EASYBUY.COMFor all your monthly needs

Change the way hostel students shop!!

Business Model

Need Identification

Competitor Analysis

Market Sizing & Financial Analysis

Value for Investors

Target the under targeted segment: Hostel students and unmarried professionals

Online shopping platform for your monthly purchases

Huge catalogue of personal care products, branded foods, home care products etc.

Fix your monthly shopping list once and forget about monthly purchases

Add or delete at any time Convenient payment & delivery options

The business model Each customer has to choose a unique

login id The web portal offers a range of

personal care products, beverage, branded foods and household items

The orders can be placed or changed throughout the month till the order is frozen 5 day before the delivery window

Standing order can also be made The delivery window of 5 days per city,

one day per zone Products are procured from the

distributors with an average margin of 3%

The remaining 20 days in the month are used for marketing initiatives

A faulty product would be replaced within 30 days

Moving from 4 Ps to 4 Es

Product to Experience Website is user friendly, easy to browse

through products, add products to wish list Unique feature- option to create a standing

order Quality of products never compromised, 30

day replacement guarantee for faulty products

Good packaging Convenient payment options- credit/debit

cards, net banking, cash on delivery Free delivery for orders above Rs.350 Wish-list for products not in catalogue

Place to EveryPlace Metropolitan cities with large proportion of

students (high density group) and working professionals (high propensity to pay)

Delivery across a 5-day window Orders handled through a central warehouse Instead of interrupting people, today we want

to intercept them and make contact when they are most receptive to engaging with us as they go about their day

Moving from 4 Ps to 4 EsPromotion to Evangelism Tie ups with colleges, select campus

ambassadors to promote our brand Make presentations in offices, distribute

pamphlets or flyers in food courts, canteens Promote brand awareness through social

media- Facebook, Twitter Obtain a strong number of followers, and

promote our digital content Internet/web strategy- use Google Ad-words,

blogs, e-mail campaigns Create a brand experience that inspires

customers to engage with us Share their enthusiasm with others, word of

mouth to social networking

Price to Exchange Consumers only pay the competitive price Competitive pricing Consumers not just pay a price, but are willing

to give us precious things like their attention, their engagement and their permission

Need identification Scalability of the modelFunctional Needs Ease of ordering

Ease of payments

Time-saving

Timely delivery of desired products

Emotional Needs More time in hand

Avoid long queues

Aspirational Needs Social: Seen as modern and tech-

savvy

Show-off: Seen as innovator who tries new products

Salient Feature Outcome

Low fixed costs and initial investment

Replication across multiple locations cheap

Only 10 days spent per cluster

20 days spent for promotions Once stabilized, 3 clusters can be

served by 1 fixed asset Only marginal costs need to be

covered to serve additional cluster

Criteria for choosing a cluster:- Population of students/young unmarried professionals- Availability and usage of internet- Major chunk of purchases as monthly purchase- Not many kirana stores in vicinity

Customer Needs : KANO Model

Must-be

Linear satisfierDelighter

Customer satisfaction

Characteristic

High

Low

AbsentFully implemented

Customer NeedsTactile

shoppersInspiration

seekersFirst-timers

Low price/Discounts Delighter Delighter Delighter

Ease of selecting items/Convenience

Must have Must have Must have

Quality Must have Must have Must have

Standing orders Delighter Delighter DelighterVariety of offerings Must have Must have Delighter

Special offer section Linear satisfier Linear satisfier Delighter

Low delivery time Delighter Delighter DelighterNew offering section

Linear satisfier Delighter Delighter

Privacy Must have Must have Linear satisfier

INFERENCES:For our users, the Must have needs are mainly Convenience, Quality and Good overall experience

Competitor Offerings: Need-Gap Analysis

Need A B Easybuy.com

Convenience/Ease of purchase

Special offer section

Access to hard-to-find items

Competitive prices

Wide product offerings

Overall experience

Attractive and uncluttered design

Privacy

NEEDS ADDRESSED BY OTHER E-RETAIL PLAYERS

Currently, e-retail vendors are providing

Low prices with an interface which is not user

friendlyhowever customers actually

look forEase of purchase and good

overall experience with user friendly interface

Top 2 Players : A: Healthkart.com ; B: Bigbasket.com

Market Size Identification Market Size Estimation Office employees (per city) 5,00,000

Students (per city) 15,00,000

Total potential customers (per city)

