internet based retail mock startup

Executive Summary

Mission

KidzKart’s mission is to provide the finest products/brands with great online shopping experience and Prompt customer service.

Our services will exceed the expectations of our customers.

Vision

To 'Change' the way, Indian parents buy, so that they can be at home to spend more quality time with their 'Little ones' and family.

Category - Baby Products

Around 27 million babies are born every year in India. Considering that even 10 percent of babies are born to parents who would spend annually a conservative figure of INR. 5000 on baby products (diapers, lotions, strollers, toys, gears etc), the potential is huge. Most of the parents look for best in class and trusted brands of baby products which aren’t readily available in physical stores in India, especially in tier 2 & 3 cities

The market size for baby products in India is estimated around INR 15-25 billion. Out of this, the estimated online market for baby product hovers around INR 100-120 crore range and it tends to double in every 6 to 8 months

What is the biz about?

KidzKart is about to provide the premium baby product brands available to consumers

Seeking high quality, affordable prices, timely delivery with a comfortable online shopping

Experience and prompt customer assistance


Parents look for premium and trusted brands of baby products not readily available in physical stores in India, particularly tier 2 & 3 cities

The business is about making available the premium foreign brands of baby gear which aren’t available in India. Parents seek help of their friends & families living abroad for such brands

As this biz will target the mother’s, our website will focus on quality, safety and hygiene of the baby products


Estimated market size in India: 20-25 billion

Estimated online market 100-120 Crores

Growth: The online estimated market tends to grow 2X in 6-8 months

CategoryBaby Gear Pram Car Seat Swings Strollers

Kids Apparel New Born Girl Wear Boy Wear

Toys First Toys Baby Gyms Bath Toys

Baby Furniture High Chair Playards Cots

Accessories Travel Kits

Feeding & nursing

Footwear

Baby Diapers

Baby and Skin Care

Mom and Maternity

Birthday and Gifts

Customer Proposition

“When my second child started sitting comfortably at the age of 5 months, my husband and I decided to buy a baby stroller. Now, we live in a typical tier 2 city that has fewer options when it comes to shopping as compared to bigger cities. We had faced lots of difficulty in the same purchase 5 years ago with our first child, so we decided to buy online

this time”

Customer PropositionResearching the Product

“When we goggled “strollers,” the first thing that we noted about the results was interesting; none of the generic shopping sites like Ebay, Junglee, Amazon, etc. were on the first page

We zeroed in on two sites – Firstcry and Babyoye – for detailed research after skimming through the sites on search page

We also researched eBay and Junglee for strollers in detail to see if there was any difference between sites dedicated to baby products and the general shopping ones.”

Value Proposition

We only offer the finest baby products to help parents identify variety of options with convenience

Back-end Biz Description

Order Flowchart

Drop Shipment

Functions and Team

Functional Metrics

Functional MetricsFinancial metrics:

Total gross revenues- total gross revenue is a term used in online retailing to indicate a total sales dollar value for merchandise sold through a particular marketplace over a certain period. Total gross revenue for e-commerce retail companies means sale price charged to the customer multiplied by the number of items sold. It is also known as gross merchandise volume.

Gross & net Profit- Gross profit is the difference between a company's total revenues or sales of its products and services, and the direct costs associated with producing and selling a company’s products and services, which is defined as the cost of goods or cost of sales. Gross profit is also referred to as gross margin or gross income.

Functional Metrics

Financial metrics:

Elements of gross profit includes: Transportation Shipping Wages Salaries for employees or labourers directly involved in the manufacture or creation of a company Products or services

Functional Metrics

Net profit: Net profit, or net income, is a company's total earnings after subtracting all its expenses from its total sales and other income for a specific period. Typically, net profit is measured on a quarterly or annual basis. When compared with a company’s net profit during other periods, it can provide a useful measure for how profitable a company is over time and the overall performance of the company's management team.

