Easy Shoppe - Business Plan Draft

MP: Mechian Projects’ – Online Retail Store

MECHIAN PROJECTS’

A Window to the Entrepreneur World

Business Plan: Online Retail StoreRETAILER OF THE FUTURE!

MECHIAN PROJECTS’

Bangalore

[email protected]

Business Plan

Author: Raghunandan Rao P.Year: 2013, Oct


MECHIAN PROJECTS’

A Window To The Entrepreneur WorldO

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Contents

• About Mechian Projects’

• Introduction to the Business Idea

• Market Information

• Resulting Evolution

• The Attractive Future

• Business Process

• Value Addition

• Infra Requirements

• Organization Structure

• Revenue & Growth

• Ramping Up

• Next Steps


MECHIAN PROJECTS’

A Window To The Entrepreneur World

Mechian Projects’ – A window to the Entrepreneur

World

About Mechian Projects’

Targeting Business Excellence…

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- Business Modeling

- Business Planning

- Business Implementation Support

- Start Up Strategies

- Business Support

- Business Development Initiatives

MPs’


MECHIAN PROJECTS’


Linking E-Commerce, Transportation & Courier

Networks, Local Global Retailers: the Business Idea

Online Retail Store – Introduction to the Business Idea!

A Global Retail Network connecting Local Retailers delivering

products to customers everywhere!

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• Local Retail Network connects the locally present retailers to customers, promising

delivery at minimum service time to customers.

• Connects unique product sellers across the globe with effective supply chain methods

delivering products at nominal prices.

• Targets to be the largest retail network carrying multi product segment required for any

and every lifestyle segment of population


MECHIAN PROJECTS’


Connecting local customers to domestic retailers

Deploying logistic and transport networks

Online Retail Store – Business Idea!

Opening up domestic avenues ensuring availability and reachability

of local products across all domestic markets

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Customer

Retailer

Distributor

Delivery Boy ORS


MECHIAN PROJECTS’


Expanding globally connecting local customers to

global retailers

Online Retail Store – Business Idea!

A Global Retail Network connecting Local Retailers delivering

products to customers all over the world!

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MECHIAN PROJECTS’


Indian Retail Segment estimated at $450 Bn.

95% covered by Un-Organized Retail!

Online Retail Store – Market Information

Opening up e-commerce for unorganized retail will result in reverse

evolution with small players growing big!

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Retail Market Size!

Company Revenue (INR) % Market Share

Market Size 1,600,000 Cr. 100.00%

Unorganized 1,520,000 Cr. 95.00%

Organized 80,000 Cr. 5.00%

Pantaloon Retail 4,097 Cr. 5.12%

Shoppers Stop 1,927 Cr. 2.41%

Westside 821 Cr. 1.03%

Big Bazar 6,914 Cr. 8.64%

Reliance Fresh 7,599 cr. 9.50%

Note: Data as on 2010-11,

Source: Deloitte report “Indian Retail Market Opening more doors” year 2013

- Organized retail growing at 35% CAGR

- E-commerce - Fresh market backbone

- FDI in Retail introducing large organized players – a hit

to small players existence

- Un Organized Retail losing market share, jobs and lively

hood of small players.

- With the penetration available, local stores can perform

better through e-commerce by

- Better service levels being closer to the customer

- Better home delivery service through distributed

loads to various outlets

- Easier returns or issue management

- Easy to develop better customer relations

A business targeting improvement of the Unorganized

sector!


MECHIAN PROJECTS’


Transforming Retail Industry, linking local to global

and global to local markets

Online Retail Store – Resulting Evolution

Evolution improving country and global performance pulling down

the poverty line, improving employment and economy!

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• Opportunity for retailers to be a modern retailer offering e-commerce service

• Improvement in domestic and global trading with global sales avenue for local products at

economic prices

• Improved business for transportation and courier services with improvement in domestic

and international trade.

