lnvestor presentation fy - 2015 -16 [company update]
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eCommerce Simplified
eCommerce Simplified
This presentation and the accompanying slides (the “Presentation”), which has been prepared by iStreet NetworkLimited (the “Company”), solely for information purposes and do not constitute any offer, recommendation orinvitation to purchase or subscribe for any securities, and shall not form the basis or be relied on in connection withany contract or binding commitment whatsoever. No offering of securities of the Company will be made except bymeans of a statutory offering document containing detailed information about the Company.
Our actual results may differ materially from those included in this presentation for a variety of reasons, including,but not limited to - changes in political, business, and economic conditions; foreign exchange rate fluctuations; theimpact and integration of recent and future acquisitions; our need to successfully react to the increasingimportance of mobile payments and mobile commerce and the social aspect of commerce; an increasinglycompetitive environment for our businesses; the complexity of managing an increasingly large and growingenterprise, with a broad range of businesses; our need to manage regulatory, tax and litigation risks (includingrisks); and our need to timely upgrade and develop our systems, infrastructure, and customer service capabilities atreasonable cost while maintaining site stability and performance and adding new products and features.
This presentation also contains product demonstrations (or reference to such new products), some of which areconceptual and may not be developed or launched in the same form, with all of the same features or at all.
The Company assumes no obligation to update any forward-looking information contained in this Presentation.Any forward-looking statements and projections made by third parties included in this Presentation are notadopted by the Company and the Company is not responsible for such third party statements and projections..
Safe Harbor
eCommerce Simplified
Our 1st Step
eCommerce Simplified
Business gaining Momentum
The unique, out of the box concept of iStreet Bazaar is generating tremendous interest and curiosity amongst customers thereby enticing small entrepreneurs to latch on to the model of iStreet Bazaar leading to growth in Volumes
18,938
5,023
226
14,149
Q4FY15Q3FY15Q2FY15Q1FY15
778
535
63130
Q4FY15Q3FY15Q2FY15Q1FY15
43
16
8
4
Q4FY15Q3FY15Q2FY15Q1FY15
No. of Transactions Sale value (Rs. In Lac)
Network Partners
eCommerce Simplified
13 Stores1st Store
Launched
Jan’14 Feb’14
130 Stores
Jun’14
184 Stores
Sep’14 Oct’ 14
No. of Transactions - 226GMV – Rs. 3.83 lacs
Aug’ 14
*All performance numbers are cumulative in natureGMV stands for Gross Merchandise Value
iStreet Bazaar – Performance*
227 Stores 1,506 Stores
Dec’ 14 Mar’ 15
193 Stores 727 Stores
Store Target - 3,500 to 4,000 Stores by March’16
No. of Transactions– 5,249GMV – Rs. 11.81 lacs
No. of Transactions– 19,398GMV – Rs. 27.41 lacs
No. of Transactions– 38,336GMV – Rs. 70.59 lacs
eCommerce Simplified
Our Journey
eCommerce Simplified
Group Evolution
YEAR 1986-88Incorporated in 1986 and started trading in API & intermediates in 1988
YEAR 1992-94Converted into Public Ltd
company in 1992 and raised funds through IPO in 1994
YEAR 1995Sets up GMP standard API & Intermediate manufacturing
plant in Gujarat
YEAR 1999Promoted India’s 1st Online
Chemical Trading PortalPwC – as a strategic partner
YEAR 2001-08
API & Intermediate business runs into rough weather and company
turns sick; Continues with Job Work
YEAR 2008-09Clears all debts & outstanding
and the company becomes debt-free
YEAR 2012
Comes Out of Financial Sickness & sets up Digital & eCommerce
division; Fully exited API & Intermediate Business
eCommerce Simplified
Digital & eCommerce
YEAR 2014
Selected to present at the Web Summit in
Dublin, Ireland
Launched iStreet BazaarIndia’s 1st internet Retail Store
Set up stores through network partners in Gujarat, Maharashtra & Rajasthan.No of stores - 1,001 as on Jan 31, 2015
Selected as the"Startup of the Year
2014" by Silicon IndiaYEAR 2007
