1. Camel Consulting Alon, Hagar, Osnat, Noa
Pepperfry.com
Camel Consulting
Alon, Hagar, Osnat, Noa

2. Key Issues
Pepperfry is a pioneering vertical online retail platform- specializing in furniture and home products
India has a growing middle class as with it, the furniture industry is expecting to grow to 35B in 2020
India has a huge internet user base while only a small part of its customers shopped online
Pepperfry is facing competition from Ikea, urban ladder, livespace and more..
Pepperfry is a growing market leader in the category while experiencing a decline in profit

3. Problem definition
How can Pepperfry stay the leading player in the market and increase profit while facing competition and challenges ahead?

4. Challenges
How can Pepperfry grow its gross merchandise profit with the right listings?
How can Pepperfry reach a positive balance in its profits and EBITDA in coming year?
How can Pepperfry utilize new revenue channels?
How can Pepperfry continue innovating with new ideas?
What should Pepperfry do to tackle its international and domestic competitors?

5. 2018- 5.5 million registered customers
Indian Market
Pepperfry is targeting 25-3 million customers
million customers shop online
million internet users
1.4 Billion population
million registered customers
55%-60% repeat customers
Goal-
Increase customers from 25 billion - 35 billion in 2020
There is place to grow

6. Competitive Landscape
SMEs moving online: The living room, furniturewalla
Vertical
Online start-ups
IKEA
Pepperfry
Interior design solutions: Livspace Homelane CustomFurnish
Urban Ladder
Large domestic manufacturers and retailers: Durjan, Godrej Interio, Hometown, Nikamal
Online rental: Furlenco, Renticle, Rentmojo
Omni- Channel
Offline
Online
Horizontal players with limited focus on furniture: BigBazzar (Future), MORE megastore (Aditya birla), Star Hypermarket (tata&tesco)
E-commerce Portals: Fliakart, Amazon India, Snapsdeal
Horizontal – many products
Complicated market, but Pepperfry as a leader in category

7. Utlities+ décor are a doorway to increase gross merchandise profit
Current segments
Utilities + Home decor
Furniture
Created trust in online shopping
50% more chance to buy furniture
Utlities+ décor are a doorway to increase gross merchandise profit

8. Increase 35%-50% revenues in 3 years. Today 20% only.
Pepperfry revenues
Goal-
Décor- utilities-
Increase 35%-50% revenues in 3 years. Today 20% only.

9. Offering of more utilities but earning more from furniture
Number of products
Offering of more utilities but earning more from furniture

10. Product Pricing

11. Supply Chain Supply chain as key for furniture business
Supply as a major strength of company
Track Feedback & seller performance
Transfer to supplier
Fee charge of end customer
Marketing
Assembly
Distribution centers
Store in warehouse & fulfillment center
Pick up from suppliers
Find suppliers & check quality
Supply chain as key for furniture business

12. Competitive advantage is significant
UVP
Omni channel chain
Small-medium business- full support to suppliers
Engaged in all supply chain process (except form manufacturing)
Low prices
2% of damage to deliveries only
Customer Service
Competitive advantage is significant

13. Offline as an important part of business
Offline Analysis
20% total of business-
34 offline stores
7 franchise- seller helps to sell online (gets 10% percent)
27 other- studio stores
Goal- double to 70 stores in march 2019
Offline as an important part of business

14. Alternatives Market Development Diversification Market Penetration
Product Development
New
Market
Existing
Existing
New
Product

15. Need to base in India, due to huge potential & risks
Alternatives
New Market
New Product
Feasibility -- -
Suitability
Low Risk
Profitability ++ +
Time to Market
Need to base in India, due to huge potential & risks

16. Implementation Plan- Market penetaration
Online to Offline
New customers
3D feature
Last chance marketing
Buying data on consumer behaviour to understand listings

17. Customers segmentation
👤 👨
Mahandra
Muhamad
30+
Professional
Medium-High priced products
New permanent home
Chic & urban trends
Regular furniture
22-29 years old
Student
Low priced products
No permanent home
Likes trends
Rental furniture
Need to reach population
With growth of middle class, segmentation is needed

18. Implementation plan- Marketing
million yearly costs over all
50% offline (performance oriented)
50%- digital marketing
15-20%- content marketing (video, web series)- suitable for millennials
Sponsored marketing as a key for profits
Focus on content marketing & add sponsored marketing for suppliers