• Improved employment, improvement in product quality, economy and spending power

• Opportunity for local small scale producers to enter global trading avenues

• Provides access to local products globally & global products locally


MECHIAN PROJECTS’


Avenues for added services provide invaluable

opportunity for ORS to succeed along with its partners!

Online Retail Store – The Attractive Future!

Possibility of reducing transaction terminal cost to be explored!

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- Investing into local products with globalization: an extended business

- Extension into Retail, Branding, Domestic Trading, Exports & Imports,

transportation, 3PL services and other varoius business subsets.

- Offers Corporate Business Services such as Improved Forecasting, industry

reports, quality controls, accurate demands, etc.

- Offers cost effective marketing, offers, market trials, etc.


MECHIAN PROJECTS’


4 stage ordering to delivery process with efficient

processing and service levels

Online Retail Store – Business Process

Strong delivery team, essence of a robust E-Commerce Business!

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Ordering

Cu

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mer Access website to

place order

Order confirmed along with payment

Expected Delivery Time informed to customer

Ret

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Forward order to local retailer

Order pick and confirm invoice

Track order status and inform pick up team

Dis

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Pick up Order and confirm in transit

Transfer goods to distribution hub

Distribution process to deliver goods

Del

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Deliver goods to customer

Track delivery by receipt confirmation

Close order

Picking Delivering Closing


MECHIAN PROJECTS’


Providing intelligence to sourcing, commitment to

quality and diligence to delivery service

Online Retail Store – Value Addition

Targeting a profit making lean business unit!

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• Latest products in the market.

• Connect geographies!

• Trustable user feedback

• Providing Quality Index

• Connect to the nearest store

• Link up trustable stores

• Economic Home delivery

To Retailers

• Introduce E-Commerce business

• Connects to the global customers

• Identifies competition, supports growth

• Business Planning Support with web utilities

• Links up with suppliers

To Distributors / DSP’s

• Opens up new business avenues

ORS adding value -

To Product Brands

• E-Ads and Marketing

• Product quality and market feedback

• Real demand and competition

• Accurate Forecasting


MECHIAN PROJECTS’


Intelligent Web Application, Distribution Service

Provider, IT Hardware & Management Resources

Online Retail Store – Infra Requirements

Low hardware investments, high resource running costs – A

challenge for sustaining the business!

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Website

Business

Development TeamIT Hardware

CUSTOMERS RETAILERS DISTRIBUTORS

IT Hardware

IT Team

Analytics Team

INTERNAL

Customer Care / Support Team

Marketing Team

Operations Team

Finance Team

Hardware Investments

- Website

- IT Hardware (HHT’s or scanners for Delivery Team,

Computers & Printers for Retail Stores)

Resources

- Business Team and Operations team


MECHIAN PROJECTS’


Country Operations runs with ~260 executives in the

business team

Online Retail Store – Organization Structure

160 prime areas covered costing ~13 Cr. p.a. for executive resources

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Country Manager

Zonal Manager (4)

Area Managers (4 x 4)

Unit Manager (4 x 4 x10)

Marketing Manager (1)

Marketing Executives(4 x

4)

Business Development Manager (1)

BD Executives(10)

Finance Manager (1)

Fin. Executives(4)

IT Manager (1)

IT Executives(10 x 4 + 10)

Business Team

Operations Team (3PL)

Business Team Structure for

operations in 160 areasOperations


MECHIAN PROJECTS’


Distribution Service Provider reports to Unit Managers

Fixed & Variables, Payment linked to DSP performance

Online Retail Store – Organization Structure

ORS defines cycle time, productivity through operational guidelines

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Country Manager

Zonal Manager

Area Managers

Unit Manager

3PL DSP

Country divided into 4 zones

Each zone divided into 4 areas

Each area divided into 10 units

1 unit takes care of multiple streets

DSP Operations

- Service level commitment from DSP to ORS. Linked variable payment.

