Indian kids' furniture segment is growing at a steady rate of 20 percent year-on-year and is estimated to be a Rs 7,000-10,000 cr market.
Online furniture market place Pepperfry is betting big on the kids' furniture segment and is eyeing gross merchandise value (GMV) of Rs 500 crore from this segment by 2021, according to Hussaine Kesury, Chief Category Officer.
In a candid chat with Moneycontrol, Kesury said that overall the company is aiming to touch gross merchandise value of $1 billion (Rs 7,100 crore) by 2021, of which Rs 3500 crore will be contributed by house brands and Rs 500 crore by the kids furniture segment alone.
Pepperfry kids' furniture category currently contributes around Rs 65 crore.
"Young urban parents, ranging from 28-40 years of age, are spending a significant portion of their disposable income on quality furniture and storage for their kids today in comparison to a decade ago," said Kesury.
Pepperfry was founded by former e-Bay executives Ambareesh Murty and Ashish Shah in 2011. Since then, it has been growing at a compounded annual growth rate of 83 percent, with a 20 percent year-on-year growth.
On the rationale behind entering kids’ furniture segment, Kesury said, “In the past decade, the business targeting babies and children had experienced an economic boom," Kesury said.
He further pointed out that the rise of single-child-double-income families led many parents to invest in high-quality furniture and furnishings for their kids rooms especially beds, study, and storage.
Indian kids' furniture segment is growing at a steady rate of 20 percent year-on-year and is estimated to be a Rs 7,000-10,000 crore market.
However, Kesury believes that 85 percent of the market is unorganised and there is immense scope for growth and penetration.
"We are already seeing growths upwards of 100 percent plus on YoY in our business. We are currently just about a 1 percent of the overall kids market size and therefore there is enough headroom to grow considering that 85 percent of the market is unorganised," said Kesury.
He added that influenced by global trends, young parents are increasingly purchasing varied furniture and décor products for their children online, which has resulted in an uptake in the segment.
The company aims to leverage the booming demand by providing consumers with a catalogue of more than 5,000 listings with over 200 brands dedicated to the category by 2021.
To tap the immense opportunity in the kids' segment, Pepperfry launched products through their private labels such as Mintwud and Casacraft. They also launched their house brand Mollycoddle in 2016.
"We have built a catalogue ranging from cribs, bookcase beds, and storage cabinets to stools, among others, designed to address specific customer needs," Kesury said.
In order to accomplish kids' segment, Pepperfry intends to use technological setups such as dedicated Meta’s, 3D viewing and concept setups to simplify the process of purchasing products.
"We will supplement this with our offline studios, wherein we have curated setups for kids' rooms alongside design experts to guide customers on how they can achieve the perfect aesthetic in their child's room basis their budget.
Apart from three house brands, Pepperfry has a host of kids' furniture and décor brands that sell on the platform, including Urge, Boingg, Adona, Alex Daisy, Lycka and Bubblegum among others.
On the question of revenue from all the house brands, Kesury said: "Over the years, these house brands have evolved into leading brands on the marketplace, contributing to over 50 percent-plus of Pepperfry’s revenue. We aspire for these brands to reach a combined value of Rs 2,000 crore by 2021."
Furniture for Teens
In the past few years, the market has seen the growing involvement of teens and pre-teens in purchasing decisions across households, according to Kesury.To cater to pre-teens and teenagers, Pepperfry has launched bunk beds, wardrobe, and storage cabinets under their house brand Mintwud and Casacraft.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.