IIM C - Baker Street
Upcoming SlideShare
Loading in...5
×
 

IIM C - Baker Street

on

  • 9,274 views

 

Statistics

Views

Total Views
9,274
Views on SlideShare
2,084
Embed Views
7,190

Actions

Likes
5
Downloads
88
Comments
1

6 Embeds 7,190

http://casestudy.directi.com 7172
http://beta.casestudy.directi.com 12
http://translate.googleusercontent.com 3
http://webcache.googleusercontent.com 1
http://casestudy.directi.com. 1
https://www.google.co.in 1

Accessibility

Categories

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment
  • Sources: http://www.scribd.com/doc/85003528/Emerging-Trends-in-Indian-Retail-and-Consumer-2011http://techcircle.vccircle.com/500/apparel-e-com-fastest-growing-category-one-in-10-indians-logged-online-in-july-comscore/
  • http://www.fits.me/news/online-apparel-retail-and-what-future-bringshttp://articles.economictimes.indiatimes.com/2012-10-28/news/34780476_1_online-travel-user-base-internet-users
  • 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)

IIM C - Baker Street IIM C - Baker Street Presentation Transcript

  • 221 B Baker Street Vamsi • Debanjan Munsi • Hemant Sankhla • Chatrathi VamsikrishnaDebanjan Hemant
  • 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 upSource - FICCI & KPMG report on Media & Entertainment industry221 B BAKER STREET Industry Product B2C B2B Inventory Financials 2
  • 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 Clothes221 B BAKER STREET Industry Product B2C B2B Inventory Financials 3
  • 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 2012221 B BAKER STREET Industry Product B2C B2B Inventory Financials 4
  • 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
  • THE ‘PRODUCT’ : ‘Being stylish’ Double Click to see the Concept video Click Here to Visit on You Tube221 B BAKER STREET Industry Product B2C B2B Inventory Financials 6
  • 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 Collection221 B BAKER STREET Industry Product B2C B2B Inventory Financials 7
  • 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 driven221 B BAKER STREET Industry Product B2C B2B Inventory Financials 8
  • 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 Miscellaneous221 B BAKER STREET Industry Product B2C B2B Inventory Financials 9
  • 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 Categories221 B BAKER STREET Industry Product B2C B2B Inventory Financials 10
  • 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
  • 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 Crore221 B BAKER STREET Industry Product B2C B2B Inventory Financials 12
  • 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 Support221 B BAKER STREET Industry Product B2C B2B Inventory Financials 13
  • 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 & Seniors221 B BAKER STREET Industry Product B2C B2B Inventory Financials 14
  • 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
  • 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 providers221 B BAKER STREET Industry Product B2C B2B Inventory Financials 16
  • 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 Directors221 B BAKER STREET Industry Product B2C B2B Inventory Financials 17
  • 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 Budget221 B BAKER STREET Industry Product B2C B2B Inventory Financials 18
  • 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 model221 B BAKER STREET Industry Product B2C B2B Inventory Financials 19
  • 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 merchandisers221 B BAKER STREET Industry Product B2C B2B Inventory Financials 20
  • 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 Plans221 B BAKER STREET Industry Product B2C B2B Inventory Financials 21
  • 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. here221 B BAKER STREET Industry Product B2C B2B Inventory Financials 22
  • 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 operation221 B BAKER STREET Industry Product B2C B2B Inventory Financials 23
  • 221 B BAKER STREET 24
  • 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 477038056221 B BAKER STREET Industry Product B2C B2B Inventory Financials 25
  • 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 Slide221 B BAKER STREET Industry Product B2C B2B Inventory Financials 26
  • Appendix-3: Questionnaire221 B BAKER STREET 27
  • Appendix-3221 B BAKER STREET 28
  • Appendix-3221 B BAKER STREET 29
  • 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-comscore221 B BAKER STREET 30