Set up online auctionstores under the "cashin your attic" program
YEAR 2008Evolved the eBay "Trading Assistant" model. Delivered eCommerce to 100s of brands under this model till date
YEAR 2011Pioneered flash sales to ship 4,000-6,000 items a day on eBay
Managed India’s largest online auction for IPL 2011 involving BCCI & Volkswagen
YEAR 2012Created online jewelry configurator and sold loose diamonds online with IDEX India and eBay India
Set up "India Street" - Grocery products shipped from India to across the world
YEAR
2013Company Name changed to “iStreet Network Limited”
eCommerce Simplified
Retail Landscape
eCommerce Simplified
Retail
Modern Retail
Digital Retail
Evolution of Retail
Developed Countries
eCommerce Simplified
Indian Retail
One of the major pillars
13~15% of GDP
Retail in India
eCommerce Simplified
Indian Retail
~US$500bn(Rs. 30 lacs crores)
Retail in India
eCommerce Simplified
Mom & Pops91.6%
Modern Retail8%
eTailing0.4%
Retail in India
eCommerce Simplified
950
520
+82.7%
2018E2013
Re
tail
Mar
ket
Size
(U
SD B
n)
Source – Industry reports
India Retail – an overview
Org
aniz
ed
Re
tail
Pe
ne
trat
ion
20.0%
ChinaIndia
8.0%
Thailand
85.0%
40.0%30.0%
USAIndonesia
6.0%
11.0%3.0%
4.0%
5.0%3.0%
8.0%
60.0%
Re
ven
ue
Sh
are
in R
eta
ilC
ate
gory
Organized Retail
8.0%
Unorganized Retail
92.0%
Food & Grocery - 60%Apparel – 8%, Mobile & Technology 6%Food Service – 5%Con. Electronics – 4%Pharmacy – 3%Jewelery – 3%Others – 11%
eCommerce Simplified
Evolution of Retail - India
India
• Indian Retail Segment - Mom & Pops Stores, which are traditional family owned store, 96% of which is less than 500 sq. Feet
• Modern Retail though expected to be replace mom & pop stores, struggles to expand its share
• eTailing started growing since 2010, currently contributing negligible, though growing at a very fast pace
eCommerce Simplified
Moms and Pop Stores -the King without Crown
Low operational cost
Driven by trust & Quick
response
14 million
stores
Convenient Neighbourhood
Store
14 million Mom and Pop Stores in India are consumers’ most trusted point of buying But ... have limited product offering
eCommerce Simplified
Common Man popular image created by Late Shri R.K. Laxman. The same is used here just as a symbol and is not our property.
Common Man buys from
‘Mom & Pop’ store
Common Man of India
eCommerce Simplified
Common Man popular image created by Late Shri R.K. Laxman. The same is used here just as a symbol and is not our property.
Common Man may be any person living in Urban, Tier 2,Tier 3 cities including Villages & towns
Common Man has aspirations and hopes
Common Man is a follower rather than creator or believer
Is 95% of Population of India who have yet not beentouched by eCommerce in its present & available avatar
Is largely dependent on Mom & Pop stores for its needs
Who is the Common Man of India
eCommerce Simplified
Common Man popular image created by Late Shri R.K. Laxman. The same is used here just as a symbol and is not our property.
Common Man far away from
• Modern Retail• Digital Retail
Adoption of new formats of Retail
eCommerce Simplified
Confluence of Digital Retail & Indian psyche is a mismatch; it needs an innovative and differentiated platform
Does not have internet connectivity
Has Limited access to plastic monies
Prefers human interaction while transacting
Looks for trust factor while transacting on Internet 95
% o
f P
op
ula
tio
n i
n I
nd
ia
i.e.
Co
mm
on
Ma
n
Mom & Pop Consumer
Very low per capita Modern Retail space
Why he has not moved beyond
Mom & Pop
Is E-illiterate
LFR – Perceived as Stores for select FEWs
eCommerce Simplified
A Revolutionary concept
eCommerce Simplified
iStreet Bazaar is an Internet Retail Store
in a neighborhood where a common man can
buy products, ONLINE
(with assistance)
eCommerce Simplified
Modern Retail – large
offering / choice
Mom & Pop –convenient
Stores
Digital Retail –driven by Technology
Changing the Retail landscape of India with a unique India centric approach
eCommerce Simplified
iStreet Bazaar – a Physical Digital
Amalgamation
eCommerce Simplified
Get Quote
Yo ur T ext Go es her e.Down load th is aw esome
d ia g ra m. B r in g y o u rp r e se nta t io n t o l i f e.
