the gazab ghaziabadi imt ghaziabad biac
TRANSCRIPT
Become Indra’s Advisor Contest (BIAC-8)Phase -2 Submission
The Gazab Ghaziabadi, IMT Ghaziabad
2
• E Commerce Industry insights
• Engage
• Channel Strategy
• Phase Wise Model• Partnerships
• Monitoring Performance
Agenda
SituationAnalysis
Objective
SWOT analysisStrategy
Tactics and Action Plan
Control
• E Commerce Industry insights
• Engage
• Channel Strategy
• Phase Wise Model• Partnerships
• Monitoring Performance
• Cost Benefit Analysis
FlipkartCreativity
AaramShop.com
AccessibleFun
HeritageRevenue
Amazon
Tropicana
• Consumer Insights
• Product Strategy
• Volume • Growth
Grocery
your Passion
3
• With sales at Rs. 12.6 Billion for 2014, an expected CAGR of 30% against 13%CAGR of traditional retail for the next 4 years, E-Commerce is the “next bigthing” in Indian retail
• E-tailing or selling of FMCG products online, has limited presence primarilythrough nascent players, a huge potential lies online
• With sales at Rs. 12.6 Billion for 2014, an expected CAGR of 30% against 13%CAGR of traditional retail for the next 4 years, E-Commerce is the “next bigthing” in Indian retail
Situation Analysis E-Commerce is becoming bigger by the day
Retail Market* – Rs. 25K Billion
Organized Retail- Rs. 1.7K Billion
Online Retail – Rs. 630 Billion
Online FMCG Market – Rs. 1.4
Billion
Pepsi E-Commerce: ?
#EY Rebirth of E-Com in India, http://www.ey.com/Publication/...*CRISIL Opinion, Feb 2014 http://www.crisil.com/pdf/research/...
Factors Driving E-Commerce Growth in India#
Increase in internet users
Increase in Mobile devices
More Women Shoppers
Rise in Time spent online
Increase in Discretionary Spend
Multiple Payment Methods
Increase in Transaction
ValueDiscounts
• E-tailing or selling of FMCG products online, has limited presence primarilythrough nascent players, a huge potential lies online
4
Situation Analysis
58% of survey respondents would definitely try buying PepsiCo products online
58%
30%
12%
0%
10%
20%
30%
40%
50%
60%
70%
Would you try buying PepsiCo products (Pepsi, Mt. Dew, Tropicana, Lay’s) online?*
Definitely Depends on the Price/Offer No
Opportunities in E-Commerce for PepsiCo
Frequent Purchasers,
Bulk consumers
Build loyalties among the
digital savvy
Opportunity at Long tail
High ticket sizeNew Products
buzz generation
Challenges PepsiCo faces on the E-Commerce front
Moving low Involvement,
impulse products
Restrictions on FDI in e-
commerce
High Cost of Last mile Delivery
Competition from QSRs
Need to Develop
capabilities and scale
*Source: Consumer Survey
5
Demographic & Behavioral Segmentation Psychographic Segmentation of Online Customer
Situation Analysis Understanding the Pepsi e-Customer
Demographic & Behavioral Segmentation
Consumer Drivers of Online Shopping
Convenience Price Fun Variety
Too busyStylish
Professionals
ConformistsShopping’s Fun
• Interacts with brands• Looks for discounts
Brand OrientationIndifferent Conscious
Self
Co
nfi
den
ce
Psychographic Segmentation of Online Customer
Low
Shopping ExperienceBoring Fun
Style ConsciousnessWhat’s Right What’s new
High
16 – 40 year old Male/Female Single or Married with children
Comfortable purchasing online Aware of PepsiCo brands
Opportunity to deeply interact with brands and offering price discounts would better serve customers
