Launched in 2013, Pepperfry has more than 60 lakh registered users and 1 million+ home products. Pepperfry has changed the way of buying furniture. Indians loved the idea of buying furniture from the comfort of their homes and that is why the company has 7 million+ visits on the website.
Today, if I ask you to buy furniture online, Pepperfry would automatically pop up in your mind. The company have grown rapidly over these years. The company delivers its products in more than 500 cities in India. But, how did the company become so successful? To answer this we need to understand their business model.
Pepperfry is an online marketplace headquartered in Mumbai that deals in furniture and home décor like furnishings, lighting, beds, tables, chairs, cabinets, kitchen appliances, bathing equipment, mattress, and so on.
The founders of Pepperfry are Ambreesh Murthy and Ashish Shah. The tagline of Pepperfry is ‘Happy Furniture to You’.
The company has launched 100+ studios across 57 cities in India In these studios, a wide range of furniture is displayed so people can come and physically see all the furniture. In 2018 Pepperfry tied up with Quikr for a furniture exchange program.
Pepperfry also launched a furniture rental service in September 2018. People can rent furniture and can use it for a period of 6, 9, or 12 months.
Target Audience of Pepperfry
The target audience of Pepperfry is people between the age group of 35-45. The company is also targeting people who are in their mid-20s to early 30s.
Pepperfry follows the omnichannel strategy where they allow their customers to order products anytime, anywhere from any device. The company employs the managed marketplace business model.
They have connected with small and medium-sized business merchants and artisans. These merchants can sell their products through Pepperfry.
The category team meets the sellers to check the quality of products and once approved they take some products from them. These products are sent to the studios for photoshoots.
The photos of the products are then placed on their website. When a product is ordered from the website, it is brought from the sellers and delivered to Pepperfry’s warehouse.
What is Unique about Pepperfry’s Business Model
1) Pepperfry Studios and Franchise Model:
Pepperfry Studios
In India, people have a habit of checking products and services physically. To gain the trust of the people the company launched Pepperfry studios where people can explore all the types of furniture in offline mode. People cannot buy furniture from these studios. Although these stores help consumers make big purchases online.
The interior design professionals that are working in these studios provide free consultations to customers for their home interior needs. About 25% of the business is generated from these studios.
The company has also started a franchise program where small entrepreneurs can own a franchise with Pepperfry and run a profitable business.
The franchise-owned studios work on a 100% price parity and do not require the partner to hold product inventory.
“Omnichannel has always been an integral part of our growth strategy and our existing franchise program has helped us expand our offline footprint by creating several touchpoints across major metros and Tier 2 cities.” added Ashish Shah.
2) Powerful Marketing:
Pepperfry has collaborated with many Influencers and YouTubers. As we all know YouTubers and Influencers have many followers. This helped in brand awareness and people started to buy products from Pepperfry.
During the initial days of Pepperfry, their ad campaigns were focused on getting the audience’s trust. Later on, their ad campaigns shifted to providing specific benefits like looks and design of products.
High-quality images are placed on the website to attract people. The company found out that 65% of the customers are women.
So, to attract them Pepperfry’s team created powerful campaigns that resonated with their target audience. They also provided various discounts which led to an increase in sales.
The revenue model of Pepperfry is straightforward. They earn money by selling products. About 80-85% of Pepperfry’s Revenue is generated by selling furniture in the solid wood furniture category. They have a revenue of Rs 500 crore per annum.
The main reason for high revenue according to Ambreesh Murthy is that the gross margin is as high as 45% while the contribution margin is only 25%. Also, after deducting various costs such as direct cost, logistics, and discounts Pepperfry claims that they earn a contribution margin of 25% – about Rs 2,025.
”Also, the cost of customer acquisition is very low. In fact, we have a high rate of repeat purchases. This has been possible as we sell a range of ancillary products including mattresses, bedsheets, pillows, etc. While a customer may buy a bed once in three years, she does return to the website to purchase related products at least three times a year,” Ambreesh Murthy explained.
