A Strong, sustainable future ahead of Pepperfry
Description: A Strong, sustainable future ahead of Pepperfry Presented to Mr. Murty Mr. Shah By Smurfit Consulting 1 Your challenge 2 To achieve IPO of INR132 billion in 2022 Our recommendations 3 Agenda 4 Analysis Geoff OBrien 5 The Indian Furniture
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slide1. A Strong, sustainable future ahead of Pepperfry Presented to Mr. Murty & Mr. Shah
By Smurfit Consulting 1<br>
slide2. Your challenge 2 To achieve IPO of INR132 billion in 2022<br>
slide3. Our recommendations 3<br>
slide4. Agenda 4<br>
slide5. Analysis Geoff O’Brien 5<br>
slide6. The Indian Furniture Market 6<br>
slide7. Competitors – Online Indian Furniture 7<br>
slide8. Pepperfry Capabilities and Resources 8 Brand Recognition of Pepperfry – 75% organic traffic Excellent Distribution system – 2% breakage, 92% 1st time delivery, NPS 60 Supplier system is deep with strong relationships Marketplace is leading furniture portal in India House Brand gives greater profitability and is 50% of GMV Credible investors raised USD$195m<br>
slide9. Pepperfry Financial Analysis 9<br>
slide10. Recommendation Monika Ghita 10<br>
slide11. Your aim is to achieve INR 50m GMV by 2020. 11 At present this target is not achievable until 2021;
Pepperfry will not become profitable until 2027.<br>
slide12. Create a Home Buyer Ecosystem
2. Pepperfry Rental Platform
Create a new market – new customer acquisition
Achieve more GMV
Participate in the shared economy trend
3. Grow GMV through House Brands Sales
Partner with bank of Mumbai to provide customer financing
Grow sales though highly profitable home brand sales
Expand studios to promote home brand sales (Franchise 90% - 10% Own) Strategies Considered 12 House Search Finance
Sourcing Legal
Advice Home Design Furniture Purchase<br>
slide13. Alternative strategies 13<br>
slide14. Recommendation: Grow GMV through House Brands Sales 14 Provide financing to customers
Customer loyalty credit card offering Digital marketing
TV advertising
Experience studios Franchise 20 out of 27 own studios
Establish 26 additional franchise studios by 2020
Introduce augmented reality googles in studios<br>
slide15. Through this strategy you will achieve profitability and IPO valuation of INR 132billion in 2022. 15<br>
slide16. implementation David Madigan 16<br>
slide17. 1. Implementation: Customer Financing 17 Bank Partner Bank of Mumbai (BoM) Embed customer financing tool on marketplace paid by BoM
Commission agreement with BoM paying Pepperfry
Balance sheet sits with BoM
Typical asset financing rates are 8-10% with net interest margin of 8-10%
Create loyalty credit card which is Pepperfry branded with BoM Deal construct Partnership discussion timeline 1 month head of terms agreement
6 months negotiation
12 months rollout<br>
slide18. 2. Implementation: Driving House Brand Sales 18 Marketing Channels Product Placement Priority on Marketplace
TV advertising focused on House Brands
Increase Content marketing for better SEO by:
Blogging (featured posts)
Video posts
Social media posts (#Pepperfry)
Sponsor Cricket Team Increasing franchise commission to 12% on House Brands from 10%
In owned stores prominent product placement Physical Stores<br>
slide19. 3. Implementation: Franchise Studio Expansion 19 70 Total studios by 2020 Owned Studios Franchised Studios 7 63 Replicate McDonalds franchise model of 90:10 franchise / owner
Lower capital expenditure versus owned stores
Develop case studies for entrepreneurs
Leverage local knowledge advantage
Hire head of franchises (costing $140k)
Hire 6 employees responsible for each franchise studio (10 studios per employee)
Leverage Augmented Reality technology in stores via Microsoft Hololens to drive customer experience<br>
slide20. IPO Timeframe 2019 2020 2021 2022 20 Appoint Investment Bank to be the main bookrunner Develop IPO prospectus Begin IPO Roadshow IPO at a valuation of INR 132 bn<br>