A target in Volumes and Branding would buildRevenues and Loyalty for PepsiCo
Objective
7
Engage
• Online Engagement and Interaction with 10 Lakh people
Volumes
• Serving 30,000 customers, achieving Operational Revenue of Rs. 88 Lakhs
Growth
• Maintaining Above Industry Growth Rate of 30%
ObjectivesPepsi on the E-Commerce - The objective is to drive both, Engagements and Volumes
8
CityNo of Internet
Users*E-Commerce
Visitors MonthFMCG Visitors per
monthPepsi visitors per
monthYearly Website
VisitorsPepsi Buyers
(yearly)Value of Sale
60% of Internet Users1.4% of E-Commerce
Visitors25% of FMCG Visitors X 12
At 2.7% Conversion Rate
Minimum Order Value Rs. 300
Mumbai 12,000,000 7,200,000 100,800 25,200 302,400 8,165 ₹ 2,449,440.00
Delhi 8,100,000 4,860,000 68,040 17,010 204,120 5,511 ₹ 1,653,372.00
Hyderabad 4,700,000 2,820,000 39,480 9,870 118,440 3,198 ₹ 959,364.00
Chennai 4,500,000 2,700,000 37,800 9,450 113,400 3,062 ₹ 918,540.00
Kolkata 4,400,000 2,640,000 36,960 9,240 110,880 2,994 ₹ 898,128.00
Bangalore 3,800,000 2,280,000 31,920 7,980 95,760 2,586 ₹ 775,656.00
Ahmedabad 2,800,000 1,680,000 23,520 5,880 70,560 1,905 ₹ 571,536.00
Pune 2,700,000 1,620,000 22,680 5,670 68,040 1,837 ₹ 551,124.00
Total 43,000,000 25,800,000 361,200 90,300 1,083,600 29,257 ₹ 87,77,160.00
ObjectivesThe market potential is valued at Rs. 8.8 Million for the top 8 cities in Year 1
*Source: IAMAI 2013 Data
YEAR 1
8 Cities 10 Lakh Engagements
30,000 Customers Served Revenue Rs. 8.8 Million
http://www.slideshare.net/AccelIndiaVC/...
1. Product Strategy– Bundling – Cross Selling– Upselling
2. Channel Strategy: To attain• The target of Rs. 88 Lakhs• Growth rate of 30% • Maximize engagement
… in Year 1, all 4 models need to be leveraged
Strategy
10
Frozen Dessert, 4%Fine Dining, 4% Cafés, 12% Casual Dining, 32% Quick Serve, 44%
Share of Food Services Industry by Place of Consumption*Frozen Dessert, 4%
Fine Dining, 4%
Cafés, 12%Casual Dining, 32% Quick Serve, 44%
Share of Food Services Industry by Place of Consumption*
Home
Target Home Consumption
Currently, Pepsico brands are consumed/bought with different
combinations of food/ groceries/restaurants Food
70% of OOH Snacks consumption takes place in FSRs and QSRs.
This consumption is done atBut, on E Commerce,
Consumption will occur at
Tropicana
CSD
Oats
Snacks
Aquafina
Grocery
Restaurants Food
Ready To Eat Food
PEPSICO
COMPLEMENTARY FOOD
OOH
Strategy Targeting Home Consumption through the e-commerce channel
11
In House Brand Cross Selling Strategy
In House Brand Cross Selling Strategy
In-Home Consumption
OOH Consumption
Time of the day and products consumed
< 100, 8%
< 250, 14%
< 300, 19%
< 350, 26%< 400, 24%
More than 4000
0%
20%
40%
IN INR
What is likely to be your Total Order value from Pepsi E-Commerce?
< 100 < 250
• Majority of PepsiCo Products have
been categorized under
“Anywhere Consumed Products”
• Quaker Oats, Gatorade and
Tropicana are consumed at
specific location
To Target Home Consumption:
• Move Bulk Volumes of CSDs and
Snacks (Order Value: 300)
• Cross Sell PepsiCo products with
other in-house products
• Cross sell Beverages with other
groceries and ready-to-eat food
What are you likely to purchase together online from the following list?
