1. 221 B Baker Street
Vamsi
• Debanjan Munsi
• Hemant Sankhla
• Chatrathi Vamsikrishna
Debanjan Hemant
2. Bollywood Rising
2001 2009
The Industry Beckons Inflection Point
Key Change Increased Digitization and HD growth wave
2012
Openness
New Ideas
Chennai
Corporate Entry • Tamil, Rs
Game Changer Industry CAGR 350 Crore
Hyderabad Mumbai
13.8%, Size $14.4Bn • Telugu, Rs • Bhojpuri,
450 Crore Rs 250
Crore
Regional
Average Budget players
Marketing Spends
US $ 12 mn catching
on an average – 5% of budget up
Source - FICCI & KPMG report on Media & Entertainment industry
221 B BAKER STREET Industry Product B2C B2B Inventory Financials 2
3. The Merchandize Industry
Retail Market in India Online Market
Apparel Market (USD Bn) Online Apparel e-
60 50 market- $500 retailing
35 million of space - Over
40
25 total Retail $130 million
20 market
0
2006 2011 2016
Indian e-
Jewelry & Watch Market Over 75% of commerce
(USD Bn) the total e- market- Still
60
44
transactions - in its early
40 travel related stages of
26
17 development
20
0 Online Sales Percentage
2006 2011 2016
60% 50%
50% 40%
Foot Wear (USD Bn) 40%
10 8 30%
4 5 20%
5 9%
10%
0 0%
2006 2011 2016 Computers Books Clothes
221 B BAKER STREET Industry Product B2C B2B Inventory Financials 3
4. Why Online Merchandizing
Current internet 3 in 5 internet
user base of 150 users visit retail
million sites
India - Top 3 Significant
fastest growing female internet
online markets user base of
41% annually High 40%
Prospects of
surge in
Demand
Online Apparel Market & Future Scope
9% of Online Apparel fastest
Apparel - Biggest Online Apparel
Apparel in US growing online
Online Selling Sales Expected over
Constitutes USD 31 category - 362% YOY
Category 30% by 2018
Bn in Revenue 2012
221 B BAKER STREET Industry Product B2C B2B Inventory Financials 4
5. Primary Research (Online Respondents – 141)
How often do you watch How Often do you Would you Buy the Did you hear of Any Brand
Bollywood Movies? purchase Online Apparel? Merchandize of your favorite selling Filmy Merchandise?
Star Online?
100%
No 80%
60%
40%
Yes
Never 20%
< Once a month < once a Month 0%
0% 20% 40% 60% 80% Yes No
Once a month Once a Month
2-3 times a month 2-3 Times a Month
>3 times a month > Thrice a Month
Which Categories Would You Prefer to Purchase? Would you pay a premium How much Premium over
for Star Merchandize? cost are you willing to pay?
Others
Jackets
Shoes Depnds on Premium >30%
Jewelry
20 - 30%
Dress/Saree No
Watches 10 - 20%
Jeans Yes
<10%
T-Shirts
0% 20% 40% 60% 0% 20% 40% 60%
0% 20% 40% 60% 80%
221 B BAKER STREET Industry Product B2C B2B Inventory Financials 5
6. THE ‘PRODUCT’ : ‘Being stylish’
Double
Click to
see the
Concept
video
Click Here to Visit on You Tube
221 B BAKER STREET Industry Product B2C B2B Inventory Financials 6
7. THE ‘PRODUCT’ : ‘BEING STYLISH’
Online Portal for Sale of Merchandise used in Movies
Garments
Branded
Men &
Collections
Women
Designer
Accessories
wear
Foot Wear Jewellery
Kids
Collection
221 B BAKER STREET Industry Product B2C B2B Inventory Financials 7
8. Difference from current online offerings
E-Merchandize market ‘being stylish’ model
Demand Pricing Demand Pricing
•Pricing depends on
• Influencing Factors: • Dependent on pricing • Influencing Factors:
popularity of star;
Festive Seasons, Special of various brands; Popularity of Star in the
expected demand from
occasions, Travel plans; expected seasonal Movie, Style quotient of
fan base, designer
Climatic changes; Re- demand etc. the Star, Fan Base, Box
involved with the
locations etc. (Fixed) • New entrants like Flip office Success etc.
