 Good evening, thank you so much Babna and thank you to all of you for staying back last session of the day We've had a long day You know when we started this conference in the morning at 9 30. I spoke briefly about You know how the CMO's role has changed, you know the theme as you I'm sure you all have you know gas today is about you know agile marketing the agile marketer Those of those of us who grew up studying Philip Kotler remember the four P's today I think if Philip Kotler were to write his thesis book to again It'll become some some 20 P's cues and RS ours from you know Personalization permission and you know what have you so thank you. I'm reached for doing this. Thank you for taking time out You know straight off the bat Jyotsana spoke about you know I mean nobody here needs an introduction to what pepper fries. It's you know in a short journey Ambrish tells me it's 11 only 11 years old now and in a short span of time It has become an iconic brand a brand that you know I'm sure a large number of us sitting in this room have interacted with bought and sort of experience in the last decade Let me ask you Ambrish first about you know what this conference is You know agile marketing agile marketer and pepper fry when it came in it really disrupted the you know ecosystem of how we are buying You know furniture and you know stuff for home So in that sense, how does sort of pepper fry? Signify agile marketing because you know, you had an entrenched ecosystem. You also had competition, right? What are the things that you did? Adith was here two minutes back spoke about how you know Instead of giving the customer what you think is your USB You know give them what you need. What did pepper fry do to disrupt that market? That's it. That's a great question. I was in thanks for having me here the I think it all started with With the vision that we had and and here's the thing, right if somebody hangs around for Long in a place. So suppose somebody's been working in an organization for ten years Typically the the word that gets used for that person is ya insan to furniture over here, right? So this place that we were operating in was some which is was one where furniture wasn't really Even thought to be agile or thought to be something that's glamorous new trendy and so on So the vision that Ashish my co-founder and I had was that we gonna make this category really exciting and It started off with frankly our name. I mean we could have been called. I don't know fabulous furniture, right? But we didn't choose to be to be called that we chose to be called something which has nothing to do with furniture Which is pepper fry and I think that's where it started After which we realized that you know when you when you're when you're on a journey where you're looking to create something Which is lasting and forever then the way you approach it is very different from how everybody else has approached it So, you know we fundamentally on online play However, we spend most of the money on brand building So interestingly most of our budgets typically go into television media into outdoor into things like those Yes, we do internet marketing. There are people out there who you know need to Find us online But the interesting thing is by virtue of having created our brand more than 75% of our business today Comes organically to us. So, you know, we don't even need to pay Anybody anything in order to drive a customer in our direction and then the entire journey just continued like that We figured that so we wanted to be Somebody who changes the way people think about furniture, which is a happy furniture to be happened We spend on brand and our thesis continued into, you know, the way we built out our only channel presents and and so on So we've we look I Shouldn't sound too proud to say that I think we've been a child across Everything and I think there'll be five other things that will happen over the next ten years and we will have to respond to it We will have to Prepare for it well in advance and we'll we'll look to do that. Yeah, that's it, you know Lot of legacy industries legacy businesses, you know in the last 15 years 10 years Especially have been disrupted through the use of technology. I remember a conversation I had with a friend today who spoke about how Netflix fundamentally is a tech company which is doing fantastic content and you know using the base of that tech they're able to discover what better, you know If you look at really content Very few companies close come close to you know, what HBO does globally, right? But Netflix their technology base really gives them a huge advantage on the other hand you look at, you know legacy media companies Let's take the example of Disney for it Disney does great content, but perhaps the technologies, you know, not as superior to you know, what what Netflix does Pepper fry again is in a business where you know, it's a legacy industry Which you're trying to or you've tried to change through technology and now also build, you know, many offline legs to that one, you know what What what all role does technology play in this because at the end of the day, you know, what you're doing is You know offering products which are brick-and-mortar Right, which consumers have been buying for Ages and on that you're trying to build a layer of you know consumer insight knowledge better distribution better better supply But as you expand and build your brand What is the balance of technology versus, you know old-fashioned insight that you kind of Hardwire into the business to kind of scale it up So very interesting So we fundamentally know we're a technology company right and if I were to add to it I would say that we are a technology supply chain company at our core Everything we do is about making decisions Regarding our customers in sync with them using tech. So for example