Products GroceryRestaurant
FoodConsumerDurables
Ready to Eat Food
Tropicana 61% 23% 5% 17%
CSD 69% 78% 12% 75%
Oats 56% 8% 10% 55%
Snacks 65% 26% 15% 45%
Aquafina 10% 78% 13% 34%
Key Points
Test Cross
In House Brand Cross Selling Strategy
Cross Selling Strategy
Strategy Cross Selling Strategy in Home Consumption
*Source: Consumer Survey
12
CSD
Snacks
Quaker Oats
Strategy PepsiCo In-house cross-selling Opportunity
0
2
4
6
8
10
0 2 4 6 8 10
Cu
sto
me
r W
illin
gne
ss
Makes a Meal
Chips
Puffed Snack
Health Drink
Flavored CSD
Breakfast Food
Sports Drink
0
2
4
6
8
10
0 2 4 6 8 10
Cu
sto
me
r W
illin
gne
ss
Makes a Meal
Sports Drink
Health Drink
Flavored CSD Chips
CSDPuffed Snack
Respondents consuming Snacks feels that CSDs complements their meal
Quaker consuming Respondents felt Health drink/Sports Drink as part of their meal is suitable for their healthy diet
0
2
4
6
8
10
0 2 4 6 8 10
Cu
sto
me
r W
illin
gne
ss
Makes a Meal
Health Drink
CSD
Breakfast Food
Sport Drink
Flavored CSD
ChipsPuffed Snack
1
2
3
Quaker consuming Respondents felt Health drink/Sports Drink as part of their meal is suitable for their healthy diet
Respondents consuming Snacks feels that CSDs complements their meal
Respondents consuming CSD preferred purchasing Chips and Puffed snacks
Respondents* consuming CSD preferred purchasing Chips and Puffed snacks
CSD
Snacks
Quaker Oats
*Source: Consumer Survey
13
StrategyCross Sell Potential Score (CSPS) indicates the potential to sell pairs or groups of PepsiCo products online
CSD
0.7
Snacks Breakfast food
2.6
0.3
2.0
0.1
1.5
1.3
0.2
0.7
1.0
6.6
5.0
4.0
3.7
3.3
6.7
5.7
6.7
0.3
CSPS: FM*WOC*Cluster Size
Potential to cross sellproducts in PepsiCo portfolio
Calculation of CSPS
• Form a Meal: Low: 2 High: 10
• Willingness of Consumer: Scale 0 to 10
• Number of Customers in cluster: 0 to
200 customers
(Number in the circle represents score out of
10)
CSD Snacks Breakfast food
14
Impulse Purchased Products Planned Purchased Products
Brand Preferred SKU
600 ml X 6, 2L X 3
180 g X 4, 67g X 6
180g X 4, 67g X 6
Rs 20 Pack bundled
Brand Preferred SKU
600 ml X 6, 2 L X 3
600 ml X 6, 2 L X 3
500 ml X 6, 1.2 L X 3
600 ml X 6, 2L X 3
StrategyProducts, often impulsively bought, will be sold as larger packs to drive frequent consumption
Impulse Purchased Products: Bundling and bulk delivery is preferred by the consumers (Consumed during an occasion such as a party)Planned Purchase Products: Planned purchased products are often consumed indoors
Consumer Insight: Purchases for Home Consumption
Brand Preferred SKU
600 g, 1 Kg
1L X 3, 200ml X 12
1L X 12
500ml X 6
Preferred SKUs for E Commerce
18 Interviews with: Online Shoppers Age Group: 22-40PepsiCo products
Consumers SEC: A2, B1
Impulse Purchased Products Planned Purchased Products
15
• Engage and Interact with the customers
• The end result of the interaction would be an order
placed on the portal The features of the portal would be:
Strategygopepsi.com would be PepsiCo’s e-commerce portal to engage the digital audience
Niche ProductsMobile friendly
webpages, Mobile App
An 1800 number to order and
book
Facebook E- Mail login
Bundled products in range of Rs. 150 – Rs. 300
Minimum order value of Rs. 300
Web enabled payments
One day delivery and on demand
deliveryCash on delivery
Opportunity to engage and
brand
Customer Details Captured
Targeted Offerings
Ob
ject
ive
gop
epsi
.co
mW
hat
? an
d H
ow
?
