Yash Bhatia

IKEA has given the furniture category a fillip: Kushal Budhia, chief category officer, Pepperfry

  • Pepperfry embraces IKEA's impact, sees it as a positive force transforming the furniture sector.

  • A targeted approach towards regional growth involves franchise expansion with ambitious plans for 300 stores.

  • A deliberate shift from celebrity endorsements to performance marketing sees a 10% reduction in ad spend.

  • 'Home Beat Report 2023' reveals that Maharashtra led the demand surge for furniture and home goods.

Swedish furniture giant IKEA's foray into the Indian market has been a boon for domestic furniture e-commerce brands, according to Kushal Budhia, chief category officer at Pepperfry.

Contrary to viewing IKEA as a competitor, Budhia sees the global brand as a catalyst for positive change in the sector. 

"IKEA's entry into our country signifies significant potential within the furniture and home goods category, prompting the global brand to invest in expanding its presence. In a largely unorganised sector, IKEA's influence is poised to revolutionise the industry,” he says. 

He believes that IKEA is playing a crucial role in organising and transforming the landscape of the furniture and home goods sector. 

“The IKEA’s store in the city, where we operate, led to some business loss. But overall, we observed that demand in the particular area goes up as people start consuming more organised goods in the category,” he observes. 

Pepperfry, currently operating in 90+ cities with 43 company-owned studios and 142 franchise-operated studios, recognises the distinct consumer behaviour in tier II/III markets. According to Budhia, “The customers in tier II/III tend to have higher estimated order value (EOV), as compared to metros.”

He points out that in metros, there is a more cosmopolitan population drawn to the region for employment, often seeking entry-level products. Consequently, the EOV tends to be of a smaller magnitude.

Regarding product placement, the brand curates a range of products that sell more in a particular city. The brand gathers this information by selling online, and collecting data through it.

“In tier II/III markets, our stores are comparatively small as compared to metros," he says.

The brand is focussing on expanding through the franchise model. From a retail standpoint, there is a dominant presence in high street markets as compared to shopping centres. 

“Majority of stores in the tier-II/III markets are franchise-owned, as local partners have a better understanding of those markets,” he highlights. 

In the future, he believes that the brand can open around 300 stores in the country, up from the current 170.

In terms of revenue split, Pepperfry maintains an equal distribution between online and offline modes, with its private labels exclusively available on the Pepperfry website.


Media reports reveal that in the financial year ending March 2023, Pepperfry earned Rs 272.3 crore from operations, marking a 10% increase from the previous year. The brand narrowed its losses to Rs 187.6 crore in FY 23 as compared to Rs 194 crore in FY 22. 

Notably, in FY 23, the brand reduced its ad and promotional expenditures by 10% to Rs 106 crore. 

The furniture brand's most recent campaign took place in Oct 2022 featuring Kareena Kapoor Khan and Saif Ali Khan. The actors were given a meme treatment, followed by the release of a digital ad. 

After that, there was no major campaign by the brand, why? 

Budhia answers, “This year, we have not done celebrity brand marketing. Our focus is just on performance marketing including ads around social media that help generate organic traffic. That’s the reason the brand spend on ads has come down as we’re not going with celeb endorsements.”

The brand is currently running the #pephomies programme with social media influencers. The brand calls influencers #pephomies, and they post content on home decoration in their communities. 

He adds, “The strategy is to not spend large bucks that will lead to lower ROIs (return on investment), we felt it is better to target through this medium rather than associating with celebrities for this year.”

Quick Commerce: a new avenue for sale? 

Quick commerce is disrupting distribution for many categories including electronics, makeup, baby care, pet care, and more. In the coming years, will the quick commerce platforms also drive sales for furniture brands?

This consideration comes with numerous challenges, given the inherent bulkiness of the product and its nature, which doesn't align with impulse buying tendencies.

Budhia answers, “The category doesn’t need fast delivery. Seeing the consumer trend in metro markets, specifically in Bengaluru, Delhi and Mumbai we deliver our orders within 24 hours. Additionally, we assemble our products within 24 hours.” 

Competitive landscape 

The furniture brand believes that there is a greater degree of regional competition compared to national competition. “We’re looking to win that pie,” he states. 

The brand operates in Bhutan and Nepal through franchise-owned studios. And they’re entering the Middle East market too. “Entering into the Middle East market is at an experimental stage, currently we’re evaluating that decision,” he informs. 

Recap 2023 

Recently, the brand revealed its ‘Home Beat Report 2023’, which sheds light on the diverse purchasing habits of Indians across different states and cities.

One of the key findings from the report indicates that Maharashtra led the demand surge for furniture and home goods in 2023. 

The report also highlights a surge in demand for personalised home decor and furnishings. 

IKEA has given the furniture category a fillip: Kushal Budhia, chief category officer, Pepperfry

Tier 1 and 2 markets will be the pivotal growth drivers in the next 3-5 years, according to the report. 

IKEA has given the furniture category a fillip: Kushal Budhia, chief category officer, Pepperfry

Budhia says, “As a marketplace platform, it enables us to understand the preferences of customers in different states. We have a laboratory of data, and wanted to put that out.”

As the report indicates, the brand is also focussing on entering into tier-II/III towns. “Entering into these markets will be a key leg for the growth in the future”, he states.

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