costume, margins to
• Players drive demand Kart focused on • Every new movie of the
producers etc.
through discounts; sales penetration through star drives the demand
• Customization drives
promotions etc competitive prices from consumers
the price
Competition Target Segment Competition Target Segment
• Direct competition • Fan Base of Movie Stars
• Established Players like • Urban Women
from players like Myntra; • Production Houses of
Myntra; Snap deal; e-
Levis endorsing movies Movies
bay, Jabong; Zovi etc. • College Students
as official style partners • Style focused customers
• New entrants like
• Costume Designers
Flipkart - men’s apparel • Necessity, Convenience
• Indirect competition • Aspiration driven
segment , Fashionara etc. and Low price driven
from other e-retailing internet users rather
• Few exclusive players Online retail users
players than necessity driven
221 B BAKER STREET Industry Product B2C B2B Inventory Financials 8
9. B2C Business strategy
Partnering with Film Production Houses & Movie Stars
• Partnership: To seek information about designer/branded merchandize worn at specific instances in
movies & public appearances
• Information Usage: To procure merchandise from the designers/brands
• Merchandise will be put up for sale on the online page of ‘Be Stylish’
• Benefit to Film producers and Actors: A share of 20-25% in total profits, Increase in Publicity of the
movie
• Contractual Agreements: For exclusivity of partnership for 3-5 years to prevent competition entry
Product Categories
• Trait: Merchandise worn • Trait: Merchandise worn • Trait: Merchandise worn • Trait: Non Merchandise
by the lead actor/actress in by lead actor/actress by the supporting items used by lead actor in
the Movie outside the movie characters and kids in the the movie
movie • Item should be of a key
• Instances: Pre release • Visibility: Premiers, Audio usage in the movie
trailers, posters, select release, Press meets, award • Instances: Songs, Key
songs, key scenes and functions, promotional situations in the movie • Examples: Scooter in Koi
fights appearances etc. Mil Gaya, Swords in Veer
etc.
Platinum Gold Silver Miscellaneous
221 B BAKER STREET Industry Product B2C B2B Inventory Financials 9
10. Pricing Strategy
High Priority Categories
• Auction Sale • Auction Sale
• High Min-Bid • Fixed Price
Price Premium Sale
• High demand • TRP’s, User
• Movie Buzz Response
• Fan base
PLATINUM GOLD
SILVER MISC
• Fixed price • Auction Sale
• Moderate - Low • Single Item
Pricing • High demand
• Less Demand
Moderate Priority Categories
221 B BAKER STREET Industry Product B2C B2B Inventory Financials 10
11. Selling Strategy & Differentiation
• English Auctions – Platinum, Gold and Silver Categories
Auctions • Yankee Auctions – Bulk Purchase across categories
• Second Price Sealed bid Auctions – Miscellaneous category
• Moderate-Low Price – Silver Category Merchandise due to relatively less demand
Fixed Price Sale
• Premium Pricing – Merchandise of Gold Category, purchasable in large quantities
• Legal – Legal restrictions through exclusive tie-ups
Entry Barriers • Relationship – Network effects through planned reverse logistics and tie-ups
• Mutual Benefit – Promotional tie-ups ensuring first mover advantage
Key Differentiators
Transparency in User Data Strong Pricing Strategy
• Authentic User Base: Only Registered & Verified users • Initial Pricing Parameters: Short Term Parameters
participate in Auctions • Movie Specific: The popularity of the actor, the star
• Efficient Bid Tracking: Past bid history of every user in cast, director and production house of the film in the
the auction is made available for public view to all users order of preference.
in the auction - Easier to spot fake bidding profiles • Designer/Brand Specific: The popularity of the designer
• Transparency in Sealed Bid Auctions: User specific bids or brand in the market
are made available for all users post Sealed bid auctions • Long Term Pricing Parameters: The past bid history of
• User Priority: Preference always given to the first the star, the average variation of winning bid to the
maximum price bidder in case of a tie minimum bid price, the TRPs of the star during TV
appearances, variation in the number of bidders of the
star merchandize etc.