Direct Selling
Order Products online
E-Commerce portal to interact with Brands
Entirely PepsiCo Owned
Position: Convenience and Fun
Tagline: Dosto ke Saath Party Time
Promotion through Existing Product Channels & otherEconomic mediums• CSDs and Beverages would have an add-on leaf to
promote gopepsi.com• On Snacks, promoted through product labels. A stamp
impression that would read “Buy online at gopepsi.co
16
• Integrated Brand Strategy: Combo packs for in-house brands to drive trial generation and cross-sell
• Furthermore, Basket Analysis to be carried out to bundle frequently bought products
Standalone Brand Strategy: A brand wise strategy to better engage with the Target Group and offer bundled products
StrategyA product strategy to increase brand wise engagement, targeted offerings and drive cross-sell
Tropicana 6 X 250ml, targeted at mothers. Include nutritional benefits. All the variants sold
for the innovators
Gatorade: Customer acquisition and building
loyalty by increasing bulk purchases; reinstating the replenishment proposition
CSDs, Lays and Kurkure bundled as a the Party Pack
Quaker Oats and Tropicana bundled as the breakfast combo pack
17
Site map
• Home• About US
• About PepsiCo• Our Mission and Vision• PepsiCo Values & Philosophy• Global Code of Conduct• Speak Up
• Brands• Pepsi• Mt. Dew• Tropicana• Lays• Quaker Oats• Gatorade
• Party Zone• Health Zone• Shopping Zone
• Cart | Login• Select Product/Combo Pack• Add to Cart
• Payment• Request Payment• Payment through Credit card/Debit Card• Exit
Home
News Feed………………………………………………………………………………………………
News Feed………………………………………………………………………………………………
Brands Party Zone Health Zone Shopping Zone Contact US
Cart | Login
Home
News Feed………………………………………………………………………………………………………………………………
News Feed………………………………………………………………………………………………………………………………
Brands Party Zone Health Zone Shopping Zone Contact US
Cart | Login
About US
Site map
Strategy gopepsi.com Web Portal and Site Map
18
Objective Implementation Details
Objective:• To Engage PepsiCo customers on Social
Media platform• To generate Loyalty for the brand• To help them attain Self Recognition among
peers
Objective:• Generate Awareness about GoPepsi.com• Engage Customers through peer to peer
Referencing• Connecting GoPepsi.com as a youth
oriented platform
What to Do? (Best Selfie Contest)• PepsiCo online buyers can upload your Party pictures with PepsiCo
products on PepsiCo FB page and Twitter Handle.• The Best Selfie will be selected every Week and discount will be given
for his next purchase on Go pepsi, thereby building loyalty
What to Do? (Get Set Go Moment)• Share how Pepsi complemented your peppy moments with your friends.• The “Get Set Go” moment should be posted on
#DostoKeSaathArtyTime.• The Best “Get Set GO “ moment will will be selected every Week and
discount will be given for next purchase on Gopepsi.com, therebybuilding loyalty
Objective:• Generate Awareness about GoPepsi.com• Utilize the current Distribution Channel of
PepsiCo for promotion• Minimal cost of Promotion
What to Do? (Strapper)• Use of Strapper on every bottle of Pepsi. This will be done in limited
outlets of the cities where GoPepsi has been launched• The retailers will be selected basis Consumer point of congregation
Objective:• Generate Awareness about GoPepsi.com• Utilize the current Distribution Channel of
PepsiCo for promotion• Minimal cost of Promotion
What to Do? (Stamp)• The Stamp will be utilized to perform the task of Strapper on Packet
products. This stamp will be posted on every Packet product of PepsiCo.• This will be done in mass market, (to minimize the cost of selective
printing)
TestStrategy
Objective Implementation Details
1
2
3
4
StrategyPromotional Strategies for gopepsi.com | Digital Media and Traditional Distribution Channel
19
Strategy Web order Journey and Order Fulfilment– gopepsi.com
Order Processing
Customer is aware of
gopepsi.com
Searches for gopepsi/Login on the website
Landing page -Interacts with
the brands
Adds items to carts
Show Cart, Recommendations
Logins via email, Facebook,
Create New Account
Shipping Information
Confirm Order
Select Payment Method
Pay through portal
Cash on Delivery
Show Confirmation
Page
Order Received at Distribution Center
Inventory check for particulars
Particulars are picked and Packed
Delivery Add. attached on Consignment
Consignment handed over to deliverymen
Deliverymen transports to address
Cash on Delivery –Receives Payment
COD Cash flow settled
WEB JOURNEY
ORDER
FULFILIMENT
20
StrategyHybrid Retail Platform: Selling on Flipkart & Amazon to leverage the Marketplace model
Playing to its strengths, Pepsi would be an enabler and a marketer on the marketplace model and allow the retailers to differentiate on factors other than price
