Become Indra’s Advisor Contest (BIAC-8)
Phase -2 Submission
The Gazab Ghaziabadi, IMT Ghaziabad
Agenda
Situation
Analysis
•
• • E ECommerce
CommerceIndustry
Industryinsights
insights
Objective
Accessible
Creativity Fun
your Passion
Flipkart
Strategy
• • Engage
Engage
•
Consumer Insights
Volume
• • SWOT
Channel
Strategy
analysis
Channel
Strategy
•
Growth
•
Product Strategy
Tropicana
Grocery
Revenue AaramShop.com
Heritage
Amazon
Tactics and
Action Plan
Control
• • Phase
PhaseWise
WiseModel
Model
• • Partnerships
Partnerships
•
Cost Benefit Analysis
• • Monitoring
MonitoringPerformance
Performance
2
Situation
Analysis
•
•
E-Commerce is becoming bigger by the day
With sales at Rs. 12.6 Billion for 2014, an expected CAGR of 30% against 13%
• 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 big
CAGR of traditional retail for the next 4 years, E-Commerce is the “next big
thing” in Indian retail
thing” in Indian retail
•
E-tailing or selling of FMCG products online, has limited presence primarily
E-tailing or selling of FMCG products online, has limited presence primarily
through nascent players, a huge potential lies online
through nascent players, a huge potential lies online
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
Value
Retail Market* – Rs. 25K
Billion
Organized Retail- Rs.
1.7K Billion
Online Retail – Rs. 630
Billion
Online FMCG
Market – Rs. 1.4
Billion
Pepsi ECommerce: ?
Discounts
#EY Rebirth of E-Com in India, http://www.ey.com/Publication/...
*CRISIL Opinion, Feb 2014 http://www.crisil.com/pdf/research/...
3
58% of survey respondents would definitely try buying PepsiCo
products online
Situation
Analysis
Would you try buying PepsiCo products (Pepsi, Mt. Dew,
Tropicana, Lay’s) online?*
70%
58%
60%
50%
40%
30%
30%
20%
12%
10%
0%
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 size
New Products
buzz
generation
Challenges PepsiCo faces on the E-Commerce front
Moving low
Involvement,
impulse
products
Restrictions on
FDI in ecommerce
High Cost of
Last mile
Delivery
*Source: Consumer Survey
Competition
from QSRs
Need to
Develop
capabilities
and scale
4
Understanding the Pepsi e-Customer
Demographic
Demographic&&Behavioral
BehavioralSegmentation
Segmentation
Psychographic
PsychographicSegmentation
SegmentationofofOnline
OnlineCustomer
Customer
High





Indifferent
Brand Orientation
16 – 40 year old
Male/Female
Single or Married with children
Comfortable purchasing online
Aware of PepsiCo brands
Consumer Drivers of Online Shopping
Too busy
Self Confidence
Situation
Analysis
Boring
Price
Fun
Stylish
Professionals
Shopping Experience
Conformists
Convenience
Conscious
Fun
Shopping’s Fun
• Interacts with brands
• Looks for discounts
Variety
Low
What’s Right
Style Consciousness
What’s new
Opportunity to deeply interact with brands and offering price discounts would better serve customers
5
Objective
A target in Volumes and Branding would build
Revenues and Loyalty for PepsiCo
Objectives
Pepsi on the E-Commerce - The objective is to drive both,
Engagements and Volumes
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%
7
Objectives
The market potential is valued at Rs. 8.8 Million for the top 8
cities in Year 1
City
No of Internet
Users*
E-Commerce
Visitors Month
60% of Internet Users
Mumbai
FMCG Visitors per
month
Pepsi visitors per
month
Yearly Website
Visitors
1.4% of E-Commerce
25% of FMCG Visitors
Visitors
Pepsi Buyers
(yearly)
Value of Sale
At 2.7% Conversion Minimum Order Value
Rate
Rs. 300
X 12
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
YEAR 1
8 Cities
30,000 Customers Served
*Source: IAMAI 2013 Data
10 Lakh Engagements
Revenue Rs. 8.8 Million
http://www.slideshare.net/AccelIndiaVC/...