221 B BAKER STREET Industry Product B2C B2B Inventory Financials 11
12. Marketing Strategy
Market Size & Adoption Curves
• Sec B1, B2 • Sec A1
• Young Men/Women aged 18 - • Young men/Women aged
40 between 14-30
• Occasional internet • Trying to emulate favorite
users, excited about new actresses/ follow movies
gadgets/ social media /apps news/latest fads about their
• Influenced by merchandise favorite stars
used by stars • Believes in zodiac &
• Willing to pay small premium horoscopes
Aspirer Starry Eyed
Aspirer – Rs 183 Crore Starry Eyed – Rs 201 Crore
• Sec A2, B1 • Kids Sec A1, A2, B1
• Young earning professionals • Middle aged & seniors Sec
22-30 A1, A2
• Heavy mobile user especially • Good paying capacity
smart phones • Appreciation for high fashion
• Love movies / Wants special • Give importance to comfort
memorabilia and ease of delivery
• Aspire to look awesome like
the Stars
Savvy Master Kids & Seniors Savvy Master – Rs 140 Crore Kids & Seniors – Rs 87.5 Crore
221 B BAKER STREET Industry Product B2C B2B Inventory Financials 12
13. Customer Loyalty
Secure Transactions:
Purchasing PCI, DSS
Compliance
Certificate
Discounts & Gifts on Unique ID for the entire
Special occasions like family: Benefits for referral
Birthdays & Anniversaries purchases
Reducing
complexity:
Customizable Dash
Boards
Customer
Relationship
Trusted Payment
Improving interactions Contests systems:
PayPal, SSL-
• Facilitating Idea-sharing on site • ‘Star Purchaser of the Month’
• Product Comparison Sheet • ’Wall of Fame: High frequency
VeriSign, PCIDSS,
• Offering Free shipping on bulk auction winners’ Visa, Bill Me Later &
purchase • User Testimonials alternative Systems
Recommender Systems • Order tracking facility • Customer Support
221 B BAKER STREET Industry Product B2C B2B Inventory Financials 13
14. Promotion Strategy
• Ideal for Silver • Focus on ‘College
Category Sales Trends’ & Offers
• Updates on • Updates on
Promotional offers and horoscopes and ‘Lucky
Low price sales Merchandize’ of Stars
• More emphasis on • Ads on movie review
Blogs/E-mail/Web & booking sites like
connect imdb
Aspirer Starry Eyed
• ‘Subscribe to your • Mobile Games
Favourite Star’ option • Dress your Star
• Mobile updates on Contests on website
Star merchandize and • Newspaper Ads – local
Newsgroups Movie Gossips dailies
• Flash Mob for • Pamphlets with
Corporate newspapers &
• Corporate Offers magazines
Savvy Master Kids & Seniors
221 B BAKER STREET Industry Product B2C B2B Inventory Financials 14
15. Story 1 Story 2
I love that jacket
&Goggles of Hrithik
…I wish I could by
the same
Being Stylish .
Priyanka Chopra
Hritik
Kabhi khushi kabhi gum
BUY
Gosh that Saree of Ray Ban
Priyanka Chopra is
beautiful
Thank you
being Stylish
I wish I could have a
similar type of Saree Being Stylish
Priyanka Chopra
Special Application
Saree
Enter your photo in a
White
dress or accessory
You and view yourself in
are a our merchandise
Kat
Common Indian Girl woman!