be it your Virtual experience on site be it on an app or be it on, you know, your mobile website Everything has to be done Using technology which gauges how customers Want to interact with you and therefore you interact with them and you present the interface that works best for them And on top of that we've added this entire layer of supply chain supply chain And I don't know whether are they created covered it in his conversation, but supply chain is everything for any business which delivers goods And for us we realize that very early we one of the things that's Fundament or used to be fundamental when pepper-fly wasn't there in the whole whole furniture in a home space Was that you must have noticed folks in the audience also that it used to be a very local business So used to have a manufacturer who would be say based out of Delhi and he would be selling products in a hundred kilometer radius around them And we realize that for variety and choice to actually proliferate We needed to create pipes which allowed a person in Delhi to sell to a person backlock And so therefore the supply chain was something that had to be created and done really well But then again, you know, there are supply chains and there are supply chains The good supply chains are all got to operate on data And data therefore is the bedrock for almost every single decision that gets made in our supply chain So, you know, you've you've heard of the traveling salesman problem It's it's like an OR problem classic or problem Which used to be how much do you stuff the containers that you move and how fast do you move them? And so our entire supply chain is actually in works on that algorithm and works on works to get That data which allows us to be super efficient while ensuring that you know user experience is maintained So everything we've done is technology and I think that's how we think of ourselves a tech company even our stores You know, we don't sell anything from our stores. Our stores are provide a virtual shopping experience to people So if tech wasn't there frankly a stores would have existed because at the end of the day in a Let's say a 3000 square feet store. How many pieces of furniture and decor can you put in perhaps 500? We have a hundred thousand pieces online So therefore if there was no tech, I would never have been exposed able to expose my Catalog to people so everything we do is technology is where we come from absolutely I mean data drives decision-making to the you know point of Human intelligence kind of being undervalued these days I want to tell you a small anecdote about decision-making Amrish went to I am Cal and after finishing that I read about this online After finishing that he had a few days before the next job started and he decided to go for a short break So after he came out of his college with his friend To decide where to go He did a coin toss Right, there was no data available at that time if there was he ignored the data Right, he did a coin toss and where to go heads was left tails was right He got heads and he ended up going to northeast if I'm not mistaken But you can't do that today if you're running a business like pepper fry Though having said that I'm sure gut feel and you know things that you've seen also play a very important part in your Decision-making apart from just what your data analyst is telling you absolutely. So data analysis I think is So there are there are two types of decision-making. I think there's deductive decision-making Where yet, you know, you look at the data and it tells you an answer and you deduce from the data The answer and the other type of decision-making tends to be inductive data Inductive decision-making inductive decision-making is what we are fans of at pepper fry So you have a bunch of data you recognize the patterns that that data is is Establishing in front of you and you look to seek the insight in those patterns and based on the insight on those patterns And hopefully we won't get replaced by charge dbt soon But based on the insights from those patterns. We are able to you know do something which is So one of our values and I'm sorry if I'm digressing a little is is this thing called making magic So making magic is you know effectively you you find out the difference between what people perceive and You find out what is reality and in the middle of which lies an insight which you can actually build a really great business on And that's all about pattern recognition That's all about inductive logic and that's something that you know We keep trying to get better at but that's something that's part of our DNA at pepper fry Yeah, I mean there's a joke in the you know consumer business that most of the time research is used to back the decisions You've already taken so I think inductive decision-making is you know something on those lines Tell us you know a lot of businesses a lot of industries, especially the brick-and-mortar ones are sort of You know standing between two stools on one side is the Like in the case of furniture there is these mom-and-pop stores and you know old sort of Markets on the other hand you have multi-nationals like IKEA Which are again doing fantastic work? You are trying to disrupt an ecosystem which where the where consumer habits are very entrenched To some extent the product requires touch and feel Right visually as well as you know otherwise So how do you kind of you know go against these two entrenched ecosystems on one side large Multilationals on the other side entrenched markets and also user behavior, right? You can't change user behavior unless unless you do a Very superior quality product with you know very strong usp's So it's very interesting the so let me take this example of perception and reality So all of us believe that and we I'm certain most people in this audience would believe that Furniture