8
Strategy
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
Targeting Home Consumption through the e-commerce channel
PEPSICO
Tropicana
COMPLEMENTARY
FOOD
CSD
Grocery
onareE Commerce,
Currently, Pepsico But,
brands
consumed/bought with different
This consumption is done at
Oats
Restaurants Food
Snacks
Ready To Eat Food
Consumption will occur at
combinations of food/ groceries/restaurants Food
Aquafina
Share of Food Services
Industry
by PlaceIndustry
of Consumption*
Share of
Food Services
by Place of Consumption*
Frozen
Frozen Dessert,
Dessert, 4%
4%
Cafés, 12%
Fine Dining,
Fine Dining,
4% 4% Cafés, 12%
Casual Dining, 32%
Casual Dining, 32%
Quick Serve, 44%
Quick Serve, 44%
Home
OOH
70% of OOH Snacks
consumption
takes place in FSRs and QSRs.
Target
Home Consumption
10
Test
Strategy
Cross
Cross Selling Strategy in Home Consumption
InInHouse
HouseBrand
BrandCross
CrossSelling
SellingStrategy
Strategy
Key Points
In-Home Consumption
•
Majority of PepsiCo Products have
been
categorized
under
“Anywhere Consumed Products”
•
OOH
Consumption
Tropicana
Cross
Selling
Strategy
In House
Brand
Cross
Selling Strategy
40%
< 350, 26%
20%
< 400, 24%
< 300, 19%
< 250, 14%
0%
More than
4000
< 100, 8%
< 100
IN INR
Oats,
are
Gatorade
and
consumed
at
specific location
Time of the day and products consumed
What is likely to be your Total Order value
from Pepsi E-Commerce?
Quaker
To Target Home Consumption:
What are you likely to purchase together online from the
following list?
Products
Grocery
Tropicana
CSD
Oats
Snacks
Aquafina
61%
69%
56%
65%
10%
Restaurant Consumer Ready to Eat
Food
Durables
Food
23%
5%
17%
78%
12%
75%
8%
10%
55%
26%
15%
45%
78%
13%
34%
•
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
< 250
*Source: Consumer Survey
11
PepsiCo In-house cross-selling Opportunity
Strategy
Customer Willingness
10
1
CSD
CSD
8
Flavored
CSD
Chips
Respondents*
Respondentsconsuming
consumingCSD
CSDpreferred
preferredpurchasing
purchasingChips
Chipsand
and
Puffed
snacks
Puffed snacks
Puffed Snack
6
Health Drink
Breakfast Food
4
2
Sports Drink
0
0
Customer Willingness
8
Puffed
Snack
6
4
Breakfast Food
10
Respondents
Respondentsconsuming
consumingSnacks
Snacksfeels
feelsthat
thatCSDs
CSDscomplements
complementstheir
their
meal
meal
Sport
Drink
CSD
Flavored
Health Drink CSD
2
0
4 Makes a Meal
2
10
Customer Willingness
6
Chips
8
0
3
4 Makes a Meal
Snacks
Snacks
10
2
2
6
8
10
Quaker
Oats
Quaker Oats
8
6
Flavored CSD
Chips
Health
Drink
4
CSD
2
Quaker
Quakerconsuming
consumingRespondents
Respondentsfelt
feltHealth
Healthdrink/Sports
drink/SportsDrink
Drink
asaspart
partofoftheir
theirmeal
mealisissuitable
suitablefor
fortheir
theirhealthy
healthydiet
diet
Sports
Drink
Puffed
Snack
0
0
2
4
Makes a Meal 6
8
10
*Source: Consumer Survey
12
Strategy
Cross Sell Potential Score (CSPS) indicates the potential to sell
pairs or groups of PepsiCo products online
CSD
CSD
Snacks
Snacks
6.6
5.0
Breakfast
Breakfastfood
food
4.0
3.7
0.7
0.7
0.2
0.1
0.3
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
6.7
2.0
10)
6.7
1.3
CSPS: FM*WOC*Cluster Size
0.3
2.6
1.5
3.3
5.7
1.0
Potential to cross sell
products in PepsiCo portfolio
13
Strategy
Products, often impulsively bought, will be sold as larger packs
to drive frequent consumption
18 Interviews with:
PepsiCo products
Consumers
Online Shoppers
Age Group: 22-40
SEC: A2, B1
Consumer Insight: Purchases for Home 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
Preferred SKUs for E Commerce
Planned Purchased
Planned
PurchasedProducts
Products
Impulse Purchased
Impulse
PurchasedProducts
Products
Brand
Preferred SKU
Brand
Preferred SKU
Brand
Preferred SKU
600 ml X 6, 2 L X 3
600 ml X 6, 2L X 3
600 g, 1 Kg
600 ml X 6, 2 L X 3
180 g X 4, 67g X 6
1L X 3, 200ml X 12
500 ml X 6, 1.2 L X 3
180g X 4, 67g X 6
1L X 12
Rs 20 Pack bundled
500ml X 6
600 ml X 6, 2L X 3
14
gopepsi.com
Objective
Strategy
gopepsi.com would be PepsiCo’s e-commerce portal to engage
the digital audience
•
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:
E-Commerce portal to
interact with Brands
Direct Selling
Order Products online
Entirely PepsiCo Owned
What? and How?
