Flipkart has initiated talks with India’s top online furniture marketplace Pepperfry for a strategic investment, said four people familiar with the matter, as the ecommerce giant explores ways to diversify its business through acquisitions and investments. The discussions, held last month, are preliminary and there is no guarantee a transaction will take place, these people said, declining to share more specific details or be identified.

With $4 billion in the bank, India’s largest online marketplace is aggressively scouting for opportunities in categories that can bring high repeat purchases or offer high prices, these people said. Flipkart soft-launched its grocery business last week and re-launched its furniture business in September, after having ventured briefly into both categories earlier.

Flipkart declined to comment on its talks with Pepperfry. A spokeswoman for the furniture marketplace did not offer a comment either, only saying: “As a practice, we do not comment on market speculation.”

For Flipkart, an investment in Pepperfry would open the doorsto a category that racks up high gross margins, second only to the fashion category. Flipkart registers margins of 20-40% in its fashion business, with its own labels yielding the higher end of the range.

(source:economictimes.indiatimes.com)