Pepperfry.com: We design, we deliver, we build 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 How can Pepperfry.com grow and profit from its leading advantage? Build revenue channels Strengthen position as omnichannel warehouse Respond to competition from international entrants Problem Analysis Alternatives Financials Implementation Risks
Create a one-stop shop solution by acquiring a designer company recommendation Create a one-stop shop solution by acquiring a designer company We design We deliver We build Problem Analysis Alternatives Financials Recommendation Risks
TARGET MARKET Problem Analysis Alternatives Financials Implementation Risks
TARGET MARKET Problem Analysis Alternatives Financials Implementation Risks
TARGET MARKET Of the 30% of our target market, only reached 18% Problem Analysis Alternatives Financials Implementation Risks
Huge untapped market in India left to explore Swot analysis S Focus on furniture and home décor Curated platform of carefully selected products Built supplier ecosystem Strengthened supply chain Experience centre W Abandon trusted local furniture Skepticism about quality, delivery and assembly Usual e-commerce concerns 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 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 GMV: measure of growth Problem Analysis Conversion Rate User Acquisition 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 Infrastructure Logistics Market Knowledge Supplier Relationship Problem Analysis Alternatives Financials Implementation Risks
Stay in India and Expand Categories Past Experience Less Focused 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
Alignment with core competencies PAAR Analysis Alternatives Potential to Growth Alignment with core competencies 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
We plan to achieve raise of 150% in current users FINANCIALS Current users- 5.5M Target Market – 30M Internet base – 480M 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 15M Marketing plan Ongoing 120M Change Management Team 150M Problem Analysis Alternatives Financials Implementation Risks
By the year 2021/22 – 4,166 INR MN and GMV of 89,441.29 INR MN 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 Problem Analysis Alternatives Financials Implementation Risks
Create a one-stop shop solution by acquiring a designer company recommendation Create a one-stop shop solution by acquiring a designer company We design We deliver We build Problem Analysis Alternatives Financials Recommendation Risks
IMPLEMENTATION One-Stop Shop Problem Analysis Alternatives Financials Marketing Acquisition Technology 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 High Create an incentive plan for designers (if sell more of Pepperfly.com’s products, receive bonus) Company culture will change Moderate Orientation for all employees to get to know one another Problem Analysis Alternatives Financials Implementation Risks
Create a one-stop shop solution by acquiring a designer company recommendation Create a one-stop shop solution by acquiring a designer company We design We deliver We build Problem Analysis Alternatives Financials Recommendation Risks