requires touch and feel But if you go back 20 years and you look at a typical buying experience for anybody in Furniture or in home decor there would have been one small mom-and-pop shop Which would have been near your house. You would know the uncle who runs the shop you go to that shop Uncle would have one sofa and you would say Do you have more and uncle shop would be perhaps 1500 2000 square feet large and outward come a catalog and He would order BBC good homes or some great indoor magazine and he would say you know what I can and he would point out a So far then it's I can make it for you and We would place our orders for the sofa based on the picture that we were seeing in that magazine so effectively even when we were buying furniture we went touching and feeling it and That was the insight that Arshish and I had when we started pepper fry. We got to our first About 60 million dollars Without ever having anybody touch any piece of furniture for us And you know and that was the insight Indians all of us were actually buying off pictures And we said you know what the in the internet is perhaps the best method of showcasing pictures And so therefore let's build a business which relies on the fact that the internet can Demonstrate to a customer every possible angle through a picture and people will buy and that was our bet The other interesting thing was our bet was the more you show to customers The wider selection they will buy which is completely counterintuitive to any manufacturing logic So therefore when it came to you know the entire ecosystem the point that you made We actually decided we are not going to fight anybody in the ecosystem We're actually our job is to get everybody in the ecosystem on to pepper fry dot com You know today IKEA doesn't sell on pepper fry dot com But we'd love for them to sell on pepper fry dot com right? I mean every possible mom-and-pop store that you can think of sells on pepper fry dot com And and that's how this works. I mean we work with thousands of merchants who manufacture great products We manufacture nothing. So therefore our incentives are not misaligned with their incentives Their goals have to be in the ecosystem to make great products. Our goal is to get them buyers and I think that makes for a great partnership. It makes for great synergies. So it's a method of figuring out how you how you You know kind of disrupt the ecosystem without actually disrupting it and I think we did that quite well Yes, the new P of marketing as I mentioned the beginning partnership Becoming even more relevant in marketing in the content business. Let me come to the sort of marketing part of the business. I'm rich now you know You mentioned You know, you're a company unusual technology digital company which still spends significant amount of money on you know Advertising on legacy platforms on traditional media While digital advertising this marketing through digital means occupies a lot of mind space lot of you know bandwidth of CMOs and Founders today one as a founder. How much of you know, how much of time and bandwidth do you spend in you know looking after marketing activities or what kind of detailing do you get into and and With regards to digital marketing, you know, where does that spend go to you spend more on search You look at more of influencer marketing. You look at more of you know content curation. What kind of sort of you know spread do you? So it started the beginning. I'm an ex marketing. I so I started life as a brand manager with Cadbury And so therefore there's part of marketing which is in my blood, right? I Wouldn't say that I was a great marketing ever. I was a marketing guy So therefore even today when it comes to figuring out, you know, how the brand needs to be positioned How do we evolve the brand for a evolving customer? That's stuff that really interests me I also think that as a founder it gives me an early insight into what's going to happen five years from now Look, our category is not one where you're gonna have Penetrations for online home furnishings and furniture going up from 3% to 13% in the span of one year It's not gonna happen ours is a category where this will be a multi-year compounding, right? So you'll go from three to four to six to nine over 20 years So if you're in a category such as this you need to know what's gonna happen five years from now You need to know what's gonna change seven years from now And if you are connected with the customer your ability to figure out what's going to happen a few years later Tends to be higher. So therefore as a founder that's something that I gain from right What are the things that I'm really interested in of course research is awesome. I mean it tells you things which frankly You otherwise would not have known and I think the best form of research and I was taught this in FMCG was Sit in a store quietly in a corner and watch our customers basically interact with your product And so therefore as we set up pepper fry studios one of the things that we do fairly consistently is Basically spend time in our studios and just watch what customers are doing and you learn so many things from that, right? Plus then there's proper quant research. There's quality search and all of that So research is something that's super interesting the other area which I focus a lot on and this is perhaps also because We are a technology company is this entire area of natural search Right, there is so much you can do to make your Site your business more attractive to people out there and you don't need to really spend money to do that You need to get your tech right. You need to get your UI UX right You need to get the way you you showcase content right all of those and those don't cost you too much money What costs you money tends to be the internet marketing? So I'm really interested in anything that