By Rick Carew
HONG KONG-- Goldman Sachs Group Inc. is betting on Indian
shoppers buying their next sofa online.
The U.S. investment bank is leading a $100 million investment in
Pepperfry.com, a top Indian online furniture and home-products
marketplace, according to a person familiar with the situation.
Indian startups are capturing the attention of global investors
who see promise in companies, such as Flipkart Internet Pvt. and
Snapdeal.com, capturing market share in e-commerce. Goldman Sachs
forecasts rapid growth for India's e-commerce market as the country
catches up with other big economies. The Wall Street bank estimates
India's e-commerce market is $20 billion today, just one-tenth of
China's and a fraction of the U.S. market for online goods.
Online retailers Flipkart and Snapdeal have achieved
multibillion-dollar valuations by offering venture capitalists a
way to capture the increasing spending as more Indians get online
through mobile phones and wider Internet access. They offer a wide
range of goods, aiming to be a one-stop shop for consumers.
Pepperfry is part of a next generation of Indian e-commerce
startups that focus on selling specific product lines to India
shoppers, oftentimes manufacturing the products themselves. The
company, founded in January 2012, not only markets the products
through its site, it also employs carpenters and operates a fleet
of over 350 delivery vehicles. Pepperfry plans to use the funds
raised from the Goldman Sachs-led investment to expand its delivery
fleet, open new distribution centers and expand its assembly
services, according to the person.
Indian consumers have rushed to buy furniture from online
retailers as big international furniture retailers don't have
substantial operations in the country. Swedish furniture giant IKEA
Group is producing rugs, towels and chairs and other homeware in
India for export and now plans to start opening stores there. It
has bought the land for the first outlet in the southern city of
Hyderabad. IKEA doesn't have an opening date for the new store, but
plans to open 25 locations in India by 2025.
Other investors participating in the Pepperfry deal include
Zodius Technology Fund, Bertelsmann India Investments and Norwest
Venture Partners, the person said. Bertelsmann India and Norwest
Venture are existing investors in the company.
Eric Bellman contributed to this article.
Write to Rick Carew at rick.carew@wsj.com
Access Investor Kit for The Goldman Sachs Group, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US38141G1040
Subscribe to WSJ: http://online.wsj.com?mod=djnwires