Position: Convenience and Fun
Niche Products
Mobile 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
delivery
Cash on delivery
Opportunity to
engage and
brand
Customer Details
Captured
Targeted
Offerings
Tagline: Dosto ke Saath Party Time
Promotion through Existing Product Channels & other
Economic 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
15
Strategy
A product strategy to increase brand wise engagement, targeted
offerings and drive cross-sell
Standalone Brand Strategy: A brand wise strategy to
better engage with the Target Group and offer bundled
products
• 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
CSDs, Lays and Kurkure bundled as a the Party Pack
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
Quaker Oats and Tropicana bundled as the breakfast
combo pack
16
gopepsi.com Web Portal and Site Map
Strategy
Site
Sitemap
map
Cart | Login
Home
About US
Home
Brands
Brands
Party Zone
Party Zone
Health Zone
Health Zone
Shopping Zone
Shopping Zone
Contact US
Contact US
•
•
•
•
•
•
News Feed
………………………………
………………………………
………………………………
News Feed
………………………………
………………………………
………………………………
News Feed
………………………………
………………………………
………………………………
News Feed
………………………………
………………………………
………………………………
•
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
17
Promotional Strategies for gopepsi.com | Digital Media and
Traditional Distribution Channel
Strategy
Test
Strategy
Objective
Objective
Implementation
Implementation Details
Details
1
Objective:
• To Engage PepsiCo customers on Social
Media platform
• To generate Loyalty for the brand
• To help them attain Self Recognition among
peers
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
2
Objective:
• Generate Awareness about GoPepsi.com
• Engage Customers through peer to peer
Referencing
• Connecting GoPepsi.com as a youth
oriented platform
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, thereby
building loyalty
3
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
4
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)
18
Strategy
Web order Journey and Order Fulfilment– gopepsi.com
Searches for
gopepsi/Login
on the website
Landing page Interacts with
the brands
Adds items to
carts
Logins via email,
Facebook,
Show Cart,
Recommendations
Order
Processing
Show
Confirmation
Page
Confirm Order
Create New
Account
Pay through
portal
Cash on
Delivery
Select Payment
Method
Shipping
Information
Inventory check for
particulars
Particulars are picked
and Packed
Delivery Add. attached
on Consignment
COD Cash flow settled
Cash on Delivery –
Receives Payment
Deliverymen transports
to address
Consignment handed
over to deliverymen
ORDER
FULFILIMENT
Order Received at
Distribution Center
WEB JOURNEY
Customer is
aware of
gopepsi.com
19
Strategy
Hybrid Retail Platform: Selling on Flipkart & Amazon to leverage
the Marketplace model
Partnership
Partnershipthat
thatPepsiCo
PepsiCoshould
shouldsetup
setupwith
withmajor
majorplayers
playerson
onHybrid
HybridRetail
RetailPlatform
Platform
Pros
Cons
Only Retailers
Low Involvement
Facilitator
Undercutting
Retailers, Direct
selling
Deep Engagement
with Customers
Channel Conflict
PepsiCo direct
selling
Complete Control –
Drives Profits
Involvement and
High Costs
Portal’s Exclusive
seller
Low Involvement
Greater Control
Greater power with
Flipkart/Amazon
Marketplace
Model
Exclusive
Tie-Ins
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
20
Strategy
Hybrid Retail Models – Opportunities and Challenges
Opportunities
Opportunities
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
Challenges
Challenges
Undercutting –Since the product is undifferentiated, sellers
would compete on price
Uncertainty over when and how they’ll sell FMCG products
online
Lack of Customer Intent to buy FMCG product here
Most likely earliest to set operations in Tier 2 and 3 cities
Controlling Distributors and Retailers – selling online
Single SKUs combined with other purchases can be moved
Opportunity to cross sell across product categories
Low Margins: Sharing of Margins with Distributor, Retailer
and the marketplace
First mover’s advantage
High delivery times – sometimes as high as a week
21
Profits and Costs are being shared at each stage of the Order Fulfilment. The
• Strategy
Retailer also bears the cost for the delivery to be carried out
The retailer would need to move large volumes to breakeven
Strategy
Hybrid Retail Models – Opportunities and Challenges
Flipkart Amazon
Aaram Shop
Pepsi
Distribution
Center
• • Profits
Profitsand
andCosts
Costsare
arebeing
beingshared
sharedatateach
eachstage
stageofofthe
theOrder
Order
Fulfilment.