221 B BAKER STREET Industry Product B2C B2B Inventory Financials 15
16. B2B Strategy
Inventory Logistic & Support A to Z of Costumes Providing Insurance
Management Service Provider Apparel & Package
Service • Online Transaction Accessories • Partnering with
• Sourcing un-used facilities: Payment • Information Store- Insurance companies
Merchandise Gateway Service House of Designers to create specialized
Inventory from one • Ordering, Shipping • List of merchandise products for insuring
production house to and Delivery suppliers movie Merchandise
another management • Information on • Creating Liaisons
• Changing from Capex • Lead time reduction availability of between the
to Opex- Reducing • Increasing Merchandise at production houses
Risks operational efficiency different production and Insurance
• Pay per use Model houses providers
221 B BAKER STREET Industry Product B2C B2B Inventory Financials 16
17. B2B Target Segments
• Industry: Regional as well • Segment: All Designers
as National Dealing with apparel and
• Purposes Served: Accessories
Merchandise • Opportunity: Chance to
Sourcing, Logistics, Insuran expand their Reach
ce and information service
• Better Supplier Logistics
• Marketing Strategy:
• Marketing through
Exclusive Tie-Ups &
Website Listings
Revenue Sharing Model
Production Costume
Houses Designers
• Industry: Regional and
National
Key Benefits to Designer • USP: Single point access Benefits to ‘Being Stylish’
to designers across the
country
• Facility to update & maintain • Network Building by Sourcing
• Method: Profile short-
profile portfolio Designers
listing from professional
• Information about prior networking websites & • Revenue Generation through
experience in designing & Access to exclusive Sourcing Merchandise Inventory
working with films designer portfolios • Developing Relation ship with
• Platform to appeal to the Production houses and Designers:
directors in search of Designers Assistant Key to B2B Model
Directors
221 B BAKER STREET Industry Product B2C B2B Inventory Financials 17
18. Appealing to the Decision Makers
Decision making process Key Stakeholders & Benefits
Brief to Assistant
Script • Publicity for the Film
Director
Producer • Un-used Inventory creating
Revenue
• Profit Share
Finalizing the Discussion with the
Costume Designer Director • Increased Demand
• Increase in Recognition
Key Stakeholders Designer • More Referrals
• Additional Revenue
Costume designer
Designer Consults
Prepares
the Producer with
Merchandise
the Budget
Budget • Meeting the desire to look as
stylish as stars
• Production house: Better
Customer control of Inventory, Reduced
Purchase & Use of Negotiates & Cost - Pay per Use Model
Merchandise Finalizes the Budget
221 B BAKER STREET Industry Product B2C B2B Inventory Financials 18
19. Inventory Management
Based on the In-depth interview of Asst. Director
GetAway Productions Implications on inventory management
Need for planned reverse Creating a market for
logistics used Clothes inventory
lying idle with Producers
Salient Bollywood Industry facts
• Final design themes chosen by Director
• Prominent Stars use their own designers
• Designs are always renewed even for new scenes of Developing separate Differential payment
same film agreements with mechanism
• Large inventory of used clothes that are hardly ever Directors and Stars
used again
• Designers and tie-ups on clothes and jewelry
completely relationship based
• Star’s designers are paid for by the Film producers
• Variable lead times and need for instant decisions Developing separate Postponement and made
on designs selling platforms to order model
221 B BAKER STREET Industry Product B2C B2B Inventory Financials 19
20. Sales & Inventory Management
Forecasts from trends Forecast adjustments First Stage Sales Second Stage Sales
Star popularity index
from sites
Regional trends from TV
viewer-ships Movie Songs release Release of Collection with
Top 20 trends forecast TV viewership trends Movie Release Goodies and
Bonanzas Galore!
