperfry may not be the only player Flipkart is talking to for expansion in that category. It was reported a fortnight ago that Flipkart was looking at a potential investment in UrbanLadder as well. Armed with $4 billion in cash following a massive funding from Japan’s SoftBank, Flipkart is aggressively expanding its footprint in non-core categories. And organized furniture retail, though a small section of e-commerce now, is a high-margin business.

Flipkart had briefly ventured into furniture retail but shut it down to focus on core categories like electronics and appliances. However, as global rival Amazon ramps up its presence in India, Flipkart is nearly compelled to be present everywhere. Pepperfry, which holds 65 percent of the organized furniture market in India, is Flipkart’s best bet. Additionally,



Pepperfry operates a business with gross margins as high as 45 percent. For Flipkart, there are few high-margin categories other than fashion. Hence, furniture retail is a smart move. Both companies, however, have refused to comment on speculations about the deal. ALSO READ: Flipkart in talks to invest in Swiggy, UrbanLadder, UrbanClap and others: Report

In case the investment goes through, Flipkart will have access to Pepperfry’s catalog of over 14,000 furniture items. The online furniture market too is growing, and is estimated to cross $1.1 billion at the end of this year. At present, Pepperfry’s average ticket size is Rs 18,000, and it is likely to go up. Experts reckon that Flipkart’s investment in the company will bear fruit in the next three years when category itself heats up. “Furniture is a fairly insignificant category for Flipkart at the moment. The company is slowly building out their furniture category as a long-term bet to increase their GMV [gross merchandise volume],” an analyst said.