Fulfilment.The
TheRetailer
Retaileralso
alsobears
bearsthe
thecost
costfor
forthe
thedelivery
deliverytotobebe
carried
carriedout
out
• • The
Theretailer
retailerwould
wouldneed
needtotomove
movelarge
largevolumes
volumestotobreakeven
breakeven
Customer
Warehouse
Retailer – Store
• • Pepsi
Pepsimust
mustbe
bean
anenabler
enablerand
andaapromoter
promoteron
onthis
thisfront
fronttoto
3rd
Party
Delivery
increase
increaseengagement
engagementand
anddrive
driverevenues
revenues
• • For
Forlong
longterm,
term,the
themarketplace
marketplacemodel
modelwould
wouldbe
besuccessful
successful
ififlarge
largevolumes
volumesare
arebeing
beingsold
soldonline
online
Customer
• • There
Theremay
maybe
begrowth
growthofofretailers
retailerswho
whodedicatedly
dedicatedlyserve
servethe
the
online
onlinemarket
market
22
Strategy
Promotional Brief on Hybrid Retail Platforms
Example for PepsiCo
Customer Reviews
Basic Description about Product
Special Offers, Cross Sell Opportunity
Consumers also Viewed (Other items)
FOR DEMONSTRATION ONLY
23
Strategy
Pure e-tailers Business Model and Growth Prospects
Online Players
Big Basket
Big
Basket
Local Banya
Local
Banya
Aaram Shop
Aaram
Shop
Modern Retail
Modern
Retail
Role
Acts as an inventory center;
Just in time purchase from
suppliers
3rd party transport facility for
end to end delivery
Inventory models used, tieups with wholesalers and
cash-and-carry partners
across the city for just in time
delivery
Market place for Local
retailers to sell on online
platform.
End to end delivery taken
care by retailers
Marketplace model, any seller
can register online and sell on
the online platform.
Possibility of Click-n-buy
models
Delivery
3rd party transport facility for
end to end delivery
Outsourced locally
Last mile delivery carried out
by Retailers
Outsourced to 3rd party
Revenue
Revenue earned on profit
margin
Revenue earned on profit
margin. Low Investment on
inventory
Revenue earned by ads,
special offers, programs—and
information shared with
marketers
Product Margins
Predictability of
Delivery
Complete Orders delivered in
time
Complete Orders delivered in
time
Low responsibility
Unknown
Future growth
Most likely to scale higher
Needs to grow beyond
Mumbai
39 cities. Slow growth
Unknown. Deep wallets
24
Strategy
Pepsi on e-tailers and Modern Trade embracing Ecommerce
portals
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
Buy Groceries
worth Rs. 800 and
add a 2L Bottle of
Pepsi for Rs. 30
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
PepsiCo move as an enabler and a
marketer on e-tailing platform would
ensure volumes.
25
Comparative Analysis and Ranking of the Channels
Strategy
Parameters to Measure Performance
Scalability
Profitability
Customer Engagement
Ease of Implementation
Current performance
Total Score
Gopepsi.com
Flipkart
Amazon
Big Basket
Local Banya
Aaram Shop
8
Key Points
7.5
Flipkart
• Anticipating the performance of portals on the stated
Profitability
7
6.5
6
parameters, gopepsi.com stands at the top followed
GO Pepsi
Big Basket
by Flipkart
Aaram Shop
• On Consumer engagement, gopepsi.com is ranked
5.5
5
Amazon
4.5
Local Baniya
Bubble Size
represents Scalability
4
3.5
4.5
5.5
6.5
7.5
8.5
9.5
10.5
above Flipkart and Amazon
• Long term profitability of Flipkart and gopepsi.com are
ranked similar
Consumer Engagement
26
Tactics/Action
The Execution Plan 1. Timelines
2. Partnerships
3. Cost Benefit Analysis
Action &
Tactics
Timelines - gopepsi.com
Test Phase
To test and fine tune facilities before the 8 City
Rollout
Currently, being sold
through e-tailers
Phase 1
Phase 2
8 City, Long duration test. To
optimize performance and better
manage costs
National Rollout targeting 30 odd
Tier 2 and Tier 3 Indian cities
better manage costs
Ideally, Amazon and
Flipkart start selling
Nationwide
Roll out
28
Action &
Tactics
Identification of Target Cities for gopepsi.com –Phase 1
Keyword Search Results | Relative to Keyword: Online Grocery
No. of Searches
Location-wise
Keyword: Online Grocery
Keyword: Big Basket.com
Keyword: Local Baniya .com
Keyword: AAramshop.com
Keyword: Online Grocery
Keyword: Big Basket.com
Keyword: Local Baniya .com
Keyword: AAramshop.com
Pune
Key Points
Online Grocery
Search Results
Pune
94
Gurgaon
86
Bangalore
74
Hyderabad
46
Chennai
46
Mumbai
42
New Delhi
38
•
Big Basket is the current market leader in Online Grocery Marketplaces
•
Small Players like Aaram Shop and local Baniya are growing by targeting Delhi and
Mumbai respectively
•
Currently all the major players are targeting Tier 1 city
Pune (Tier 2 City) ranked 2nd in Online grocery buying searches, can be the
next potential market for Online Grocery products
Source: http://www.google.com/trends/...