Functional MetricsElements of net profit are found after subtracting:

Cost of goods sold Selling general and administrative expenses Depreciation costs Taxes from its revenues and any other income Sales commissions Advertising and marketing expenses Research and development expenses Legal and accounting fees General administrative and other expenses Salaries for employees not directly involved in the manufacture of the company's product or service, such as the CEO, CFO, marketing, R& D and administrative staff

Functional Metrics

Financial Metrics: Avg. revenue per customer-it is defined as the monetary contribution of a customer to a particular site made through transactions. Marketing spend- Marketing spending is an organization's total expenditure on marketing activities. This typically includes advertising and non-price promotion. It sometimes includes sales force spending and may include price promotions. Gross Margin by product type Sales per visitor Cost per visitor Cost/profit per new customer Cost & Revenue per campaign Revenue by product line

Functional MetricsWeb metrics:

Unique Users- Unique visitors refer to the number of distinct individuals requesting pages from the website during a given period, regardless of how often they visit. Page Impressions- A page view (PV) or page impression is a request to load a single HTML file (web page) of an Internet site. On the World Wide Web, a page request would result from a web surfer clicking on a link on another "page" pointing to the page in question. Time on Site- average time on site is a type of visitor report that provides data on the amount of time (in minutes or seconds) visitors have spent on your website. On an average time spent on large e-commerce site is 200 seconds as compared to small e-commerce sites which is 70 seconds. Bounce rate- the percentage of visitors to a particular website who navigate away from the site after viewing only one page. Average bounce rates :

Blogs: 70-98% Retail sites: 20-40%

Functional Metrics

Operations Metrics:

Average order process time- The expected period between the date an order is placed and when it is shipped. Factors that may affect processing time include weather, shipment errors, federal holidays, etc. Use of a warehouse management time that automates various aspects of the picking and packaging processing may help shorten the average order processing time.

Average shipping days to customer- it is defined as the number of days taken by a shipment to reach the customer who has ordered it.

Functional Metrics

Marketing Metrics:

Reach Response rate (Click through rate) Customer conversion rate No. coupon codes redeemed No. discount codes redeemed Campaign: Number of clicks and bounces Campaign: Number who stayed more than 10 pages

Financial Modelling

High Level

Supply

Technology

Wehaveassumedthattheorganiza2onisadver2singinonlineandofflinechannels•  DataProvided

PPCcosts 500 percustomerSocialMediaads 300 percustomerDisplayandAffiliateads 400 percustomer

•  Break-upoftrafficbysourceChannel Contribu>ontotrafficDirectTraffic 7OnlineAdver>sing/Affiliates 6.5Organicsearch 9PaidSearch 45Referrals 30SocialMediaAdver>sing 2.5We have assumed that the rela.ve break-up of traffic bysourceisconstantfortheperiodofplan.

•  SpendonPromo2ons,PRandSEO

2015 2016 2017 2018 2019 2020

spendonofflinepromos(5%) 550000 1265000 1818437.5 2509443.75 3078251 3871862.586

spendonSEO(3%) 330000 759000 1091062.5 1505666.25 1846950.6 2323117.552

SpendonPR(2%) 220000 506000 727375 1003777.5 1231300.4 1548745.034

The direct traffic may be aRributed to brandawareness (which is in turn, dependent onpromo>onalac>vity),OrganicsearchtoSEOandreferraltraffictoPR.Thereforemarke>ngspendmustbeallocatedtoeachofthesechannels.

Trafficbysourceisonethemetricstobedeliveredforthemarke7ngplan,andhasbeendeterminedbasisrevenuetargets•  Calcula7onofno.ofcustomersperyear

2015 2016 2017 2018 2019 2020

Salestobeachieved(inINR‘0000000) 1.1 2.53 3.64 5.02 6.16 7.74

Averageordervalue(assumedtobeconstant) 1500 1500 1500 1500 1500 1500

No.ofordersperyear 7333 16866 24245 33459 41043 51624

No.ofcustomersperyear* 7333 16866 24245 33459 41043 51624

No.ofvistorsperyear(at2.5%conversionrate) 293320 674640 969800 1338360 1641720 2064960

*ifeachuniqueorderisequivalenttoauniquecustomer•  Break-upofwebsitetrafficbysource

2015 2016 2017 2018 2019 2020

DirectTraffic 20532 47225 67886 93685 114920 144547

OnlineAdver7sing/Affiliates 19066 43852 63037 86993 106712 134222

Organicsearch 26399 60718 87282 120452 147755 185846

PaidSearch 131994 303588 436410 602262 738774 929232

Referrals 87996 202392 290940 401508 492516 619488

SocialMediaAdver7sing 7333 16866 24245 33459 41043 51624

Thenumberofvisitorsisanimportantconsidera4onforthemarke4ngplan,andhasbeendeterminedbasisrevenuetargets