Right into your
mobile phone
First Level Order Fulfillment of Initial Processing and Design
Ordering Basic Material
Processing Orders from Site changes
Product Lead
Sales through Mobile
Time – 6 Apps
months
Use of Sales to other
postponement
strategy similar to Release of Merchandisers
Benetton collection
with movie
release
All this with
actual lead time
Accessory Unsold items
production sent to mobile of 1 week
lead time – 1- store and
2 weeks merchandisers
221 B BAKER STREET Industry Product B2C B2B Inventory Financials 20
21. Vision & FUTURE scope
Mission • Providing Value to Customers by enhancing their style
quotient from the movie stars they admire
Vision • Establishing as a One Stop Trust Worthy Solution to all
the Merchandise Requirements of Movies
Expansion Plans
221 B BAKER STREET Industry Product B2C B2B Inventory Financials 21
22. Financials
Calculating Initial Impact Year 1 Year 2 Year 3 Year 4 Year 5
Growth rate of the registered users 200% 150% 100% 50%
Retention of the users 70% 72% 74% 70%
High Risk Industry
Total no of users 10000 21000 37800 55944 58741
Online visits per subscribers 20 22 24 27 29
Total no of visits on website 200000 462000 914760 1489229 1720060
Sales conversion rate % 5.00% 5.10% 5.20% 5.31% 5.41%
Number of Buyers 10000 23562 47586 79019 93092
User growth rates
Normal overall growth rate
Key Assumptions used in calculations
10% 30%
taken from Nasscom
Profit share for
Promotional growth rate 20% producers from survey on e-commerce
Commission rates used 2% 1st stage sales
Gross Margin on first stage sales 30% Profit share for 10%
Gross Margin on second stage sale 5% producers from
Percentage of merchandise sold in first stage 30% 2nd stage sales
Percentage of merchandise sold in second stage 70% Two stage selling
Tax rate on Income 30%
process with planned
reverse logistics
Calculation done on yearly basis Product Uniqueness Profit Share agreements
•Avoiding Complications •Retention high •Higher share for first stage to
•Simplifying assumptions •User visits with high buy get tie-in agreements
•Giving a complete picture intention – similar to •Second stage is primarily stock For Details Click
myntra.com, snapdeal.com, etc. mgmt.
here
221 B BAKER STREET Industry Product B2C B2B Inventory Financials 22
23. Financials
25000000
Year Year 1 Year 2 Year 3 Year 4 Year 5
Break-even
Income from all sources Rs. 1,67,86,000 Rs. 4,37,96,185 Rs. 9,70,13,927 Rs. 17,70,31,719 Rs. 22,96,22,252 20000000 point
Profits in rupees
Cost of Operations Rs. 1,91,10,000 Rs. 2,04,84,000 Rs. 2,39,87,280 Rs. 2,78,31,077 Rs. 3,22,57,950 15000000
Profit repatriated to Producers Rs. 46,75,000 Rs. 1,21,16,759 Rs. 2,69,18,106 Rs. 4,91,69,043 Rs. 6,37,18,655
10000000
EBIT -Rs. 69,99,000 Rs. 1,11,95,427 Rs. 4,61,08,541 Rs. 10,00,31,599 Rs. 13,36,45,647
5000000
Corporate Income Tax -Rs. 20,99,700 Rs. 33,58,628 Rs. 1,38,32,562 Rs. 3,00,09,480 Rs. 4,00,93,694
0
Net Income after tax -Rs. 48,99,300 Rs. 78,36,799 Rs. 3,22,75,979 Rs. 7,00,22,119 Rs. 9,35,51,953
1 2 3 4 5
-5000000 Years
Net Present Value Year 1 Year 2 Year 3 Year 4 Year 5
15 Optimistic
Operating profit/loss -Rs. 48,99,300 Rs. 78,36,799 Rs. 3,22,75,979 Rs. 7,00,22,119 Rs. 9,35,51,953 Scenario
10
Normal Scenario
NPV Rs. 13,21,86,656 Total Value created
Profits in Crores (Rs)
NPV to producers Rs. 10,76,35,211 Rs. 23,98,21,867 Pessimistic
5 Scenario
Optimistic Pessimistic 0
Normal Scenario
Scenario Scenario 1 2 3 4 5
-5
• Normal growth • Normal growth • Normal growth
-10
rate 12% rate 10% rate 5%
• Promotional • Promotional • Promotional -15
Growth rate 25% growth rate 20% growth rate 10% Year of operation
221 B BAKER STREET Industry Product B2C B2B Inventory Financials 23
25. Appendix-1