19. Implementation Plan Pop-Up saloon Online to Offline Open new studios
Middle class as targeted audience
-Open Spaces in work places
Students targeted audience- focusing on rental furniture
-Sale day in campuses
-Demos in dorms
Online to Offline
Open new studios
new
new
new
(Leading to 70)

20. Implementation Plan
B2B:
Hotels
WeWork
Big offices
Offer discounted prices for products
New customers
B2G:
Institutions & governmental agencies
Offer free governmental labels
Promote Holiday gifts to employees (utilities & décor)
Utilize supply chain, especially deliveries & warehouse

21. 3D feature in online app-virtual Home
Implementation Plan
3D feature in online app-virtual Home
Design your own living room with computerized simulated 3D feature.
Cooperation with start ups
Cutting edge tech as the way deal with millennials

22. Implementation Plan Last chance marketing
Locate special décor + utilities products next to cashier
Last chance marketing
Pop up banners in purchase online

23. Implementation plan timeline
2018
2019
2020
online to offline
Popup SALON
Pop up Department
Students and universities
corporate with student unions R
Pop up salons (rental pop up)
Open and urban spaces
Locate potential locations
corporate with municipalities
design and lunch
Studios
Reach out to potential franchisers
open new studios 10 15

24. Implementation plan timeline
2018
2019
2020
New Customers
B2B
Hotels & Big companies
Premium accounts manager
Target Market strategy
B2G
corporate with Gov officers
big delivery packages
offical labels
Virtual home 3D
scout and partner with start-up
launch
free
5% comission
8% comission
Marketing and Profit
Last chance
online - setup on web and APP
Offline - re-arrange cashier area
sponsered marketing
Decore + utilisation
furniture
Listing
Enreaching DATA ON customers
scout and partner with data companies
adjust listing accordingly

25. Finance

26. Pepperfry Financial - Projections
Finance
Exhibit 1
Pepperfry Financial - Projections
INR M
2018
2019
2020
Revenue
341
439
992
2001
2580
3,836.5
5,704.9
8,483.3
29%
126%
102%
49%
Opex
-883
-801
-2247
-4993
-5066
(5,218.0)
(5,374.5)
(5,535.8)
-9%
181%
122% 1% 3%
Profit
-542
-362
-1255
-2992
-2486
(1,381.49)
330.38
2,947.50
GMV
582
642
2202
5122
6500
12,831.1
25,329.0
50,000
97%

27. Finance Franchise cost Flat 1 Setup 4 Infrastructure Display units 1.5
Total
7.5
Sales
5,000,000
Comission (10%)
500,000
Peffy yearly rev
4,500,000
# of years comission cover total invest 15

28. Pepperfry Financial - Projections
Finance
Exhibit 1
Pepperfry Financial - Projections
INR M
2018
2019
2020
Revenue
341
439
992
2001
2580
3,836.5
5,704.9
8,483.3
29%
126%
102%
49%
rev decore + utilities
20%
30%
40%
50%
516
1,151
2,282
4,242
rev furniture
80%
70%
60%
2,064
2,686
3,423
Opex
-883
-801
-2247
-4993
-5066
(5,218.0)
(5,374.5)
(5,535.8)
-9%
181%
122% 1% 3%
Profit
-542
-362
-1255
-2992
-2486
(1,381.49)
330.38
2,947.50
GMV
582
642
2202
5122
6500
12,831.1
25,329.0
50,000
97%

29. Risk Mitigation Risk: Competition from big players Knowing the market
Bring people that speak local language
Risk:
Not able to reach clients in B2B
Execute premium products
Big discounts for hotel
Risk:
Not able to reach Millennialis
1. Hire popular presenter for marketing

30. Pepperfry Financial Sum
Appendix
Exhibit 1
Pepperfry Financial Sum
INR M
Revenue
341
439
992
2001
2580
Profit
-542
-362
-1255
-2992
-2486
GMV
582
642
2202
5122
6500

31. Appendix Category Utilities Décor Furmiture No. of listing 70,000
10,000
Supplier base
Standard Manufacturers
Semi-standard, artisnanal
non-standard, artisnanal
Av.selling price
1,500
2,500
18,000
% of revenue
20%
80%
% of transactions
70%
30%
% gross margin
5%-25%
30%-50%
45%-55%
Time to purchase
2-3 days
1-2 weeks
2-6 weeks