29
Action &
Tactics
Test Phase : April 2015 – September 2015
Duration of Test Phase: 6 months. Includes 3 months of Peak Seasons (April – June)
High visits on E- Commerce Purchases/Searches for Grocery Purchase online
Pune
High Internet Penetration
Criteria for Selecting
Test City
Relatively smaller in area– High Population per density to limit Delivery costs
is suggested to be the
test city
High Summers to increase sales of Beverages
High consumption of all the brands
Metric to be Looked at
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
Test Phase: Points to be
checked
COD
Pay by Credit
Card
Conversion Rate
Pay by
DebitCard
30
Action &
Tactics
City Selection for Phase 1 and Long Term Channel Growth
City Selection
Criteria
Internet Usage
Rank: Google
Analytics
Availability of
Portals
S no
City
Internet Users
Rank:
Google
Analytics
Portals Available
1
Mumbai
12000000
7
Natures’ Basket, Local banya,
Big Basket
2
Delhi
8100000
8
Aaram shop, Dilli Grocery, City
Kirana.com
3
Hyderabad
4700000
5
Big Basket.com, Easy
Mandi.com, Aaramshop.com
4
Chennai
4500000
6
Chennai online Grocery.com,
Maliga Kadai.com, Big
Basket.com
5
Kolkata
4400000
9
Salt N Soap.com, Online
grocery Bazaar.com, Big
Basket.com
6
Bangalore
3800000
4
Big Basket.com, ZopNow.com,
Natures’ Basket
7
Ahmedabad
2800000
10
Up2Home.com,
Aaramshop.com,
GharVakhri.com
8
Pune
2700000
2
Order my grocery.om, Natures’
Basket, Easy Dukaan.com
Long term Channel Growth
• • AsAsModern
ModernTrade
Tradeplayers
playersembrace
embracee-commerce
e-commerceand
andgrow
grow
into
Tier
2
and
Tier
3
cities,
consumer
trust
in
buying
FMCG
into Tier 2 and Tier 3 cities, consumer trust in buying FMCG
products
online
will
increase
products
online
will
increase
• • Providing
quick
deliveries
Providing quick deliveriesand
andhigh
highononloyalty,
loyalty,e-tailers,
e-tailers,
especially
city
based
e-tailers
will
grow
bigger
especially city based e-tailers will grow bigger
• • Higher
Higher delivery
delivery times
times and
and greater
greater engagement
engagement would
would
move
gopepsi.com
as
an
engagement
portal.