•  CostofTraffic/Marke4ngSpend

2015 2016 2017 2018 2019 2020DirectTraffic 550000 1265000 1818438 2509444 3078251 3871863OnlineAdver4sing/Affiliates 190658 438516 630370 869934 1067118 1342224Organicsearch 330000 759000 1091063 1505666 1846951 2323118PaidSearch 1649925 3794850 5455125 7528275 9234675 11615400Referrals 220000 506000 727375 1003778 1231300 1548745SocialMediaAdver4sing 54998 126495 181838 250943 307823 387180Marke4ngSpendas%ofrevenue 27.2326 27.2327 27.2327 27.2332 27.2332 27.2331

2015 2016 2017 2018 2019 2020DirectTraffic 513 1181 1697 2342 2873 3614OnlineAdver4sing/Affiliates 477 1096 1576 2175 2668 3356Organicsearch 660 1518 2182 3011 3694 4646PaidSearch 3300 7590 10910 15057 18469 23231Referrals 2200 5060 7274 10038 12313 15487SocialMediaAdver4sing 183 422 606 836 1026 1291

•  Break-upofcustomerstrafficbysource

TheMarke)ngCentreandCustomerServicearestaffedkeepinginmindthemodestsizeofbusiness

•  TeamCostfortheCustomerServiceFunc)on

•  TeamCostsfortheMarke)ngFunc)on

AverageSalary(peranum) 2015 2016 2017 2018 2019 2020CountryManager-Marke)ng 15,00,000 1 1ProductManager 10,00,000 1 1 1 1 2 2CampaignManagers 7,00,000 1 1 1 1 2 2WebsiteManagers 5,00,000 2 2 2 2 4 4TeamCost 2700000 2700000 2700000 2700000 6900000 6900000

2015 2016 2017 2018 2019 2020No.ofOrdersperYear 7333 16866 24245 33459 41043 51624No.ofCustomersperYear 7333 16866 24245 33459 41043 51624No.ofComplaintsperyear 1466.6 3373.2 4849 6691.8 8208.6 10324.8No.ofComplaintsperday 4 9 13 18 22 28Maximumphone)merequired(Minutes) 20 46 66 92 112 141Maximumchat)merequired(Minutes) 1.5 3 4.5 6 6.5 8

Clearly, a single callcentre worksta=onlicense will be morethan enough, bringingthe team cost to INR40,000permonth

Cost/Order-Inv 15 perunitCost/Unit-OrderProcessing 22.5 perunitCost/Order-courier 135.92 perunit

•  DataGiven

Thecost-of-fulfilmenthasbeencalculatedbasistheno.orordersperyearandtheno.ofunitsperorder

•  Fulfilmentcosts

Cost/Order–Packing 45.18 perunitOnlinepaymentcosts 2% perorderCOD 50 perorderRTO 70 perorder

2015 2016 2017 2018 2019 2020No.ofunitssoldperyear 23758 53052 74041 99201 118142 144272No.ofordersperyr 7333 16866 24245 33459 41043 51624Averagenoofunitsperorder 3.24 3.15 3.05 2.96 2.88 2.79Inventorycost(InRs.) 356371.49 795781.00 1110616.68 1488010.70 1772129.25 2164083.81OrderProcessingCost(InRs.) 534557.24 1193671.50 1665925.03 2232016.05 2658193.88 3246125.71CourierCosts(InRs.) 3229269.05 7210989.14 10063880.47 13483645.68 16058192.92 19609898.82PackingCosts(InRs.) 1073505.3 2397147.714 3345533.82 4482365.707 5338221.942 6518914.842Onlinepaymentcosts(2%ofordervalue) 2199900 5059800 7273500 10037700 12312900 15487200CODorders 3666.5 8433 12122.5 16729.5 20521.5 25812RTOorders 733.3 1686.6 2424.5 3345.9 4104.3 5162.4CODcosts(In.Rs) 183325 421650 606125 836475 1026075 1290600RTOCosts(InRs.) 51331 118062 169715 234213 287301 361368TotalCostofFulfillement 7628259.06 17197101.35 24235296.01 32794426.15 39453013.99 48678191.18

Five years Profit & Loss

Five years P&L

Appendix

Marketing

Customer Service

Fulfilment

thank you.