Building Sustainable Internet Retail Enterprise by ShopClues Founder Sandeep Aggarwal

Building Sustainable Internet Retail Enterprise Sandeep Aggarwal Founder & CEO

What is ShopClues.com India s first and largest managed marketplace with a platform approach, empowering brands and retailers to exploit the E-Commerce opportunities Category, product, price, and brand agnostic Customer Care Among the top 5-6 Largest E-Commerce company in India and the fastest growing Company started out of Silicon Valley; operating in India for 12 months World-class team with 75 years of combined experience in E-Commerce, Internet, and retail 4million+ monthly visitors; 6k+ merchants, 2k+ brands, 800k+ Facebook Fans

Why ShopClues.com? Sellers Buyers 1. Your own branded online store manage anytime, anywhere on any device 1. Great selection 2. Low price 2. Access to millions of online shoppers 3. Fast delivery 3. A ready to deploy E-Commerce Technology platform with full suite of E-Commerce services 4. Reliable sellers 5. Authentic brands 4. Effective, low cost, and scalable 6. Outstanding customer services 5. Pay only when you sell 6. Focus on your core competencies, leave the heavy lifting of E-Commerce on us

E-Commerce Opportunity is Now India is now the 3rd largest country in terms of Internet population but not revenue top-10 for E-Commerce 1. 2. E-Commerce has only 0.1% penetration 3. India hit the tipping point for the E-Commerce adoption in 2010 and next 10 year the market can be 120x bigger $10bn by 2015 (Rs. 50k Crores) and $60bn by 2020 (Rs. 3 Lacs Crores) 4. Income levels going up, median age 25, Internet adoption widening but accessibility remains a problem 5. The occupancy cost for brick and mortar retail is one of the highest in the world with not abundant organized retail space 6. Inherit E-Commerce benefits : very scalable, 24/7, 365 days, wider reach, better inventory management, low capital expenditure, better margins

India E-Commerce is Currently at Where China was in 2003 1. India retail will likely touch $1trillion by 2020 and at 6% penetration (where China was in 2010), the E-Commerce will touch $60bn in India 2. If India were to see E-Commerce adoption like China, India can reach $60bn in GMV by 2015-16

E-Commerce Outlook for India Highly Encouraging India E-Commerce Outlook ($bn.) Penetration from 0.1% to 6.0% by 2020 (65% CAGR) 1. In our view, in India E-Commerce is where US was in 1999 and China was in 2004 India E-Commerce is in 1st phase with no player over $150mm in GMV (vs. in US, where eBay has $32bn and Amazon has $28bn) 2. 3. No pure play fully managed marketplace in India currently 4. We believe that the online shoppers in India will likely go up by 10x from 8mm currently to 80mm and average spend per shopper will go up 5x from $50 to $250 by 2016-17 5. E-Commerce in India is leap-frogging the organized retail revolution

Building sustainable Internet Retail enterprise 1. Take a long-term approach 2. Create a start-up culture 3. Be ready for capital investments phase 4. Many offline problems will persist and be ready for new set of problems as well 5. Solve fundamental issues 6. Be metric driven 7. Harness your core competencies & competitive advantage 8. Understand E-Commerce basics 9. Do not under estimate marketing cost 10. Know the power of scale

Take a long-term approach 1. Are you ready for a minimum of 3-5 years of commitment? 2. Nothing is going to change overnight and offline will remain your family Mercedes 1. Do not be afraid of making mistakes

Create a start-up culture 1. Infuse entrepreneurial zeal and passion 2. No comingling with your existing business 3. Ability to attract talent

Be ready for capital investments phase 1. Unless your are a very large retailer or brand, building Internet retail is not cheap 2. Are you ready for long-term capital investment?

Many offline problems will persist and be ready for new set of problems Things do not change with the Internet 1. Sourcing 2. Supply chain 3. Inventory risk New problems with Internet 1. COD 2. Higher returns 3. Pricing pressure 4. Unchartered territory on many fronts e.g. marketing, payments, delivery

Solve fundamental issues 1. Focus on customer value proposition 2. Be data driven 3. Supply chain has to be streamlined 4. Payment issues are resolved 5. Return policies are addressed 6. Packing and delivery experiences is world-class

Be metric driven If you can not measure, you can not control 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Other indirect expenses Traffic Conversion Items in basket AOV Direct Cost CPA Cohort SLA Thru-put

Harness your core competencies & competitive advantage 1. Sourcing legacy 2. Up and running business 3. In-store pick-up 4. Customer acquisition 5. Brand 6. Network 7. Economy of scope

Understand E-Commerce basics Technology Retail Operations

Do not under estimate marketing cost 1. Be ready to loose money on 1st order, barely break- even on 2nd, and perhaps make money on 3rd 2. Digital marketing mix is not cheap 3. Buyers have no loyalty

Know the power of scale 1. Allocating resources in anticipation is never easy 2. Unit cost will be highly unattractive until you achieve scale 3. Capacity planning will be challenging

Thank You!! Sandeep Aggarwal, Founder and CEO sandeep@shopclues.com For your online store at ShopClues.com www.Shopclues.com/sell Sell@shopClues.com