Pepperfry eyes profit for the first time amid GST rates reduction


According to a report by Business Standard, the reduction of goods and services tax (GST) on furniture and home decor items to 18% has boosted the sales of the country’s major furniture and home products marketplace Pepperfry and it is now hoping to become profitable next year, a senior company official said on Wednesday. While before the rollout of the GST, various states had low level of VAT on furniture, from July 1, the new taxation regime increased the levy to 28% which had impacted the volume on Pepperfry to some extent. But since last November, when GST on a wide range of items, including furniture and home decor, were lowered to 18%, the volume has bounced back, the company said without quantifying the same though. After the reduction in the GST from 28% to 18% in November, the sales have improved and the same is expected to continue, helping the company to attain the topline target by 2019, chief category officer at Pepperfry Hussaine Kesury told PTI.

The six-year-old marketplace, which also sells other brands like Hometown, Godrej and Neelkamal among others, apart from its own private labels, has set a target of INR 14 billion of gross merchandise value (GMV) this year. “We hope to become profitable in 2019 as we already are in cash profit and hope to touch a GMV of INR 20 billion as we expect sales to improve under the GST regime,” he said.

We feel physical presence as one of the most effective way for brand building and most of the new stores will come in small towns like Indore where we just opened a Studio,” Kesury said. According to him, the next level of Studio expansion will mostly be through the franchisee route, after its success in Bengaluru. Talking about house brand expansion, he said early this week they launched Clouddio, offering mattresses, pillows and mattress protectors. The organized mattress market is worth around INR 60 billion and is growing at 38%, according to Kesury. The company’s house brands portfolio consists of nine brands in the furniture and modular segments and the entry into the mattress segment is in line with its strategy of expanding its own brand portfolio as this segment has higher margins, he said, adding he expects this portfolio to account for 15% of the revenue in the first year. Pepperfry is present in 500 cities with delivery services to 5,000 locations and has 0.5 million registered customers of which over 60% are repeat customers.


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