- Online tracking of service levels

- DSP follows ORS process defined for last leg distribution

- DSP manages operational resources

- Operational procedures as per ORS guidelines


MECHIAN PROJECTS’


With 5% on Invoice value, 10 years to achieve 2%

organized retail market share - 1,260 Cr. of billing!

Online Retail Store – Revenue & Growth

60% CAGR – Extensive marketing required to achieve the target!

40:60 split on ORS revenue between Business Team : DSP

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Note: All numbers in lakhs

Year 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Particulars Stage 1 Stage 1 Stage 2 Stage 2 Stage 3 Stage 3 Stage 4 Stage 4 Stage 5 Stage 5 Stage 5

Investments 4 - 2 - 10 - 17 - 20 - - 52

Operations 46 92 120 148 371 595 914 1,232 1,881 2,205 2,530 10,135

Investments 1 - 9 - 29 - 66 - 132 - - 236

Operations 11 22 128 234 588 942 1,413 1,884 2,830 3,302 3,775 15,128

Investments 7 - 63 - 210 - 280 - 560 - - 1,120

Operations - - - - - - - - - - - -

Investments 11 - 74 - 248 - 363 - 712 - - 1,408

Operations 57 114 248 382 959 1,537 2,327 3,116 4,711 5,508 6,305 25,263

Invoice Value 1,140 2,280 4,956 7,632 19,188 30,744 46,536 62,328 94,212 110,154 126,096

Growth 100% 117% 54% 151% 60% 51% 34% 51% 17% 14%

Industry Market Share 0.00% 0.00% 0.00% 0.01% 0.01% 0.02% 0.03% 0.04% 0.06% 0.07% 0.08%

Org. Retail Market Share 0% 0% 0% 0% 0% 0% 1% 1% 1% 1% 2%

Business

Numbers

Retailer

DSP

ORS

Total

Party Total


MECHIAN PROJECTS’


5 Stage milestone to achieve country operations

Online Retail Store – Ramping Up!

5 stages in achieving country operations

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Stage 1

Stage 2

Stage 3

Stage 4

Stage 5

# Units: 1

An. Rev: 1.2 Cr.

Inv. Val: 23 Cr.

# Units: 10

An. Rev: 3.9 Cr.

Inv. Val: 77 Cr.

# Units: 80

An. Rev: 32 Cr.

Inv. Val: 624 Cr.

# Units: 40

An. Inv: 15.4 Cr.

Inv. Val: 310 Cr.

# Units: 160

An. Rev: 63 Cr.

Inv. Val: 1261 Cr.


MECHIAN PROJECTS’


Starting with 1 unit with minimum of 100 retailers,

extending up to 160 units over 10 years

Online Retail Store – Ramping Up!

Revenue from one retailer expected at 4,750 INR / Month

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Particulars Stage 1 Stage 2 Stage 3 Stage 4 Stage 5

Units 1 10 40 80 160

Areas - 1 4 8 16

Retailers 500 10,000 40,000 80,000 160,000

Inv. Value pa (Lakh) 2,280 7,632 30,744 62,328 126,096

Retailers (#) 200 700 3,000 6,500 14,000

Inv / Month / Retailer

(INR)95,000 90,857 85,400 79,908 75,057

Rev / Month / Retailer

(INR)4,750 4,543 4,270 3,995 3,753


MECHIAN PROJECTS’


Implementation of Stage 1 in 2 years 5 months

Online Retail Store – Next Steps

2 years 5 months business model to achieve 22.8 Cr. Of invoice

value with 1.14 Cr. Of revenue

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Note: All numbers in lakhs

Setting up Basic Infra

Preparation of Business plan for Customers + Retailers + ORS

Pilot run in 10 retailers (internal customers – expenses)

GO LIVE with 100 retailers

Achieving Stage 1 Milestone

2 months

1 month

1 month

1 month

2 years

2 years 5 months


MECHIAN PROJECTS’


Mechian Projects’

Contact Us

Raghunandan Rao P.

Mechian Projects’

Bangalore

[email protected]

+91 - 9880452523

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