Pepperfry buyout set to reveal cracks in online furniture retail

Pepperfry's falling revenue and abandoned IPO were proof of a rapidly changing landscape

- Sowmya Ramasubramanian

TCC Concept is aiming to broaden Pepperfry's e-commerce and digital marketplace presence.

Pepperfry's sale to realty services firm TCC Concept is likely to expose further cracks in online furniture retail, with systemic problems such as commoditised designs and supply-chain hurdles coming to light, leaving very few winners, industry executives said.

Last week, TCC Concept announced its acquisition of a 100% stake in Pepperfry for an undisclosed amount, saying it aimed to broaden its e-commerce and digital marketplace presence beyond its real estate management offerings. “This acquisition is in line with TCC’s vision of building scalable and technology-enabled consumer platforms,” it said in an exchange filing late Friday. The deal size couldn't be ascertained, but a person close to the firm said it was valued way below its July 2023 valuation of $352 million.

India's online furniture industry is struggling, with only a few innovative companies. With most firms relying on commoditised designs and a costly offline crutch, Pepperfry's plummeting revenue and abandoned initial public offering weren't just signs of trouble, they were proof of a rapidly changing landscape.

Even the world's largest furniture retailer is struggling to scale up. Ikea India's losses widened to ₹1,299 crore in FY24 from ₹1,133 crore a year earlier.