Conclusion:
Pepperfry is an inspiration for many startups. Their business and revenue model are simple yet effective. They understood what Indians wanted and designed their business model accordingly. Customer satisfaction is the most important aspect of their success.
FAQ
Is Pepperfry an Indian Company?
Yes, Pepperfry is an Indian Company started by Ambreesh Murthy and Ashish Shah in 2013.
What is Pepperfry Studios?
In these studios, people can come and see all the furniture. The furniture is not for sale but people can check the product quality and design. Once they are satisfied they can order the furniture online.
What is Pepperfry?
Pepperfry is an online marketplace headquartered in Mumbai that deals in furniture and home décor.
What is the revenue model of Pepperfry?
The revenue model of Pepperfry is straightforward. They earn money by selling furniture products. About 80-85% of Pepperfry’s revenue is generated by selling furniture in the solid wood furniture category.
How many products does Pepperfry have?
Pepperfry has 1 million+ home products ranging from beds, tables, chairs, cabinets, kitchen appliances, bathing equipment, mattress, furnishings, lighting, and so on.
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The society and the world have welcomed the idea of shared economy. Today’s youngsters have understood the many benefits of sharing and renting rather than buying. It saves time and money and that is why we see a rise in car rental services, shared apartments and holiday homes, rented outfits and so on.
Sidhant Lamba had witnessed some major problems people face when it comes to their struggles with furniture. The buying prices are always high and there is tons of difficulty in selling used furniture. When someone wants to move or simply change the style. For those who are moving often for jobs have to take out additional time and bear the cost spent to move bulky furniture which in many cases arrives damaged. People also get stuck with old-fashioned furniture which doesn’t go with their home décor. Some people need temporary furniture but don’t want to buy them and so on. Fabrento wants to solve all these problems and then some more with free delivery, setup and installation.
Fabrento provides Furniture and Appliances on rent in Delhi, Bangalore, Mumbai, and Chandigarh. Read about Fabrento Company Profile, Revenue, Founders, Business Model, Logo, Growth, Funding, How it works, products etc.
Fabrento is a startup headquartered in Delhi which provides furniture rental for homes. They also deals with electronic appliances, started rental of furniture for offices, created Fabevents which Rents furniture for corporate and celebratory events. They have even launched a premium range for the very well heeled who want to live with luxury.
Fabrento aims to become one of the most successful furniture and appliance rental company in India. Since their sister company manufactures majority of the furniture, Fabrento has the firm belief in providing excellent quality and beautiful furniture to provide their tenants a tasteful home.
Evolution and change is very important but you can’t lose your core business if you believe in it. Alongside quality of delivery and service is key in any service providing business and Fabrento aim at excelling in that.
The online website and soon to be launched mobile Apps of Fabrento are designed in such a way that anyone can navigate it and rent functional and sleek furniture in just one tap. Their affordable rental prices ensure that renting furniture becomes extremely cost effective as compared to shelling out big bucks to buy bulky furniture.
Fabrento – How it Started?
Fabrento was started with the main goal of converting consumers’ dream homes into reality.
Mr. Sidhant Lamba, Founder, Fabrento has always been passionate about décor and furnishing. He was keen on bringing the latest furniture designs into people’s homes and offices. However, every time a new model of furniture hits the market, it is not at all a feasible option to buy it.
Because of this, many and especially millennials, fall behind to create that impressive first impression through their home décor. Furniture renting is already a lucrative business oversees and this inspired the birth of Fabrento to cater the to the millennial market of India.
Sidhant has always been someone to think out of the box. He has done his graduation from Apeejay Institute of Design in Bachelors of Interior Design. Following this, he acquired a Master’s from Regent’s University London in International Business.
He has further finessed his studies through studying Interior Decoration from Inchbald School of Design, London, Alongside Art Markets from Sotheby’s Institute of Art, London and Lighting Design course from Chelsea College of Arts, UK. He has also studied Digital and social media marketing from Dubai.
He started his career through family business, The Continental Group, which is providing interior solutions since the 1940s. He added the business of a luxury furniture store which sold furniture fashioned and manufactured by the company alongside many brands from Europe and south east Asia.