Single stop for multiple type
of products
Access to Global and Local Brands
Facilitating Enhanced Shopping
Experience
Competitive Pricing
Safe, Secure & Authentic
Trust with the seller
Hassle free & highly
convenient
Neighborhood Store
Assisted eCommerce
Harmonious convergence of Physical & Digital shopping
iStreet Bazaar - Unique proposition
eCommerce Simplified
The model of iStreet Bazaar is a win-win proposition for all stakeholders
• Low Investment in setting up store
• Branding & Advertising to be undertaken by iStreet Bazaar
• No Inventory Management & Supply Chain Management
• Low Risk & Quick to start
Network Partners
BrandsCustomers
Opportunity to cater to 95% of the untapped population of India
Business with high return on InvestmentAccess to Global & Local Brands
at attractive prices
• Creation of Brand equity via deeper Penetration in Indian market
• Development of Loyal Customer Base
• Quality Products at competitive Pricing
• Wide variety and Choice
• High level of trust and familiarity in transactions
Win-Win for all stakeholders
eCommerce Simplified
Physical-Digital Convergence
Few Examples ..
eCommerce Simplified
IRCTC – Assisted eCommerce
www.irctc.co.in is a Government website usedfor booking tickets for Indian Railways
Portal charges a fee on every ticket bookedthrough the portal
Portal has tied up with various agencies such asYatra and Make my Trip
Recently portal added flight tickets, hotelbookings, car rentals and tourist packagesthrough its site
In FY14 IRCTC sold tickets amounting to grossvalue of Rs. 15,400 cr
www.irctc.co.in is a classic case of assisted eCommerce being used to increasingly penetrate deep in the Indian market thereby increasing ticketing revenue and achieve
faster growth for the gigantic Indian Railways
~24% of overall gross value of tickets purchased isvia agents, assisted eCommerce
Provided immense time saving for passengers due toavoidance of long ticketing queues
Agency model – it got 140,000 outlets and agentsthus creating deeper inroads in to the Indian market
IRCTC outlet in both Rural and Urban India brings~40% volumes with more than 3.0mn transactionsper month
Agency model created to combat internet illiteracyin far flung areas as well as trust issues with users
India examples
eCommerce Simplified
Commonwealth Bank of Australia CBA)
Launched a program to revamp branch network to improve convenience and service levels Project produced an impressive succession of DIGICAL (Digital + Physical) innovations Project Finest Online modernized CBA’s Internet Banking Service and combined it with in person channels
to eliminate all-too-frequent problems such as inability to link personal accounts to commercial accounts Fusion based strategy propelled CBA to the highest customer-satisfaction ranking for retail banks in 2013 CBA’s share price rose 80% from 2006-2014 compared to 9% for S&P/ASX 200 index Competitors taking far longer to emulate the success story of Digical adopted by CBA
Menswear Digital retailer Bonobos Counts it offline offline “experiment” a success. Co-founder and ChiefExecutive Andy Dunn told the New York Times, “We said we would never be offline, and then, wait asecond … we hit a big turning point. We realized offline really works.”
Warby Parker stormed onto the scene in 2010 by selling affordable eyewear exclusively online. Afterbuilding a flourishing e-commerce business, co-founders David Gilboa and Neil Blumenthal decided tobreak into bricks-and-mortar in 2013. With eight storefronts across the country, customer service,interaction and community have helped the brand thrive. As of November 2014, Warby Parker’s bricks-and-mortar stores are now collectively turning a profit, selling an average of $3,000 a square foot annually.
Global examples
Source –Harvard Business Review and Magazine Articles
eCommerce Simplified
Project so far …
eCommerce Simplified
Rathodi Village, Malad (W), Mumbai
Conducted a pilot program in Rathodi Village, Malad (W) inJune, 2012
Rathodi Village in Malad (W) is about 40kms from MumbaiMain and 2kms away from Malad which is a hub for BPO, KPOand large IT companies.
Target – to test the market and gauge common man feedbackon this project
Put up banners of the offer to create a buzz about the wristwatches on sale – sale online
On the day, sold 40 wrist watches online in 5 hours throughlocal neighborhood store to the people of Rathodi. All soldonline. All monies collected in advance and watches deliveredafter 3 days
eCommerce was simplified for Rathodi villagers who were very near to eCommerce & Tech hub in
Malad, yet so far from it.