Exclusive Tie-Ins
Marketplace Model
Retailers, Direct selling
PepsiCo direct selling
Portal’s Exclusive seller
Only RetailersLow Involvement
FacilitatorUndercutting
Deep Engagement with Customers Channel Conflict
Complete Control –Drives Profits
Involvement and High Costs
Low Involvement Greater Control
Greater power with Flipkart/Amazon
Pros Cons
Partnership that PepsiCo should setup with major players on Hybrid Retail PlatformPartnership that PepsiCo should setup with major players on Hybrid Retail Platform
21
Strategy Hybrid Retail Models – Opportunities and Challenges
Build consumer trust to purchase FMCG products online
Testing ground for new product innovations and buzz generation
Extremely useful during peak seasons where delivery and distribution center assets would be stretched
Most likely earliest to set operations in Tier 2 and 3 cities
Single SKUs combined with other purchases can be moved
Opportunity to cross sell across product categories
First mover’s advantage
Undercutting –Since the product is undifferentiated, sellers would compete on price
Lack of Customer Intent to buy FMCG product here
Low Margins: Sharing of Margins with Distributor, Retailer and the marketplace
High delivery times – sometimes as high as a week
Controlling Distributors and Retailers – selling online
Uncertainty over when and how they’ll sell FMCG products online
Opportunities ChallengesOpportunities Challenges
22
Profits and Costs are being shared at each stage of the Order Fulfilment. The
Retailer also bears the cost for the delivery to be carried out
The retailer would need to move large volumes to breakeven
Hybrid Retail Models – Opportunities and Challenges
Pepsi Distribution
Center
Customer Warehouse
Retailer – Store
Customer
3rd Party Delivery
Flipkart Amazon Aaram Shop
• Strategy
Strategy
• Profits and Costs are being shared at each stage of the Order
Fulfilment. The Retailer also bears the cost for the delivery to be
carried out
• The retailer would need to move large volumes to breakeven
• Pepsi must be an enabler and a promoter on this front to
increase engagement and drive revenues
• For long term, the marketplace model would be successful
if large volumes are being sold online
• There may be growth of retailers who dedicatedly serve the
online market
• Profits and Costs are being shared at each stage of the Order
Fulfilment. The Retailer also bears the cost for the delivery to be
carried out
• The retailer would need to move large volumes to breakeven
• Pepsi must be an enabler and a promoter on this front to
increase engagement and drive revenues
• For long term, the marketplace model would be successful
if large volumes are being sold online
• There may be growth of retailers who dedicatedly serve the
online market
23
Strategy Promotional Brief on Hybrid Retail Platforms
Basic Description about Product Special Offers, Cross Sell Opportunity
Consumers also Viewed (Other items)Customer Reviews
Example for PepsiCo
FOR DEMONSTRATION ONLY
24
Strategy Pure e-tailers Business Model and Growth Prospects
Big Basket Modern RetailLocal Banya Aaram Shop
Acts as an inventory center;Just in time purchase fromsuppliers3rd party transport facility forend to end delivery
Marketplace model, any sellercan register online and sell onthe online platform.Possibility of Click-n-buymodels
Inventory models used, tie-ups with wholesalers and cash-and-carry partners across the city for just in time delivery
Market place for Localretailers to sell on onlineplatform.End to end delivery takencare by retailers
Revenue earned on profitmargin
Product MarginsRevenue earned on profitmargin. Low Investment oninventory
Revenue earned by ads,special offers, programs—andinformation shared withmarketers
Complete Orders delivered intime
UnknownComplete Orders delivered intime
Low responsibility
Most likely to scale higher Unknown. Deep walletsNeeds to grow beyond
Mumbai39 cities. Slow growth
Online Players
Role
Revenue
Predictability of Delivery
Future growth
Delivery3rd party transport facility forend to end delivery
Outsourced to 3rd party Outsourced locallyLast mile delivery carried out
by Retailers
Big Basket Modern RetailLocal Banya Aaram Shop
25
Buy Groceries worth Rs. 800 and add a 2L Bottle of
Pepsi for Rs. 30
Dedicated e-tail players, have the greatest potential to scale up. These formats should continue to see growth rate as high as 40% MoM
Faster delivery times, Smaller SKUs and frequent orders would be reasons for e-tail to have the largest share of Pepsi E-Commerce platform
Incremental Growth
Targeting working women in the age group of 30 +, brands such as Tropicana, Quaker Oats would move in higher volumes here.