In 2016, Fabrento became the precious product of his education in interior designs and international business and his experience in the field.
Fabrento has an exceptional team of IIT graduates at the supervisory, operational, management level and advisors with 40+ years of experience in the furniture, design and business industry. They all bring their unique ideas and knowledge on the table. This is why Fabrento furniture is designed with extreme skill and care. All the rented items are at their highest quality and are functional to suit customers of all backgrounds.
Fabrento – Products/Services
Fabrento has a vast array of furniture. They offer both package deals as well single pieces. Under bedroom category Fabrento provide single and double beds, king and queen size beds, beds with and without storage, wardrobes, dressers, study tables, etc. Customers can decorate their living space with their unique sofas, coffee tables, recliners, TV units, and multi-purpose storage units.
Fabrento Beds
Apart from these, Fabrento also offers furniture for dining area, appliances, and home office, kid’s furniture and even art and accessories.
Fabrento further offers complimentary cleaning and maintenance visit every 6 months to keep the rented furniture in their best condition. Under the relocation offer, they transfer all the rented furniture from one place to another within the city, without engaging any extra charges.
Fabrento – Target Market Size
Major cities such as Delhi, Mumbai, and Bengaluru etc. have witnessed a surge in furniture renting. Researches state that about 65% of India’s population is between the age of 18-35. Out of these, 150 million people live on rent in the Tier 1 and Tier 2 cities of the country and they are turning more towards furniture renting.
“We expect that with the increasing urbanization, rising trend of nuclear families, and expanding working population, Fabrento will continue to witness demands.”, says Sidhant Lamba.
This demand is expected to rise in future as the furniture rental market is growing at a robust rate over the period of 2017 to 2024. In India alone this market has been calculated to be about $800-850 Million. A PricewaterhouseCoopers report shows that the rental market will touch $335 billion by 2025 globally.
Fabrento – Startup Launch
Lamba came across the idea when a friend very easily rented furniture helping his brother set up home in New York. Of course furniture has been rented for events and in an unstructured way for many years in India but to be able to develop a tech platform serving as a virtual store seemed very appealing.
“As an interior designer who wanted to dabble in a tech space this seemed like a great fit.”, added Sidhant.
The journey of ideating and designing involved hours and days and months of research of the kind of brand he wanted Fabrento to be and what they wanted to be perceived as.
Designing is the part Sidhant loves whether it’s interiors or graphics. He is blessed to have an incredible team who understand our vision and help rectify it when anyone in the team is going off track.
Initial people they spoke to were bankers- very important as they have to believe in the vision for if one were to borrow money. Then millennials through surveys, and met with industrialists in ranging fields with vast experiences to pick their mind about how to set Fabrento off the ground.
It is true that there are a few furniture renting service providers in the market. However, what makes Fabrento unique and ahead of the race is the feature of customizing office furniture to rent to match their décor and style. This special service of personalizing their products to meet the rising demands of the clients has been a feature that no other rental furniture company has undertaken to date.
Fabrento’s Croisees Study Table
Fabrento has now partnered up with co-living establishments in order to provide the most comfortable, functional and stylish furniture for the students and young professionals.
Alongside Fabrento has one of the largest collection of beds which is essentially the most important part of your home as you spend almost half your life in your bedroom.
From a business point of view, Fabrento manufactures most of their furniture in their sister companies plants on their specifications. So, remodeling and renovating it to new for the next clients in easier for them as compared to the peers.
Fabrento – Name, Tagline and Logo
Fabrento just poses the two words ‘fabulous’ and ‘renting’. This name has been selected to send out the message that this company is ready to provide their customers fabulous furniture at fabulous prices.
Fabrento Logo
It is important for them to see that their consumers rent their dream furniture and décor without burning a hole in their pocket. Added benefit is that it’s easy to write, easy to pronounce and easier to remember.
Fabrento create and design most of their furniture by their teams and in the factories of continental. This is to make sure that the customer gets high end products which then can be refurbished and altered as per the demand in the next cycle in their own repair centers.
