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Case Study

Pepperfry.com: Turning the tables on disruption

By Amit M. Joshi and Ivy Buche

19 pages

October 2018

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Reference: IMD-7-2023

The case discusses how Pepperfry, India’s largest online furniture retailer, disrupted the furniture and home decor market while overcoming the challenges of India’s weak infrastructure, age-old methods of buying and selling furniture from local carpentry shops, lack of consumer trust in e-commerce and a massive geography. By 2018 Pepperfry had grown exponentially to control over 60% of the online furniture business in the country. However, several questions regarding its current and future trajectory remained. First, despite controlling costs and significantly expanding revenues, it was not profitable. What could it do to achieve profitability? Second, in response to the demands of the market, Pepperfry embarked on an omnichannel strategy, establishing 34 studios in Tier 1 cities with targeted expansion to 70 studios by 2019. How could it manage this added online-offline complexity, while still staying on track to break even? Finally, the competitive space had significantly heated up, with the arrival of IKEA (September 2018), and with Flipkart’s (acquired by Walmart) growing focus on the furniture segment. Did Pepperfry have the systems, brand name and agility to respond to these challenges? Or will the disruptor be disrupted?

Learning Objective

How platform strategy can be cleverly used to disrupt a fragmented and unorganized marketplace where customers demand significant variety
The importance of a curated platform, compared to an open one
The challenges of traditional supply chain and marketing channels in developing countries
How firms in such markets can go about building a multi-sided platform
The critical role of the offline channel and the challenges of managing an omnichannel business

Keywords

Strategy, Furniture, eCommerce, Curated Marketplace, Long Tail, Disruption, Supply Chain, Logistics, Omnichannel, Franchise, Ecosystem

Settings

Asia, India
Pepperfry, Information Technology, eCommerce
2012 - 2017

Type

Field Research

Available Languages

English

Related material

Teaching note, Video

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