1. 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

2. 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

3. 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

4. TARGET MARKET Problem Analysis Alternatives Financials Implementation
Risks

5. TARGET MARKET Problem Analysis Alternatives Financials Implementation
Risks

6. TARGET MARKET Of the 30% of our target market, only reached 18%
Problem
Analysis
Alternatives
Financials
Implementation
Risks

7. 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

8. Core competencies Portfolio Curation Supplier Management Logistics
Problem
Analysis
Alternatives
Financials
Implementation
Risks

9. Key Success factors GMV: measure of growth Problem Analysis
Conversion Rate
User Acquisition
Problem
Analysis
Alternatives
Financials
Implementation
Risks

10. 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

11. Core competencies Portfolio Curation Supplier Management Logistics
Problem
Analysis
Alternatives
Financials
Implementation
Risks

12. Enter New Geographical Markets
Infrastructure
Logistics
Market Knowledge
Supplier Relationship
Problem
Analysis
Alternatives
Financials
Implementation
Risks

13. Stay in India and Expand Categories
Past Experience
Less Focused
Problem
Analysis
Alternatives
Financials
Implementation
Risks

14. Create a one-stop-shop by acquiring “Livspace”
New relevant Market
Synergy
Complete the user experience
Problem
Analysis
Alternatives
Financials
Implementation
Risks

15. 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

16. 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

17. 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

18. 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
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Financials
Implementation
Risks

19. 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, INR MN
Problem
Analysis
Alternatives
Financials
Implementation
Risks

20. FINANCIALS Problem Analysis Alternatives Financials Implementation
Risks

21. 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

22. IMPLEMENTATION One-Stop Shop Problem Analysis Alternatives Financials
Marketing
Acquisition
Technology
Problem
Analysis
Alternatives
Financials
Implementation
Risks

23. 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

24. 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

25. 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

26. 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

27. 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

28. 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