This document provides an overview of an opportunity to invest in an online beverages retailer in India. The startup was launched in 2014 and provides premium teas, coffees and other beverages directly to customers. It currently receives an average of 10,000 visitors per month and offers over 95 brands and 1,300 products. Financial projections show rapid revenue growth from $2 million in the current year to over $50 million in 7 years. The document outlines the company's offerings, competitors, challenges, and financial performance to evaluate the investment opportunity.

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Beverages E-tailing
Opportunity for Investment

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 This confidential document has been prepared by LibGem Solutions (LibGem) is based on information shared
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Disclaimer

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Company Overview
 The startup was launched in August 2014, and has
been getting an average of 10,000 visitors every
month
 Online provider of premium beverages,
particularly teas and coffees, right at the
doorstep in India
 At present, have over 95 brands and 1,300 skus,
which includes a wide variety of
 Black Teas
 Green Teas
 Oolong Teas
 Herbal Teas
 Red Teas
 Infused Teas
 Coffees
 Tea Asscessories
 Hot Chocolate & Cocoa Powder
 Also offering convenience and service related to the
products
 Bridging the gap between suppliers and consumers
 Has robust IT infrastructure
 Plan to expand into following categories
 Coffee Machines and Accessories
 Juices & Squashes
 Energy & Health drinks
 Sports beverages
 Milk & Sugar Sachets
 Soups
 Children beverages
 Currently other than directors, there are 2
employees
 One of the directors has extensive experience
in marketing, both online and offline
 The other is an IT expert

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Unique Selling Proposition
One Stop Destination for all beverages and its associations
• Contains about 95 brands and 1300 skus
• Creates awareness about different varieties of teas along with its benefits
• Provides a wide variety of category associated with the main product like milk and sugar sachets, tea equipments, coffee
accessories
• Consumer can get knowledge of different flavours, better brands
• One shop for all beverages convenience will attract more customers
Education
• Believes in educating customer to enable one to make an informed decision
• Have a page which answers a lot of common questions about products and Blog which has vast amount of rich information for
users
• Will be building a tea forum & question and answer page to increase engagement and let users get more input before purchase
Subscription service
• Try to take the pain away in ordering every month since beverages are a recurring purchase without the need to alter the order on
a regular basis
Popular Products
• Some very popular products are available which are otherwise difficult to locate
Sampling
• Enable customers to try before they buy. This helps in building loyalty and trust
International shipments
• Are trying to open up internationally as are getting frequent enquiries from abroad

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Broad Product Category
Tea
Black Tea
Green Tea
Herbal/ Slimming
Tea
Iced Tea
Flavoured/
Infused Tea
Coffee
Filter Coffee
Green Coffee
Espresso Coffee
Decaffeinated
Coffee
Blended Coffee
Drinks
Juices
Squashes
Sports Beverages
Energy & Health
Drinks
Children
Beverages
Others
Soups
Milk & Sugar
Sachets
Tea Accessories
Hot Chocolate &
Cocoa Powder
Coffee Machines
& Accessories

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Web Analytics
Period Sessions Users Page Views
Bounce Rate
%
New Visitors
Returning
Visitors
Aug-14 2,246 1,591 10,488 47.42 65.90 34.10
Sep-14 2,503 1,834 11,192 48.94 69.60 30.40
Oct-14 6,325 4,940 24,966 46.83 76.00 24.00
Nov-14 6,419 5,126 23,261 49.51 76.90 23.10
Dec-14 6,813 4,842 25,287 51.28 67.90 32.10
Jan-15 5,422 3,723 24,650 45.39 64.90 35.10
Feb-15 6,170 4,436 20,698 56.86 69.10 30.90
Mar-15 7,441 5,281 40,743 26.41 69.10 30.90
Apr-15 7,098 4,779 56,394 2.54 63.90 36.10
May-15 10,504 7,271 82,988 6.69 66.20 33.80

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Additional Revenue
Digital
advertisements by
brands on website
and sampling
through them can
be a revenue
source
Tea tasting events
in various cities
can be a revenue
source
Private label can
potentially be a
big source of
revenue and
better margins
Other models
include beverage
gifting for
occasions and tea
catering for events