Marketing
move gopepsi.com as an engagement portal. Marketing
efforts
effortsneed
needtotocarried
carriedout
outtotomove
movegopepsi.com
gopepsi.comtotosustain
sustain
higher
traffic
higher traffic
Interaction with
brands on Social
Media
Deeper
Interaction on
gopepsi.com
Orders Pepsi
online through
e-tailers
31
PepsiCo will have to partner with a series of players on the
digital front
Action &
Tactics
Large Format
Players
Exclusive e-tail
Players
3rd
Party Delivery
Promotions on Flipkart/Amazon
to move volumes
Consumer Data to better target
brands
Tie Ups - Enablers of promotions
and digital content to engage
audiences
Sharing of data to better target
products and manage distribution
Timely, Cost effective
transportation to customer
Cash on Delivery –Settlement
Tracking, delivery on request time
Payment Providers
Extensive integrated web
payment facility
CRM/Website
Solution Providers
End to end solution providers –
from servers, website, order flow,
Customer Mailers, SMS updates
Customer Support
Executive
Customer support executive to
manage orders and customer
support to gopepsi
Digital Advertising
Agency
Existing Digital Marketing agency
for PepsiCo brands - provide
branding, customer grievance
online
32
Action &
Tactics
Cost Benefit Analysis: Pepsi E-Commerce will break even within
1.5 years
Test Phase 1
Test Phase 2
Jan 2015 - June 2015 July 2015 - June 2016 July 2016 - June 2017
July 2017 -June 2018 July 2018 - June 2019
₹
275,562.00 ₹
8,777,160.00 ₹
11,410,308.00 ₹
14,833,400.40 ₹
19,283,420.52
Total Operational Revenue
₹
Infrastructure costs
Approximated
₹
Delivery Chargers
10% of Op Revenue
₹
Human Labour Chargers
Rs. 20 Lakhs
₹
Credit Card Payment Charges 1% of Op Revenue
₹
Promotional Charges
Rs. 15 Lakhs
₹
Taxation
12.5% of Op Revenue ₹
Total Cost
₹
Cost of Goods Sold
40% of Op Revenue
Pepsi’s E-Commerce
Pepsi’sprofit
E-Commerce
strategy
would
strategy
profit
increase by 10% would
YoY
increase
by
10%
until Phase 1 endsYoY
until Phase 1 ends
₹
Millions
Profit/Loss
Profit Ratio
CPI
110,224.80
100,000.00
27,556.20
125,000.00
2,755.62
93,750.00
34,445.25
493,731.87
₹
₹
₹
₹
₹
₹
₹
₹
-218,169.87 ₹
-44.2%
2,633,148.00
400,000.00
877,716.00
2,000,000.00
87,771.60
1,500,000.00
1,097,145.00
8,595,780.60
₹
₹
₹
₹
₹
₹
₹
₹
181,379.40 ₹
2.1%
7.93
3,423,092.40
50,000.00
1,141,030.80
2,000,000.00
114,103.08
1,500,000.00
1,426,288.50
9,654,514.78
₹
₹
₹
₹
₹
₹
₹
₹
1,755,793.22 ₹
18.2%
4,450,020.12
50,000.00
1,483,340.04
2,000,000.00
148,334.00
1,500,000.00
1,854,175.05
11,485,869.21
₹
₹
₹
₹
₹
₹
₹
₹
5,785,026.16
50,000.00
1,928,342.05
2,000,000.00
192,834.21
1,500,000.00
2,410,427.57
13,866,629.98
3,347,531.19 ₹
29.1%
5,416,790.54
39.1%
₹ 20
₹ 15
Total Operational Revenue
Total Cost
₹ 10
₹5
₹0
Test Phase
Year 1
Year 2
Year 3
Year 4
33
Control
Monitoring Performance of Pepsi E-Commerce
To optimize engagement and improve customer experience, the e-commerce strategy and action plan must be closely
To optimize engagement and improve customer experience, the e-commerce strategy and action plan must be closely
monitored.
monitored.
• Furthermore, PepsiCo should measure metrics of its own portal and monitor closely the performance of its brand on
• Furthermore, PepsiCo should measure metrics of its own portal and monitor closely the performance of its brand on
other portals
other portals
• The metrics must be brought down to levels of region, Channels, and Customer Profile to better understand and
• The metrics must be brought down to levels of region, Channels, and Customer Profile to better understand and
implement better changes
implement better changes
The following are some metrics/measure suggested to optimize performance
The following are some metrics/measure suggested to optimize performance
Metrics
Metrics
Customer
Experience
(gopepsi.com)
Traffic, Time Spent
Targets, Growth Rate
Site Usage, Orders
Product Strategy Channel
Management
Cart Abandonment Rate
Revenues, Costs
Customers Acquired, Retained
Marketing Metrics
(All channels)
Customer Profile, Shopping Basket
Location Analysis
Revenues
Financial Metrics
(All channels)
Expenses (Return on Investment)
Change Effected
Timelines for phases
User Experience
Partnerships
Delivery and Other Costs
34
In Depth Interviews
Appendix
In Depth Interviews and Survey Respondents Demographics and
Behavioral
• 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.
Survey Respondents
• Interviews were conducted in Preet Vihar and Vikas Puri (Delhi)
• 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.
35
Thank you.
Akshay Maggu
Akshay Nangia
Sourabh Surana
The Gazab Ghaziabadi, IMT Ghaziabad
36