Pepperfry splurges $3 mn on new brand campaign
Fresh round of funding in place, online retailer is now focusing on infrastructure and brand building
New Delhi: Online furniture marketplace Pepperfry, which recently raised $100 million in a Series D funding round from Goldman Sachs Group Inc. and Zodius Technology Fund, is spending nearly $3 million on its new brand campaign that is running across television, outdoor, social, cinema and digital media.
Launched on 17 July, the company’s fourth brand campaign consists of three 40-second-long films which are being aired on English, Hindi and regional general entertainment channels (GEC). The month-long advertising campaign, originally in Hindi, has been dubbed in Tamil, Telugu, Malayalam and Kannada to widen its appeal.
The company’s previous campaign, which ran between October 2014 and February 2015, was focused on product servicing, assembly and delivery.
Currently, 70% of Pepperfry’s customer base comes from Delhi NCR, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Ahmedabad and Pune, 20% from tier-I cities and the remaining from tier-II, III and IV cities.
Vadapalli said the ad aimed to bring offline buyers online. “This is why unlike the previous campaign, where the television commercials were aired only on English GECs to target early adopters, this time we have roped in Hindi and regional GECs as well,” he said.
Commenting on the advertising by online furniture marketplaces, Raja Lahiri, partner at assurance, tax and business consultancy firm Grant Thornton Llp, said, “This market segment is getting built up due to the increase in middle-class population, which is buying new houses. The promotions, therefore, are targeting the buying behaviour of customers and trying to shift them from buying from a typical furniture shop to online. This change in pattern, however, is not easy to achieve.”
Conceptualized by advertising agency Saatchi and Saatchi, all the films feature a couple in which either the husband or the wife is anticipating the spouse’s reaction to a piece of furniture that he/she has already bought or is about to order online. The commercial ends with the partner being pleased with the purchase and Pepperfry’s signature “Happy furniture to you” playing in the background.
The advertising agency could not immediately be reached for comment on its ad films.
The television commercials are supported by an outdoor campaign, which was launched on 27 July in Delhi, Mumbai, Bengaluru, Hyderabad and Chennai. The ad films were also seen in cinema halls during the screening of Bajrangi Bhaijaan, Baahubali and Masaan.
Along with these, a month-long digital activation, during which a select few will be given Pepperfry coupons in proportion to the “likes” (one like is valued at around Rs.25-30) a customer gets on sharing a Pepperfry product on his/her Facebook page, will form a major part of the campaign.
Despite the company adopting a marketing mix to promote its products, Lahiri is not sure whether advertising alone will suffice in attracting customers online. “Ads can just drive people to the new marketplace but the product quality and servicing, especially on-time delivery, will ultimately sustain sales,” he said. In his view, the “touch and feel studios” installed by companies Pepperfry and Urban Ladder at airports are a great way of luring customers to examine the products and order them online.
However, he feels companies need to understand there is a huge population between 18 and 20 years of age who will buy clothes and phones online. “But furniture is usually limited to people moving into new houses. Thus, there is a great opportunity here, but it will still be an uphill task to tap it,” he said.
According to Vadapalli, within 10 days of the launch of the campaign, the firm’s online traffic had gone up 50%.
Are the ads aimed at brand building or at customer acquisition? “It seems both are directly proportional. Brand building has always been the underlying theme of our campaigns and this seems to drive sales as well,” Vadapalli said.
With a fresh round of funding in place, the company is now focusing on infrastructure and brand building.
“We have our own distribution centres across 300 cities and we want to increase this to 550 in the next six months,” said Vadapalli. The company also plans to increase its pin code coverage to 14,000 from the present 9,000 in the same period.
Pepperfry estimates the domestic furniture and home products market at $32 billion, poised to increase to $71 billion by 2020.
The market is highly unorganized, with industry experts estimating that less than 5% of businesses are online.