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From Warehouse to Customer
Order
Received
Warehouse
Material is taken out from
inventory warehouse. The
warehouse is maintained totally
covered and having no moisture
whatsoever. Stock is packed in
cartons which are kept over layers
of matting and newspapers.
After the material is taken out, the expiry
and packaging of the products are
checked. As far as expiry is concerned,
only send those products which have
atleast 25% expiry left (this is an absolute
minimum). Also packaging is checked and
all packets which are not shrink wrapped
are put into zip lock packets.
First the products are fit into the
right carton. The size of the carton is
crucial as the products should not be
very loosely fit into the carton nor
should be they be very tightly fit. All
excess spaces are filled up using
bubble wrap and paper. Taping is
done all over the carton to ensure
the carton is sealed well.
Inventory Check Packing Courier
The pin code of the customer is
checked and the right courier is
selected. Then the final carton
is dispatched.

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Competitor Analysis
• Better off because of the wider variety and convenience it offers over the
offline stores like Big Bazaar etc
• Have over 90 brands of teas and coffees compared to these stores which
typically will have around 10 brands at the maximum
• Also a customer can order sitting in his/her office and deliver the goods directly
to their address
Offline Stores
• Online private labels like Udyan Tea, Golden Tips Tea, Tea Trunk etc. can be a
competition
• Advantage is primarily the choice offered to customers
• Most of these brands are available with them as well
Private Labels
• Can do better only because of its focus and better understanding of the domain
• Look at providing customers a more comprehensive background and education
about products so that they can take a better decision
• Amazon currently has 504 teas and 70 coffees. Also the collection is very
diverse which includes readymade shakes and cold coffees. Flipkart does not
have a Beverages section at all. Snapdeal does not have a prominent Beverages
section
Online Market

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Key Challenges
Inventory Management
• Having inventory gives better customer experience but brings with it a big task of managing the
same
• Since beverages are perishable, there is a need to maintain a good system for managing inventory
• Would need to estimate and maintain inventory as per the flow of the product in the market
• Different products would need to be classified based on their demand and this time period would
differ for the different categories
Delivery Logistics
• The experience of a customer is complete at the time the product reaches him/her and when he/
she opens the same
• Courier plays a key role in determining customer experience
• Would need to tie up with more courier services and allot the right courier to the right service
(based on cost and serviceability) so that the delivery time is cut short
Online Conversion Rate
• Working aggressively so to increase the number of visitors
• To help the visitors get the right information to help them decide and that the overall experience is
as easy as it can get
• Current conversion stands at around 7%

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Projection
1.9
4.2
5.3
6.5
7.8
9.2
10.6
0.1 0.3 0.6 0.9 1.2 1.4 1.6
0.2 0.7
2.5
4.9
5.8
6.9
7.9
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
Visitors Orders Units
Particulars Current Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
Conversion Rate 7% 6% 8% 12% 15% 15% 15% 15%
Average Cart Size 622 422 578 1516 2085 2660 2940 3250
(figures in Millions)

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Financial Performance
(figures in ~INR Millions)
2 46 191
941
1,973
3,021
3,940
5,009
FY 2015 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
Sales
(1)
(55)
(88) (102)
7
109
198
388
FY 2015 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
EBIDTA

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E-tailing in India
455
1152
34
212
0.6
76
2012 2021
Traditional Retail: Brick & Mortar
Corporatized Retail: Brick & Mortar
Corporatized Retail: E-tailing
Indian Retail Market Size
Total Retail Market Size: USD~490 bn
Total Retail Market Size: USD~1440 bn
Source: Technopak Analysis
Top e-commerce investments in India in
2014
• Furniture etailer Urbanladder closed $21
million (approx Rs.120 crore) Series B funding
from Steadview Capital along with the existing
investors, SAIF Partners and Kalaari Capital
• Furniture and home products marketplace
Pepperfry raised $15 million funding led by
Bertelsmann India Investments (BII), including
Norwest Venture Partners (NVP)
• Grocery and veggie etailer Bigbasket snapped up
$33 million from Helion Ventures, Ascent Capital,
Zodius Capital and Lionrock Capital
• Online Indian ethnic wear store Cbazaar received
funding of Rs. 30 crore to Rs 50 crore from private
equity firm Forum Synergies among others
• Etailer of funny and quirky products
Happilyunmarried secured $0.65 million (Rs.4
crore) from InfoEdge. The investment was done
through optionally convertible cumulative
redeemable preference shares

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Sakshi Wadhwa (+91 99 9909 0114)