Solution to Assignment #1 Case Study #3: Pepperfry

After studying market data, collected some concrete facts about ecommerce space and different verticals in retailing.

1. Per Exhibit 1.1 — Only 6% of furniture vertical was organized.

2. Per Exhibit 1.2 — Indian retail market size in furniture vertical was growing by 13%-15% year on year from 2011–2014 and 41% in 2015, which was better than other verticals.

3. Per Exhibit 1.3 — India e-retail market size in furniture vertical was growing 10% year on year consistently.

4. Per Exhibit 2.1 — Food, Pet and Furniture verticals were less competitive. Out of these 3 areas Pepperfry was in Pet and Furniture verticals.

5. Per Exhibit 3.1 and 3.2 — GMV and Revenue were growing consistently in Furniture vertical and was highest. In Oct-Dec, 13 quarter revenue was even more than total revenue of other verticals.

6. Per Exhibit 3.3 — Furniture vertical had highest product margin which was appx. 40% consistently for last couple of quarters.

Above analysis shows that Furniture vertical was growing with 10% year on year growth, it was less organized and less competitive. Pepperfry was doing good in terms of financial in furniture vertical.

Consumer behaviour data shows that offline furniture buying was painful as they had to travel different stores to compare products. It also shows that people liked to buy online as they were getting more choices, was easy to compare and can order from home.

Above data shows that for Pepperfry it was a good decision to focus on Furniture vertical only.