doesn't cost us too much money, right? So as a founder again and as a businessman that's super important the third aspect of of marketing, which I am is is You know, I love being involved in the filmmaking process I don't know whether I add much value, but it's great to see your brand come live, right? So it's something that I I wouldn't sit in for a PPM, but I mean I would definitely hear the script before, you know, it's it's approved for production So these are three things which I think from a from my roots as a marketer as well as my Requirements as a founder. I think are both Actually come together quite well As I mentioned, you know digital marketing though you still use a lot of traditional Means of marketing but digital marketing is really One of the driving forces behind a lot of technology companies and it has many sort of Legs Which are the key areas that you focus on do you spend a lot of money on you know, for example curating content? in your space is You know search a very prominent part of the piece Influencer marketing, I mean it's it's you know the earlier era was hiring brand ambassadors That is kind of morphed into now hiring influencers across, you know, digital media or doing that What have you been have been your experiences with you know these various facets of you know digital? I think as the customer has evolved one of the things that's changed is earlier customers. Okay, so I'm sorry. I'm just taking a step back and doing a marketing thing. So I think most products in this world Follow a continuum, right? So you have on let's say the left side of the continuum is something called routine response behavior and on the right side extreme end of the continuum is something called extensive problem-solving Routine response behavior most customers will listen to anybody tell them what they should buy Right, it's fine. And that's where most celebrities most of the you know endorses Etc. Etc. Operator when it comes to the right side of the continuum, which is extensive problem-solving You need to be hearing what they should buy what customers should be buying customers need to be hearing this from people who know the space because information asymmetry tends to be very high in extensive problem-solving area and wherever there is information asymmetry you need people who actually Understand the product telling you about it. So therefore from that context Content so we we're a business which has you know, which operates on three so to speak Coordinates, right? So you have commerce, which is what we are all about There's community which is the people who actually understand the product people who are who make the product people who Influence others about the product and so on and then there's this entire area of content Which is a combination of how does content make commerce happen? How does content make the community more effective, right? So that's the that's the three things we operate on and therefore community for us is really important So you call them influencers. We call them homies So we actually have a program called pep homies and that program has close to about 500 die-hard interior decor aficionados who basically, you know Talk about us mostly good. Sometimes they don't like stuff We also tell them you know tell say stuff that we need to improve on because that's credibility, right? I mean that's also a way we will learn so we have the entire homies system which you know Basically generates a lot of traction for us. We reach close to let's say just on Instagram Close to eight nine million people through the pep homies community and eight nine million is not like small reach right, I mean, it's fairly significant reach so The entire community of homies works really well then the entire area of content for example Which is how do you have a great blog? I mean if you if you for example check out the pepper fry blog It's called bond homie and you'll find amazing stuff You'll find how you can do space savings for furniture in Bombay. You'll find how do you prep your furniture for? Monsoon, you know any kind of wood furniture in Bombay You would notice that the drawer gets stuck in monsoons. That's basically because wood expands So it's got things like what you can do to ensure that that doesn't happen Because I mean those are things that consumers really seek and by virtue of us sharing that information We are settling the information asymmetry and it's very important to settle it in an extensive problem-solving Business like ours. So those are things we do. I mean and we are about commerce community and content I mean we are the confluence of it. Fantastic I think you're a unique combination of somebody who's done marketing who's now done it doing a technology product and also disrupting a sort of legacy brick-and-mortar Industry sort of a three-fold thing. Let me you know come to now a few larger things I see time is up. I'm gonna take you know maybe five ten minutes more About what's happening in the larger, you know startup D2C ecosystem You know we've seen The last six months bloodbath on in the D2C startup space I was chatting with somebody about you know what's happening in the media content space I won't name the company, but this company reported a revenue of 300 crores last year and a loss of two and a half thousand crores, right? These gaps while you had funding and you know sky-high valuations were sort of Funded by you know the money that came in now naturally valuations are impacted your business growth is impacted revenue Is not coming in hence the layoffs and so on so forth. What is your view as a you know as a founder of a? you know company About you know growth Versus profit right naturally when you when you look into grow a business You have to invest perhaps also take some losses on your balance sheet In hindsight, it's easy to look at all this and say