Saturday 29 October 2016

Pepperfry bitten by brand bug; Launches in house modular kitchens brand for higher sales
Brands seem to be the new thing on the online retail block. Myntra’s pushing private brands. Snapdeal rebranded itself and Craftsvilla decided to launch in-house brands this season. All these efforts in name of acquiring sales and reaching profitability.
The online furniture segment is no different. Urban Ladder is also rebranding to bring in more customers and achieve profits. To make sure it isn’t left behind Urban Ladder’s rival Pepperfry also launched a brand.

Mangiamo by Pepperfry

Recently, Pepperfry launched a house brand for modular kitchens called Mangiamo. This is expected to push total sales upwards and boost margins. In one year, this brand is anticipated to account for approximately one-tenth of the marketplace’s house brands business, claims Pepperfry co-founder and chief operating officer, Ashish Shah.
House brands basically comprise of brand names used by a retailer for a specific product line created by the retailer and sold at a low price in comparison to other brand products.
Pepperfry’s Mangiamo has a price tag that ranges from Rs.75,000 to 14.5 lakhs. It is now available in Delhi, Bengaluru, Mumbai and Pune.
The homegrown online furniture company already owns seven private brands – Woodsworth, Mintwud, Casacraft, Amberville, Bohemiana, Mudramark, Mollycoddle and Primorati.
How is Pepperfry achieving this?
Pepperfry has teamed up with Evershine, a Bengaluru-based manufacturer and Rawat Brothers manufactures from Pune to build modular kitchens for its Mangiamo brand.
It has also partnered with businesses that manufacture, design and developed its house brands. These presently account for 40-50% of its entire revenue and makes up around one-third of the units listed on the marketplace.
Homelane is another partner of the company. It specialises in modular furniture services.
Shah says, “There is a nuance to the modular business and you cannot sell a single piece without consulting. If an online company has to do kitchens, it has to have significant muscle on ground. We have 11 studios so far and will have nine more by the end of this year. Customers meet our design consultants here, show us a basic layout and we make suggestions.”

What is the modular kitchen market worth?

In India, the modular kitchen market is expected to be somewhere at about 6,000 crores by 2020 from its current Rs. 2,500 crore position, experts state.
House brands could contribute to varying margins of 30 to 60%. Mangiamo, on the other hand, is expected to bring in at least 40% margins, claims Shah.
He adds, “We do not market house brands differentially on our marketplace. Our business is about democratizing choice for customers. We have always spoken about variety. The new listings in the marketplace will far exceed the private brands. I can empanel many more sellers every month. The idea is to have national brands, regional brands and house brands on our marketplace.”
Since the average ticket size is larger than the average order value, there is a noticeable rise in sales and revenue earned. The average ticket size for furniture is Rs. 3 to 5 lakhs compared to an order value of Rs, 15,000 to Rs, 20,000.

Private labels and house brands trending among etailers

Most etailers choose private labels or house brands in India nowadays like we’ve already discussed. This is especially the case among fashion and lifestyle categories and this is due to the high margins they bring. Myntra claims private brands bring in 25 to 30% business.
Amazon’s fashion category is also including exclusive fashion labels. Zivame the online lingerie store is focusing its brand.

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