Strategy for Pepperfry.com Growth
Presentation on strengthening omnichannel warehouse position, responding to international competition, building revenue channels, and acquiring a designer company for Pepperfry.com growth strategy.
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Presentation Transcript
Goodman School of Business Presented by: Goodman Consulting Group Presented to: Ambareesh Murty and Ashish Shah, Co-Founders of Pepperfry.com PEPPERFRY.COM: WE DESIGN, WE DELIVER, WE BUILD
PROBLEM STATEMENT Strengthen position as omnichannel warehouse Respond to competition from international entrants Build revenue channels How can Pepperfry.com grow and profit from its leading advantage? Problem Analysis Alternatives Financials Implementation Risks
RECOMMENDATION We deliver We design We build Create a one- stop shop solution by acquiring a designer company Problem Analysis Alternatives Financials Recommendation Risks
TARGET MARKET Internet vs Non-Internet Users in India 44% 56% Internet Users Non-Internet Users Problem Analysis Alternatives Financials Implementation Risks
TARGET MARKET Online Shoppers vs. Pepperfry.com s Target Market Modern, tech-savvy, upwardly mobile and young professionals 30% 70% Online Shoppers Pepperfry.com's Target Market Problem Analysis Alternatives Financials Implementation Risks
TARGET MARKET Current Customer Base vs. Target Customer Base Of the 30% of our target market, only reached 18% 18% 82% Pepperfry.com Target Current Customer Base Problem Analysis Alternatives Financials Implementation Risks
SWOT ANALYSIS S Focus on furniture and home d cor Curated platform of carefully selected products Built supplier ecosystem Strengthened supply chain Experience centre O Only 5.5M customers of 30M target market are regular customers Competition helps build excitement about furniture Launch of Privilege program to partner with designers W Abandon trusted local furniture Skepticism about quality, delivery and assembly Usual e-commerce concerns T Increasing international entrants in the market Huge untapped market in India left to explore Problem Analysis Alternatives Financials Implementation Risks
CORE COMPETENCIES Portfolio Curation Supplier Management Logistics Problem Analysis Alternatives Financials Implementation Risks
KEY SUCCESS FACTORS User Acquisition Conversion Rate GMV: measure of growth Problem Analysis Alternatives Financials Implementation Risks
ALTERNATIVES Enter New Geographical Markets Stay in India and Expand Categories Create a one-stop-shop by acquiring Livspace Problem Analysis Alternatives Financials Implementation Risks
CORE COMPETENCIES Portfolio Curation Supplier Management Logistics Problem Analysis Alternatives Financials Implementation Risks
ENTER NEW GEOGRAPHICAL MARKETS Logistics Infrastructure Supplier Relationship Market Knowledge Problem Analysis Alternatives Financials Implementation Risks
STAY IN INDIA AND EXPAND CATEGORIES Past Less Focused Experience Problem Analysis Alternatives Financials Implementation Risks
CREATE A ONE-STOP-SHOP BY ACQUIRING LIVSPACE New relevant Market Synergy Complete the user experience Problem Analysis Alternatives Financials Implementation Risks
PAAR ANALYSIS Alignment with core competencies Alternatives Potential to Growth Ability to disruption Risk Management Enter New Geographical Markets Stay in India and Expand Categories Create a one-stop- shop by acquiring Livspace Problem Analysis Alternatives Financials Implementation Risks
ASSUMPTIONS Leverage Livspace s competencies to create additional value Consolidated company s financials begin 2019/2020 onwards Series F Funding coupled with additional debt will finance acquisition Expect synergies and value added between entities to be significant 2+2=5 Incremental operational savings through eliminating duplication, integrating logistics capabilities Bigger piece of the pie through pushing home brands through Canvas Maintain CAGR of 65%, and push just over 70% from 2019/2020 Expected Livspace Revenue in FY 2017/18 = INR 1000M Maintain margins of 40-55% but push more house brands with higher margins Problem Analysis Alternatives Financials Implementation Risks
FINANCIALS Internet base 480M Target Market 30M Current users- 5.5M We plan to achieve raise of 150% in current users Problem Analysis Alternatives Financials Implementation Risks
FINANCIALS Implementation Cost Type of cost Amount (INR Millions) Development of New Mobile App One time 6.7M IT integration of Livspace into existing systems One time 15M Marketing plan Ongoing 120M Change Management Team One time 150M Problem Analysis Alternatives Financials Implementation Risks
INR MILLION 2017/18 2018/19 2019/20 2020/21 2021/22 Revenue 3,328.20 4,326.66 6,489.99 12,330.98 27,744.71 Profit/Loss (2,263.00) 254.00 768.00 1,543.00 4,166.10 GMV 8,255.00 12,731.60 29,076.40 52,337.52 89,441.29 Average GMV growth 3 year moving average = 134.2% Revenue % growth 3 year moving average = 86% Expected GMV in year 2020 = 45500 By the year 2021/22 4,166 INR MN and GMV of 89,441.29 INR MN Problem Analysis Alternatives Financials Implementation Risks
FINANCIALS GMV Profit/Loss 100,000.00 5,000.00 90,000.00 4,000.00 80,000.00 3,000.00 70,000.00 60,000.00 2,000.00 50,000.00 1,000.00 40,000.00 - 30,000.00 2017/18 2018/19 2019/20 2020/21 2021/22 20,000.00 (1,000.00) 10,000.00 (2,000.00) - 2017/18 2018/19 2019/20 2020/21 2021/22 (3,000.00) Problem Analysis Alternatives Financials Implementation Risks
RECOMMENDATION We deliver We design We build Create a one- stop shop solution by acquiring a designer company Problem Analysis Alternatives Financials Recommendation Risks
IMPLEMENTATION Marketing One- Stop Shop Technology Acquisition Problem Analysis Alternatives Financials Implementation Risks
IMPLEMENTATION: ACQUIRING LIVSPACE Merge offices Create one stop-shop solution We design using Pepperfry.com products to design a home We deliver sell furniture and deliver it to homes We build we will build the products in home Reduce unnecessary manpower We design! We deliver! We build! Problem Analysis Alternatives Financials Implementation Risks
IMPLEMENTATION: TECHNOLOGY Enhance current portal to include Livspace design capabilities Create an app for design and fit new furniture in space Pool technological resources From tech-savvy user to regular Internet user Problem Analysis Alternatives Financials Implementation Risks
IMPLEMENTATION: MARKETING PLAN Announcement of newly acquired company, Livspace Launch new marketing campaign online and in-stores Goal: Pepperfry.com is the place to go! Problem Analysis Alternatives Financials Implementation Risks
IMPLEMENTATION: TIMELINE 2018 2019 2020 2021 2022 Acquire Livspace Create One-Stop Shop Solution Launch New Media Campaign and Product Problem Analysis Alternatives Financials Implementation Risks
RISKS AND MITIGATION Risk Severity Mitigation Employee perspective: Livspace designers may be hesitant to use Pepperfry.com products Company culture will change Moderate High Create an incentive plan for designers (if sell more of Pepperfly.com s products, receive bonus) Orientation for all employees to get to know one another Problem Analysis Alternatives Financials Implementation Risks
RECOMMENDATION We deliver We design We build Create a one- stop shop solution by acquiring a designer company Problem Analysis Alternatives Financials Recommendation Risks