Opportunity lies in selling CSDs as a add-on complementary product with groceries such as Ready-To-Eat products to ensure BTL promotion
A communications and promotional strategy to ensure impulse purchases such as CSDs and Snacks are added to the cart. E.g. A scheme that adds a Pepsi tin to your cart every time you’ve added Rs. 300 of PepsiCo products
StrategyPepsi on e-tailers and Modern Trade embracing Ecommerce portals
PepsiCo move as an enabler and a marketer on e-tailing platform would
ensure volumes.
26
Strategy Comparative Analysis and Ranking of the Channels
Scalability Profitability Customer Engagement Ease of Implementation Current performance Total Score
Gopepsi.com
Flipkart
Amazon
Big Basket
Local Banya
Aaram Shop
GO Pepsi
Flipkart
Amazon
Big Basket
Local Baniya
Aaram Shop
4
4.5
5
5.5
6
6.5
7
7.5
8
3.5 4.5 5.5 6.5 7.5 8.5 9.5 10.5
Pro
fita
bili
ty
Consumer Engagement
• Anticipating the performance of portals on the stated
parameters, gopepsi.com stands at the top followed
by Flipkart
• On Consumer engagement, gopepsi.com is ranked
above Flipkart and Amazon
• Long term profitability of Flipkart and gopepsi.com are
ranked similar
Key Points
Parameters to Measure Performance
Bubble Size represents Scalability
The Execution Plan -1. Timelines2. Partnerships3. Cost Benefit Analysis
Tactics/Action
28
Action & Tactics Timelines - gopepsi.com
Ideally, Amazon and Flipkart start selling
Nationwide Roll out
Currently, being sold through e-tailers
Test PhaseTo test and fine tune facilities before the 8 City
Rollout
Phase 18 City, Long duration test. To
optimize performance and better manage costs
Phase 2National Rollout targeting 30 odd
Tier 2 and Tier 3 Indian citiesbetter manage costs
29
Action & Tactics Identification of Target Cities for gopepsi.com –Phase 1
Key Points
• Big Basket is the current market leader in Online Grocery Marketplaces
• Small Players like Aaram Shop and local Baniya are growing by targeting Delhi andMumbai respectively
• Currently all the major players are targeting Tier 1 city
Keyword: Online GroceryKeyword: Big Basket.comKeyword: Local Baniya .comKeyword: AAramshop.com
Keyword Search Results | Relative to Keyword: Online Grocery
Source: http://www.google.com/trends/...
