1. DeGroote Consulting Group Elizabeth, Chinomnso, Marley, Britney
Keep MOVE-ing forward
DeGroote Consulting Group
Elizabeth, Chinomnso, Marley, Britney

2. Pepperfry.com

3. Pepperfry.com

4. Pepperfry.com

5. Pepperfry.com

6. Pepperfry.com

7. Background

8. How might Pepperfry.com continue to innovate for sustainable profitability?

9. Key issues

10. Key issues
Competition
Increasing competition in both online and offline furniture markets
international entrants (e.g., Ikea)
horizontal marketplaces (e.g., Flipkart)
international and national manufacturers
online retailers (e.g., Urban Ladder)
Importance
Urgency
Competition
Profitability
Profitability
Pepperfry experienced a loss of INR 2.48b in 2016/17
Aim to be EBITDA positive in 12 to 18 months
Achieving profitability is critical to sustain Pepperfry
Innovation
Innovation
Innovation mindset required to maintain position and take advantage of real estate boom as well as growing middle class
Key takeaway
Pepperfry must continue to innovate to maintain market share and earn a profit.

11. Analysis

12. Customer journey
Key takeaway
Pepperfry can capture more value by enabling an omnichannel customer experience.

13. Financial analysis
Market Share
Online USD
$700,000,000
Online Rupee
INR 46,666,666,667
Portion of Current Market
INR 2,064,000,000
4.4%
Key takeaway
Pepperfry is not capturing enough of the furniture market to earn a profit.

14. Opportunities

15. 1 2 3 Opportunities Customization stations
Supply Chain as a Service (SCaaS) 2
Move studios 3

16. Customization stations1
Allow customers to customize Pepperfry branded furniture online and leverage franchise stores to enable customers to view different design features
Expected benefits
Increase customer satisfaction
Increase perception of value
Leverage supply chain efficiencies
Increase in addressable market
Considerations
Conflict with Pepperfry’s origins
Increased cost of production per item, reduced margin

17. Supply Chain as a Service (SCaaS)2
Expand existing supply chain capabilities to enable contracting of surplus capacity to other businesses
Expected benefits
Increased revenue
Increased resiliency to market changes through diversification
Considerations
Not aligned with existing customer base
Lack of focus may harm existing innovation and growth activities in primary market

18. Move studios 3
Make the furniture shopping experience mobile with branded studios in shipping containers with a variety of designs and exclusive time-limited styles
Expected benefits
Disruptive and innovative in the existing market segment
Access to additional consumer base
Increases focus on omni-channel customer experience
Considerations
Maintains reliance on existing market
Once introduced, competitors will follow Requires ongoing awareness of current studio locations

19. Determining your next move
factor
weight 1
Customization station 2
Supply Chain as a Service 3
Move studios
Innovation
0.5 4
Competition
0.3
Profitability
0.2
Total ►
1.8
3.5
3.8
legend
1 low
5 high

20. Preferred solution

21. Preferred solution
Mobility
Operations
Variety
Engagement
Year 1

22. MOVE-ing to meet your customer
Pepperfry.com

23. Implementation plan

24. Mobility ► Operations ► Variety ► Engagement
Key activities
Year 1
purchase trucks
legal consultation
hire drivers
Mobility
Considerations
environmental concerns
difficulty in hiring qualified drivers is possible

25. Mobility ► Operations ► Variety ► Engagement
Key activities
Year 1
plan routes
assign drivers
ship furniture to trucks
Mobility
Operations
Considerations
construction impacts planned routes

26. Mobility ► Operations ► Variety ► Engagement
Key activities
Year 1
hire influencer
design trucks
survey consumers
Mobility
Operations
Variety
Considerations
ability to get an influencer
survey does not yield numerous results

27. Mobility ► Operations ► Variety ► Engagement
Key activities
Year 1
digital campaign
truck pilot
monitor reviews
Mobility
Operations
Variety
Engagement
Considerations
low uptake of digital campaign
low turnout to pilot stations

28. Costing Sum of 0-3 months Sum of 6- 9 months Sum of 9- 12 months
Mobility
INR61.3 m
Buying trucks
INR4.7 m
Drivers
INR53.3 m
Legal team
INR3.3 m
Variety
INR13.3 m
Interior designer
Engagement
INR6.7 m
Digital campaign
Truck pilot
Grand Total
INR20.0 m
INR26.7 m

29. Financials Décor Furniture Furniture Rental Total Revenue 2013 2014
2015
2016
2017
2018
2019
2020
Décor
INR 68.20
INR 87.80
INR
INR
INR
INR
INR 1,677.26
INR 3,304.20
Furniture
INR
INR
INR
INR 1,600.80
INR 2,064.00
INR 3,405.60
INR 6,709.03
INR 13,216.79
Furniture Rental
INR 4,860.00
INR 9,720.00
INR 29,160.00
Total Revenue
INR 9,117.00
INR 18,106.29
INR 45,680.99

30. Key metrics

31. Key success metrics people Furniture rental consumers .0002% of market
target
timeline
people
Furniture rental consumers
.0002% of market
2 years
Mobile van visits
100
daily
profit
Gross merchandise value
INR 45 billion
CAGR
97%
process
Launch on time
1 year
ongoing
Minimal route disruption
<5% of routes

32. Risks + mitigation

33. Risks + mitigation trucks do not achieve direct sales H M
Likelihood
Impact
Mitigation
trucks do not achieve direct sales H M
online sales opportunities allow consumers to view and purchase after the mobile showroom leaves
influencer not acquired L
Pepperfry has disrupted the market and is well known to influencers, there is mutual benefit in this partnership
competition invades your market share
movement to a new market (mobile) with no competition allows for less competition
ineffective routes
2 months of planning routes allows you to look at potential disruptions and avoid them

34. Pepperfry.com

35. Appendix

36. Expected growth INR millions 2013 2014 2015 2016 2017 2018 2019 2020
Revenue Targeted
INR 341
INR 439
INR 992
INR 2,001
INR 2,580
INR 4,257
INR 7,024
INR 19,846
Revenue Actual Base Case
INR 8,386
INR 16,521
Profit/ (loss)
(INR 542)
(INR 362)
(INR 1,255)
(INR 2,992)
(INR 2,486)
Gross merchandise value
INR 582
INR 642
INR 2,202
INR 5,122
INR 6,500
INR 50,000
Gross merchandise value TARGET
INR 10,725
INR 21,128
INR 41,623
GMV/Revenue
171%
146%
222%
256%
252%
INR 9,365
INR 19,667