Demand projections Year 1 Year 2 Year 3 Year 4 Year 5
Buyer numbers 10000 23562 47586 79019 93092
Articles per buyer 5 6 7 9 10
Total demand 50000 141372 342618 682725 965182
Sold in first stage 15000 42412 102785 204818 289555
Sold in second stage 35000 98960 239833 477908 675627
Revenue projections Year 1 Year 2 Year 3 Year 4 Year 5
Revenue contribution from each user 5000 5500 6050 6655 7321
Sales Revenue 50000000 129591000 287894182 525872119 681482938
Ad Slot charges 0 5000 5500 6050 6655
No of slots 0 60 72 86 104
Ad Revenue 0 300000 396000 522720 689990
B2B transaction size for big players 50000 60000 72000 86400 103680
Growth rates of transactions 100% 80% 70% 60%
No of B2B transaction 20 40 72 122 196
B2B revenue from large players 1000000 2400000 5184000 10575360 20304691
B2B transaction size for regional players 20,000 22000 24200 26620 29282
No of B2B transaction 40 80 144 245 392
B2B revenue from small players 800000 1760000 3484800 6516576 11469173.76
Total B2B revenue 1800000 4160000 8668800 17091936 31773865
Revenue from second stage 35000000 90713700 201525927 368110483 477038056
221 B BAKER STREET Industry Product B2C B2B Inventory Financials 25
26. Appendix-2
Risk Mitigation Income Year 1 Year 2 Year 3 Year 4 Year 5
Strategies Total income from all sources Rs. 1,67,86,000 Rs. 4,37,96,185 Rs. 9,70,13,927 Rs. 17,70,31,719 Rs. 22,96,22,252
• Reverse Logistics Org Details
IT personnel required
Year 1
5
Year 2
4
Year 3
4
Year 4
4
Year 5
4
Planning Website developers 4 3 2 2 2
Data Management 3 3 4 4 4
• Creating Secondary User management 3 2 3 3 3
Customer support 4 5 6 8 10
market for Star’s Management 3 3 4 5 6
rejected clothes Sales personnel 2 2 3 3 3
• Star designer tie-ups Salary details Year 1 Year 2 Year 3 Year 4 Year 5
• Creating multiple Salary growth
Salary of IT personnel 300000
12%
336000
12%
376320
12%
421478
12%
472056
revenue sources Salary of web developer 300000 336000 376320 421478 472056
Salary of data managers 250000 280000 313600 351232 393380
• Ads on choose your Salary of user management person 200000 224000 250880 280986 314704
star quotient – web Salary of Customer support 200000 224000 250880 280986 314704
Salary of Managers 500000 560000 627200 702464 786760
segment Salary of Sales Personnel 200000 224000 250880 280986 314704
• Fees from smaller Total Salary costs 6750000 6888000 9031680 11379917 14161674
SEO Costs 360000 396000 435600 479160 527076
designers willing to Advertisement & Promotionals 12000000 13200000 14520000 15972000 17569200
display their Total Recurring Costs Rs. 1,91,10,000 Rs. 2,04,84,000 Rs. 2,39,87,280 Rs. 2,78,31,077 Rs. 3,22,57,950
collection
Back to Slide
221 B BAKER STREET Industry Product B2C B2B Inventory Financials 26
30. Appendix-4
References
• http://www.boxofficeindia.co.in/the-future-of-entertainment-2/
• KPMG Industry Report on Media and Entertainment Industry 2010
• NASSCOM E-commerce Survey 2011
• Data Monitor International 2011 Report on Media and
Entertainment Industry
• http://www.fits.me/news/online-apparel-retail-and-what-future-
brings
• http://articles.economictimes.indiatimes.com/2012-10-
28/news/34780476_1_online-travel-user-base-internet-users
• http://www.scribd.com/doc/85003528/Emerging-Trends-in-Indian-
Retail-and-Consumer-2011
• http://techcircle.vccircle.com/500/apparel-e-com-fastest-growing-
category-one-in-10-indians-logged-online-in-july-comscore
221 B BAKER STREET 30
Miscellaneous Category: The valuation of every bidder might be very different and hence a sealed bid auction is preferred for this category. Second priced sealed bid auction prevents the user from undergoing significant loss due to high initial valuation. (Assuming rational behavior of bidders)