Keyword: Big Basket.comKeyword: Local Baniya .comKeyword: AAramshop.com
No. of Searches Location-wise
Keyword: Online Grocery
Pune 94
Gurgaon 86
Bangalore 74
Hyderabad 46
Chennai 46
Mumbai 42
New Delhi 38
Online Grocery Search Results
Pune
Pune (Tier 2 City) ranked 2nd in Online grocery buying searches, can be thenext potential market for Online Grocery products
30
Action & Tactics Test Phase : April 2015 – September 2015
Criteria for Selecting Test City
High visits on E- Commerce Purchases/Searches for Grocery Purchase online
High Internet Penetration
Relatively smaller in area– High Population per density to limit Delivery costs
High Summers to increase sales of Beverages
High consumption of all the brands
Duration of Test Phase: 6 months. Includes 3 months of Peak Seasons (April – June)
Pune is suggested to be the
test city
Sno. Parameters Scale
1 Conversion Rate 2.7%
2 Average Number of Visitors per Month 5,670
3 No. of Orders to be fulfilled in the entire Test Phase 920
4 Delivery Time 1 Day Delivery(Deviations, if any)
5 Delivery Cost @ 10% of Total Revenue
Metric to be Looked at
CODPay by Credit
Card
Conversion RatePay by
DebitCard
Test Phase: Points to be checked
31
• As Modern Trade players embrace e-commerce and growinto Tier 2 and Tier 3 cities, consumer trust in buying FMCGproducts online will increase
• Providing quick deliveries and high on loyalty, e-tailers,especially city based e-tailers will grow bigger
Action & Tactics City Selection for Phase 1 and Long Term Channel Growth
S no City Internet UsersRank:
GoogleAnalytics
Portals Available
1 Mumbai 12000000 7Natures’ Basket, Local banya,
Big Basket
2 Delhi 8100000 8Aaram shop, Dilli Grocery, City
Kirana.com
3 Hyderabad 4700000 5Big Basket.com, Easy
Mandi.com, Aaramshop.com
4 Chennai 4500000 6Chennai online Grocery.com,
Maliga Kadai.com, Big Basket.com
5 Kolkata 4400000 9Salt N Soap.com, Online grocery Bazaar.com, Big
Basket.com
6 Bangalore 3800000 4Big Basket.com, ZopNow.com,
Natures’ Basket
7 Ahmedabad 2800000 10Up2Home.com,
Aaramshop.com,GharVakhri.com
8 Pune 2700000 2Order my grocery.om, Natures’
Basket, Easy Dukaan.com
City Selection Criteria
Internet UsageRank: Google
AnalyticsAvailability of
Portals
Interaction with brands on Social
Media
Deeper Interaction on gopepsi.com
Orders Pepsi online through
e-tailers
Long term Channel Growth
• As Modern Trade players embrace e-commerce and growinto Tier 2 and Tier 3 cities, consumer trust in buying FMCGproducts online will increase
• Providing quick deliveries and high on loyalty, e-tailers,especially city based e-tailers will grow bigger
• Higher delivery times and greater engagement wouldmove gopepsi.com as an engagement portal. Marketingefforts need to carried out to move gopepsi.com to sustainhigher traffic
• Higher delivery times and greater engagement wouldmove gopepsi.com as an engagement portal. Marketingefforts need to carried out to move gopepsi.com to sustainhigher traffic
32
Action & Tactics
PepsiCo will have to partner with a series of players on the digital front
Promotions on Flipkart/Amazon to move volumes
Consumer Data to better target brands
Large Format Players
Tie Ups - Enablers of promotions and digital content to engage audiences
Sharing of data to better target products and manage distribution
Exclusive e-tail Players
Timely, Cost effective transportation to customer
Cash on Delivery –Settlement
Tracking, delivery on request time
3rd Party Delivery
Extensive integrated web payment facility
Payment Providers
End to end solution providers –from servers, website, order flow, Customer Mailers, SMS updates
CRM/Website Solution Providers
Customer support executive to manage orders and customer support to gopepsi
Customer Support Executive
Existing Digital Marketing agency for PepsiCo brands - provide branding, customer grievance online
Digital Advertising Agency
33
Pepsi’s E-Commerce strategy profit would increase by 10% YoYuntil Phase 1 ends
Action & Tactics
Test Phase 1