slide21. IPO Timeframe 21<br>
slide22. Risks and Contingencies 22<br>
slide23. A Strong, sustainable future ahead of Pepperfry By Smurfit Consulting 23<br>
By Smurfit Consulting 1<br>
slide2. Your challenge 2 To achieve IPO of INR132 billion in 2022<br>
slide3. Our recommendations 3<br>
slide4. Agenda 4<br>
slide5. Analysis Geoff O’Brien 5<br>
slide6. The Indian Furniture Market 6<br>
slide7. Competitors – Online Indian Furniture 7<br>
slide8. Pepperfry Capabilities and Resources 8 Brand Recognition of Pepperfry – 75% organic traffic Excellent Distribution system – 2% breakage, 92% 1st time delivery, NPS 60 Supplier system is deep with strong relationships Marketplace is leading furniture portal in India House Brand gives greater profitability and is 50% of GMV Credible investors raised USD$195m<br>
slide9. Pepperfry Financial Analysis 9<br>
slide10. Recommendation Monika Ghita 10<br>
slide11. Your aim is to achieve INR 50m GMV by 2020. 11 At present this target is not achievable until 2021;
Pepperfry will not become profitable until 2027.<br>
slide12. Create a Home Buyer Ecosystem
2. Pepperfry Rental Platform
Create a new market – new customer acquisition
Achieve more GMV
Participate in the shared economy trend
3. Grow GMV through House Brands Sales
Partner with bank of Mumbai to provide customer financing
Grow sales though highly profitable home brand sales
Expand studios to promote home brand sales (Franchise 90% - 10% Own) Strategies Considered 12 House Search Finance
Sourcing Legal
Advice Home Design Furniture Purchase<br>
slide13. Alternative strategies 13<br>
slide14. Recommendation: Grow GMV through House Brands Sales 14 Provide financing to customers
Customer loyalty credit card offering Digital marketing
TV advertising
Experience studios Franchise 20 out of 27 own studios
Establish 26 additional franchise studios by 2020
Introduce augmented reality googles in studios<br>
slide15. Through this strategy you will achieve profitability and IPO valuation of INR 132billion in 2022. 15<br>
slide16. implementation David Madigan 16<br>
slide17. 1. Implementation: Customer Financing 17 Bank Partner Bank of Mumbai (BoM) Embed customer financing tool on marketplace paid by BoM
Commission agreement with BoM paying Pepperfry
Balance sheet sits with BoM
Typical asset financing rates are 8-10% with net interest margin of 8-10%
Create loyalty credit card which is Pepperfry branded with BoM Deal construct Partnership discussion timeline 1 month head of terms agreement
6 months negotiation
12 months rollout<br>
slide18. 2. Implementation: Driving House Brand Sales 18 Marketing Channels Product Placement Priority on Marketplace
TV advertising focused on House Brands
Increase Content marketing for better SEO by:
Blogging (featured posts)
Video posts
Social media posts (#Pepperfry)
Sponsor Cricket Team Increasing franchise commission to 12% on House Brands from 10%
In owned stores prominent product placement Physical Stores<br>
slide19. 3. Implementation: Franchise Studio Expansion 19 70 Total studios by 2020 Owned Studios Franchised Studios 7 63 Replicate McDonalds franchise model of 90:10 franchise / owner
Lower capital expenditure versus owned stores
Develop case studies for entrepreneurs
Leverage local knowledge advantage
Hire head of franchises (costing $140k)
Hire 6 employees responsible for each franchise studio (10 studios per employee)
Leverage Augmented Reality technology in stores via Microsoft Hololens to drive customer experience<br>
slide20. IPO Timeframe 2019 2020 2021 2022 20 Appoint Investment Bank to be the main bookrunner Develop IPO prospectus Begin IPO Roadshow IPO at a valuation of INR 132 bn<br>
slide21. IPO Timeframe 21<br>
slide22. Risks and Contingencies 22<br>
slide23. A Strong, sustainable future ahead of Pepperfry By Smurfit Consulting 23<br>