you know this was madness But it happened, you know across the board across hundreds of companies billions of dollars was spent Now, you know when some kind of rationality is Settling down if you were to give a view on you know how to balance these two aspects and you know while you're building a business A sustainable business which last long term. What is what would your advice be? So I think every business. Okay, it's the so let me It's the duty of every business to grow Okay, if you set up a business and you say you know what? I don't want to grow It's not going to work then don't set up a business So it's the duty or the responsibility of every business to grow and I think that's that's paramount, right? However, it's very important to figure in this is where the aspect of profitability comes in right as to where is it that you lose money as You're growing and in this I actually break this up into two parts There's stuff that you there's the money that you make and you know in e-commerce in digital commerce you hear this term unit economics, right? Unit economics is nothing else, but how much money you make on the Direct costs on the on the every transaction that you do After netting out all the direct costs related with that transaction And the fact of the matter is that you should be in positive territory when it comes to you know again in digital commerce It's called contribution margins or the unit economics need to be positive That is a given if you're selling a product where you're losing money Every single instance that you're selling it after you incurred the direct cost you have no hope in hell of Ever becoming profitable you have no hope in hell. You'll just sell more product and you will lose more money So that's something which I think is non-negotiable from the standpoint of profitability You have to have unit economics which are kosher which actually make you money Then there's the second aspect which tends to be you know, you can call them corporate overheads You can call them Investments behind the brand you can call them capex investments behind setting up new stores or creating an extensive supply chain All of that I think you're allowed to lose money on It's okay because those are investments which are going to last you five ten fifteen years and as the business grows You will get as long as you're making money at a unit economics level You will at some scale be able to cover off the costs that you're incurring on the rest So that's how I have always thought about it. So in our business You know, we have the fortune of being operating in a first a high margin category Be we have super differentiation, right? Now differentiation often is is a word that I mean and this is a Cmo summit so differentiation something that comes up in marketing on a regular basis You know the only thing that differentiation actually should or gets for a brand if it's truly differentiated it gets you higher margins Right. So if you're building out a differentiated brand, you have to make higher margins It it's a spark for the course if you are not making higher margins, you don't have a differentiated brand So therefore we have the fortune of being in a category which has high margins. We've created a brand which is differentiated So therefore at a unit economics level we make tons of money After that, it's only a question of how much do you need to scale the business? How many thousand crores do you need to get to in order to be able to defray all the rest of the costs below the Unit economics and as long as you got that positive you will be profitable and that's how I've always thought about Fantastic, I think that's a that's a great answer last question. Umbrish as I said time is up Since you are a marketer yourself, you know In today's time when companies have made huge losses and valuation expectations was sky-high Cmo's typically struggled to explain to their CFOs specially and the founders whether Marketing money being spent is investment or cost, right? What advice would you give them? I? Would say change the conversation So never have a conversation with so you know what happens is CMOs will come from a perspective CFOs will come from one The conversation should not be about either of their perspectives They should potentially you know over a drink sit and discuss what the future of the brand should look like and Eventually, I'm telling you in the hardest of CFOs Understand and love brands who doesn't love a great brand doesn't want to spend Who doesn't want their name to be like or their brand name to be talked about by millions of customers? So even CFOs are softies I mean I would think so and it's it's just about having the conversation in the right manner Not having a conversation saying you know what I have this campaign lined up. I need 10 crores That's not the conversation. It's about the longer term vision for the brand etc. You know one of the interesting things that pepper fryer My CFO is a geek. He's a tech geek. He's He is CFO. Let's say 50% of the time the balance 50% of the time He's Chasing every possible tech thing that's happening and so on and he's also a great brand geek So having a conversation regarding marketing spends with him I think it's easiest conversation than marketing guys So you just got a you just got to pitch it right the way I read advice Don't go to CFO for asking for money for performance marketing show him a brand vision Chances are you you'll come up with you know more money than you originally asked for with that? Thank you. Thank you for the beautiful nugget umbrish and thank you for joining us in the evening And thank you for intently listening last session of the day as I said we started at 930. So it's been a long day Thank you. I hope it was insightful and we'll take a short break. I think and before we start the award ceremony Thank you. Thanks