Pepperfry struggles to scale in FY23 but reduces losses

Online Furniture brand Pepperfry has been witnessing tepid growth in the last few fiscal years and this is evident from its financial numbers in FY23. The company’s scale grew a little over 10% but it has managed to reduce losses in the fiscal year ending in March 2023.

Pidilite-backed Pepperfry’s revenue from operations increased to Rs 272 crore in FY23 from Rs 247 crore in FY22, its consolidated financial statements sourced from the Registrar of Companies (RoC) shows.

Financial FY23

FY22 FY23










Amount in ₹ Cr

Founded in 2012, Pepperfry is a marketplace for furniture and home furnishing. Income from the commission on the goods and articles sold through its marketplace and offline stores formed 89% of the total revenue while the rest came from the sale of traded goods and contract services.

According to the company, Pepperfry Studio network grew by 40% to reach over 200 Studios by March 2023. Importantly, the company generated Rs 1,117.5 crore of Gross Delivered Value (GDV) during FY23.

See TheKredible for the detailed revenue breakdown.

Akin to many consumer facing e-commerce firms, its advertising and promotion cost marked 22% of the overall expenditure. This cost decreased by 18.5% to Rs 106 crore in FY23. Pepperfry also roped in Saif Ali Khan and Kareena Kapoor Khan as their brand ambassadors during FY23.

Expense Breakdown

Total ₹ 458 Cr
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Total ₹ 474 Cr
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  • Employee benefit expense
  • Rent
  • Information technology expenses
  • Advertising promotional expenses
  • Transportation cost
  • Order fulfillment cost
  • Depreciation and amortisation
  • Cost warehousing
  • Others

Its employee benefits, rent, logistics, warehousing, information technology, legal fees, and other overheads catalyze the total expenditure by 3.5% to Rs 474 crore in FY23 from Rs 458 crore in FY22.

Check TheKredible for the detailed expense breakup.

The tight control of advertising and employee benefits helped Pepperfry to reduce its losses by 3% to Rs 188 crore in FY23 from Rs 194 crore in FY22. Its ROCE and EBITDA margin stood at -114% and -30% respectively. On a unit level, it spent Rs 1.74 to earn a rupee in FY23.


FY22 FY23
Expense/Rupee of ops revenue ₹1.85 ₹1.74
ROCE -51% -114%
EBITDA Margin -47% -30%

Pepperfry elevated Shah to the post of chief executive officer following the demise of the company’s long-time CEO Ambareesh Murthy in July. The firm also raised $23 million from existing backers this year.

While the firm was expected to file its IPO papers during 2021, the firm has delayed the public listing plans as it eyes profitability and consistent  month-on-month growth before listing on the bourses.

That ambition is surely on hold for a much longer period now, considering the limited improvement that has been delivered thus far. A Rs 272 crore topline in the context of the broader furniture market in India in the billions, is none too impressive, even if Pepperfry has managed to convince its investors that it could be the start of something bigger. The decade old firm has struggled with the challenges that were always expected in the category, and hardly brought in the kind of disruption it would have hoped for. The move into offline studios might have been driven by hard nosed market realities, but simply underscores how limited the online ‘disintermediation’ has proven to be in the category. 

Online furniture and home goods firms have struggled in India with a failure to create distinct design hits attributable to them, that can do so much more for brand building than celebrity endorsements. Even issues like sustainability that offer so many possibilities lie unaddressed, as they seek to beat unorganized sector competition against all odds. Its a battle that gives no indication of throwing up a different outcome this time as well, in our view.

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