Jan 2015 - June 2015 July 2015 - June 2016 July 2016 - June 2017 July 2017 -June 2018 July 2018 - June 2019
Total Operational Revenue 275,562.00₹ 8,777,160.00₹ 11,410,308.00₹ 14,833,400.40₹ 19,283,420.52₹
Cost of Goods Sold 40% of Op Revenue 110,224.80₹ 2,633,148.00₹ 3,423,092.40₹ 4,450,020.12₹ 5,785,026.16₹
Infrastructure costs Approximated 100,000.00₹ 400,000.00₹ 50,000.00₹ 50,000.00₹ 50,000.00₹
Delivery Chargers 10% of Op Revenue 27,556.20₹ 877,716.00₹ 1,141,030.80₹ 1,483,340.04₹ 1,928,342.05₹
Human Labour Chargers Rs. 20 Lakhs 125,000.00₹ 2,000,000.00₹ 2,000,000.00₹ 2,000,000.00₹ 2,000,000.00₹
Credit Card Payment Charges 1% of Op Revenue 2,755.62₹ 87,771.60₹ 114,103.08₹ 148,334.00₹ 192,834.21₹
Promotional Charges Rs. 15 Lakhs 93,750.00₹ 1,500,000.00₹ 1,500,000.00₹ 1,500,000.00₹ 1,500,000.00₹
Taxation 12.5% of Op Revenue 34,445.25₹ 1,097,145.00₹ 1,426,288.50₹ 1,854,175.05₹ 2,410,427.57₹
Total Cost 493,731.87₹ 8,595,780.60₹ 9,654,514.78₹ 11,485,869.21₹ 13,866,629.98₹
Profit/Loss -218,169.87₹ 181,379.40₹ 1,755,793.22₹ 3,347,531.19₹ 5,416,790.54₹
Profit Ratio -44.2% 2.1% 18.2% 29.1% 39.1%
CPI 7.93
Test Phase 2
Cost Benefit Analysis: Pepsi E-Commerce will break even within 1.5 years
Pepsi’s E-Commerce strategy profit would increase by 10% YoYuntil Phase 1 ends ₹ 0
₹ 5
₹ 10
₹ 15
₹ 20
Test Phase Year 1 Year 2 Year 3 Year 4
Mill
ion
s
Total Operational Revenue Total Cost
34
Met
rics
To optimize engagement and improve customer experience, the e-commerce strategy and action plan must be closely monitored. • Furthermore, PepsiCo should measure metrics of its own portal and monitor closely the performance of its brand on
other portals• The metrics must be brought down to levels of region, Channels, and Customer Profile to better understand and
implement better changesThe following are some metrics/measure suggested to optimize performance
Control Monitoring Performance of Pepsi E-Commerce
To optimize engagement and improve customer experience, the e-commerce strategy and action plan must be closely monitored. • Furthermore, PepsiCo should measure metrics of its own portal and monitor closely the performance of its brand on
other portals• The metrics must be brought down to levels of region, Channels, and Customer Profile to better understand and
implement better changesThe following are some metrics/measure suggested to optimize performance
Customer Experience (gopepsi.com)
Traffic, Time Spent
Site Usage, Orders
Cart Abandonment Rate
Marketing Metrics (All channels)
Customers Acquired, Retained
Customer Profile, Shopping Basket
Location Analysis
Financial Metrics (All channels)
Revenues
Expenses (Return on Investment)
Delivery and Other Costs
Change Effected
Targets, Growth Rate
Product Strategy Channel Management
Revenues, Costs
Timelines for phases
User Experience
Partnerships
Met
rics
35
AppendixIn Depth Interviews and Survey Respondents Demographics and Behavioral
• 215 (153 Males and 62 Females) respondents filled an online Survey. The survey was designed to understand Consumers’ behavior specific
to PepsiCo.
• Respondents were majorly- college, school students (Age Group: 16-20 yrs- 15%, 20-25 yrs- 63%, 25-30yrs- 12%, Above 30- 10%)
• 63% of respondents had purchased on an E Commerce portal atleast once (Females: 72% , Males: 28%)
• To formulate the bundling strategy, Consumers preferred choice was recorded. Sinilar, was done to formulate the upselling strategy.
• 42 (25 Males and 17 Females) Interviews were conducted with an objective to find consumer behavior while using an E Commerce
platform.
• 7 (2M, 1F, Bangalore) respondents were younger than 18 years old, 19 (7M, 4F) respondents in age gap of 19 – 24 and 16
respondents were in age gap of 25 (5M, 2F) and above. None of the respondents were married.
• The interviewees were regular internet users, having purchased on E Commerce platform atleast once.
• Interviews were conducted in Preet Vihar and Vikas Puri (Delhi)
In D
epth
Inte
rvie
ws
Surv
ey R
esp
on
den
ts
36
Thank you.Akshay Maggu
Akshay Nangia
Sourabh Surana
The Gazab Ghaziabadi, IMT Ghaziabad