20,00,000

No. of cities 5

Total potential customers 1,00,00,000

% willing to order online 72%

Per capita monthly order size Rs. 350

% adoption 0.4%

Market size estimation (revenue)

Rs. 12,09,60,000

Targeted surveys at potential clients in all five cities (Bangalore, Mumbai, Hyderabad, Delhi, Pune) students and office employees

Also conducted a focus group study to understand customer needs and preferences

Survey sample size of 700, across all five cities

Estimated the following metrics from the surveys and the focus groups: % of respondents interested in online purchases

Average per capita monthly spend

Average number of students and office employees per city

Adoption assumed to be 0.4%

Key Financial Metrics

Year 1 Year 2 Year 3 Year 4 Year 5Total Expenses 8,73,536 11,85,608 19,21,064 22,59,752 25,98,440Total Income 3,62,880 10,88,640 23,95,008 33,86,880 42,33,600Gross Profit -5,10,656 -96,968 4,73,944 11,27,128 16,35,160Profit Margin -4.22% -0.27% 0.65% 1.16% 1.35%RoCE -85.11% -13.85% 59.24% 140.89% 204.40%Investments

: from Investors 3,00,000 1,00,000 1,00,000 0 0: from Founders 3,00,000 0 0 0 0

Cumulative Investment 6,00,000 7,00,000 8,00,000 8,00,000 8,00,000

Assumptions

Shipping costs: 0.8% of order value in Yr 1; decreases to 0.7% by Yr 5 as economies of scale take effect

%-age of the total market size at Yr 5 as achieved in each of the first 4 years: 10%, 30%, 60% and 80%

Average margin on product: 3% in Yr 1; increases to 3.5% by Yr 5 since bargaining power with suppliers will increase as volumes increase

Major Cost Heads

Warehouse rent

Packing Employee Wages

Shipping & Delivery costs

Website maintenance

Highlights from the financial analysis

Securing long term deals with manufacturers

Ability to work on a negative cash cycle

Low initial investment of only Rs. 5,00,000 + Rs. 3,00,000

Low fixed costs

Low risk

Operating margins of 1% in the fifth year

Positive cash flow in the 3rd year with break-even in the 1st quarter of 4th year

RoCE is very high

NPV of Rs. 13,13,942 in 5 yearsFinancial Analysis

Whats in it for you!

Low initial investment and fixed costs (6 Lakhs INR)

Fast break-even (3 years and 3 months)

Low running costs involved

Scalability high provided target clusters are identified correctly

Can also charge manufacturers for advertising new arrivals

Note: All calculations have been based on extremely conservative estimates and actual returns are expected to be better.

APPENDIX: Financial Calculations

Expenses Year 1 Year 2 Year 3 Year 4 Year 5Warehouse rent 3,00,000 3,00,000 6,00,000 6,00,000 6,00,000Shipping cost % 0.8% 0.8% 0.7% 0.7% 0.7%Shipping costs, inbound 96,768 2,90,304 5,08,032 6,77,376 8,46,720Delivery cost % 0.8% 0.8% 0.7% 0.7% 0.7%Delivery costs, outbound 96,768 2,90,304 5,08,032 6,77,376 8,46,720Employee wages (packing) 2,40,000 2,40,000 2,40,000 2,40,000 2,40,000Website development 75000 0 0 0 0Website maintenance 15,000 15,000 15,000 15,000 15,000Sales and Marketing expenses 50,000 50,000 50,000 50,000 50,000Total expenses 8,73,536 11,85,608 19,21,064 22,59,752 25,98,440IncomePercentage of final market size 10% 30% 60% 80% 100%Market size estimation (revenue) 1,20,96,000 3,62,88,000 7,25,76,000 9,67,68,000 12,09,60,000Average margin on product 3.00% 3.00% 3.30% 3.50% 3.50%Income from product sales 3,62,880 10,88,640 23,95,008 33,86,880 42,33,600Profit -510656 -96968 473944 1127128 1635160Operating margin -4% 0% 1% 1% 1%RoCE -85% -14% 59% 141% 204%Investment from investor 3,00,000 1,00,000 1,00,000 0 0Investment from founders 3,00,000 0 0 0 0Total investment 6,00,000 1,00,000 1,00,000 0 0Cumulative investment 6,00,000 7,00,000 8,00,000 8,00,000 8,00,000

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