This flexibility makes their rented furniture last longer than the rest. The economic inflation works in their favor as it creates more market for rentals. Customers can also swap their furniture according to their need and taste.
Fabrento – User Acquisition and Growth
It took them a long time to devise a marketing strategy. Fabrento as a company believe in the correct spend and not unnecessary spend as it’s easy to get into a rut of brand building exercise which can lead to incorrect and unpalatable spends.
They use a combination of digital marketing on google, social media marketing on Facebook along with maintaining hygienic social media presence for user acquisition. Forming healthy and strategic alliances are key in marketing and mutually beneficial marketing with different publications is a must.
Through media coverage, Fabrento has started to spread the news of the company and the blog Fabrento News. Prestigious newspapers such as Economic Times, The Quint, Indian Express, Business Standard, The Hindu and many more has taken up the story of Fabrento and has spread awareness about their products, events and services among the people. They also have an excellent social and digital media outreach plan which helps them spread awareness and brings large orders of homes.
The growth rate is reflecting the success, with Fabrento’s revenues growing at the rate of 2.5 to 3 times on YOY growth scale.
Fabrento – Startup Challenges
One major challenge in the field of furniture renting is really the lack of awareness. Fabrento wants to spread more awareness among the masses to let them know the wonderful option of renting furniture. They no longer have to shell out big bucks and buy their favorite piece of home décor.
Fabrento’s initial investments were INR 15 crores. They had a major economic support by their sister groups and also had the assets structure to support the start up.
Fabrento – Advisors and Mentors
Mr. Sanjiv Lamba – The founder’s father and Kavi Ghei who is an illustrious investor in many different fields of business are the advisor of Fabrento. Alongside Mr. Aditya Gupta who is an investor and owner of Gems capital investing in many start ups is also mentoring the startup.
Fabrento – Future Plans
They are hoping to reach new milestones in the future. They definitely want to add more cities such as Hyderabad and Chennai and want to create a presence in Gujarat. Additionally they want to continue collaborating with different businesses and establishments who are in want of their products.
They have also launched Fabevents in Delhi and Punjab. This is rental of furniture and accessories for the the evergreen wedding market and celebratory events. Alongside they have created furniture for corporate events for businesses and want to expand this segment to other places in India. They want to concentrate on small offices which they can customize too.
Fabrento – FAQ’s
What is the minimum period of subscription?
The minimum period of subscription is 3 months. You can also opt for 6, 9, or 12 months of tenure.
When should I pay the rent? What if I get delayed in the process?
You are required to pay the monthly rent before the 5th of every month. The first month’s rent is adjusted according to the date of delivery. After the due date, you’ll be charged a 1.5% interest rate until the monthly rental is paid.
What are the payment methods available for paying the deposit and rent?
The deposit is to be paid online while booking your subscription. This deposit will be refunded if you cancel your order before 2 days of the delivery or after your rental tenure ends. For monthly rentals, Fabrento will send you an invoice with a payment link on your registered email id. Payment can be made via net banking, credit/debit card.
What extra benefits can I avail for renting the furniture for a longer time period?
The company aims at making its customers happy with its service. You can avail offers for your rental subscription by calling on 01139585883 with the companies customer experience team.
Can I pay upfront for my rental tenure?
Yes, you can. Additionally, you will be getting an extra discount upon paying upfront for your subscription. Just write to support@fabrento.com or call on 011 39585883. They’re happy to serve you.
Fabrento – Conclusion
Fabrento offers services for both businesses and Individual Customers. The company is aiming at creating a dream home into a reality in just one click on your phone. It provides services that have access to state-of-art home furniture, office furniture, home appliances & accessories for rent at affordable rental prices with free delivery, setup & installation. The company is funded by Continental Group which is a leading player of turnkey interior & furnishing solutions with over 60 years of experience in the country. The strength of Fabrento is it has the widest range of products which its customer can choose to rent. The company is largely focused on providing its users the finest quality, customized solutions, and a good experience to its customers.
Pratyusha Srivastava