Common Man of India
eCommerce Simplified
1,506 (as of 31st March, 2015) iStreet Bazaar Stores currently available to ~150mn population
Network Coverage
Maharashtra (Western) 383 Stores
Rajasthan 474 Stores
Gujarat 555 Stores
Chattisgarh & MP 94 Stores
eCommerce Simplified
Existing Category
Pipeline
Mobiles
Computers
Accessories
Home Appliances
Apparels Focus on Men's &
Women wear categories
Fashion & Lifestyle
Include products such as Wallets, Bags, Sunglasses, Wrist Watches
Thousands of products under 11 categories & 55 sub categories & expanding
iStreet Bazaar – Product Portfolio
eCommerce Simplified
International Recognition in Dublin,
Ireland
Received overwhelming response at the Web Summit 2014 held in Dublin, Ireland
eCommerce Simplified
Team
eCommerce Simplified
Pradeep Malu : Founder and Managing Director
• Chartered Accountant by qualification
• An eCommerce professional since late 90’s and has set new rules forbusiness growth using eCommerce
• Conceptualized and executed large number of eCommerce projects inB2C, B2B and C2C space
Lakshya Malu : Co-Founder
• Mechanical Engineer from Boston University, USA
• Worked with Memorial Sloan-Kettering Cancer Research (NYC) andCyber Materials LLC.
• Handled eCommerce projects of TML, ITC, Videocon, SOTC and others
• Conceptualized iStreet Bazaar and did pilots / proof of concept to seehow eCommerce can be simplified for common man of India
Promoter Group
eCommerce Simplified
Bhanwar Singh
Sales & Operations
Navin Rane
Human Resources
Nagalaxmi Charipalli
Branding
Has over 9 years of work experience in Retail & eCommerce industry Responsible for expanding Network, Business Development, Sales & Operations
Has over a decade of expertise managing core HR functions Responsible for building and developing a pool of talented Human Resources
Holds a Masters of Science & Masters of Marketing Management from JBIMS, Mumbai Responsible for marketing & branding activities
Ruchi Seksaria
Company Secretary
Has over 8 years of experience in areas as Corporate affairs, Legal and Governance Responsible for adopting good governance practices at iStreet
Management Team
Rocky Braganza
AVP - Business
Over 19 years of work experience in Electronic Category across Online & Organized Retail MBA in e-Management Marketing he has worked with all stakeholders in Retail segments
eCommerce Simplified
Ratan Jain
Internal Audit
Professional
Qualified Chartered Accountant with over 12 years of experience Oversees and builds System Audits, Internal Audits, Management Audit besides setting up
processes and documents for Finance Department
Shriram Shrikrishna
Manager Category
Development
Over 12 years of experience in Retail & Marketing experience with leading retailers Responsible for sourcing New Vendors, Vendor Development & Product Portfolio
Management Team
Kapil Dubey
Manager Category
Development
Over 8 years of experience in Retail Management, SCM & Business Development Responsible for Category Development from conception to maturity stage
eCommerce Simplified
Financials
eCommerce Simplified
Pharmaceutical & Int. business thru Job Work
Sale of underperforming assets of Pharmaceutical & Intermediate business in FY15
Particulars (Rs. Lacs) Mar-15 Mar-14 Mar-13 Mar-12
Total Revenue 94.9 74.1 51.7 19.7
Pharmaceuticals --- 13.9 20.6 19.7
Digital & eCommerce 94.9 60.2 31.1 ----
Total Expenses 398.5 55.7 24.0 11.6
Raw Material Expenses 67.7 37.9 10.7 -
Employee Benefit Expenses 72.9 7.1 6.8 1.5
Other Expenses 257.9 10.7 6.5 10.1
EBITDA -303.6 18.4 27.7 8.2
Depreciation 14.3 8.4 11.2 10.2
Exceptional Items 260.1 16.5 1.8 4.8
Profit before Tax -57.3 -6.4 14.8 -6.9
Tax - - - -
Profit after Tax -57.3 -6.4 14.8 -6.9
Profit & Loss
Digital & eCommerce business Revenue • Up to FY14 - 3rd party Platform sales ; • FY 15 – iStreet Bazaar Project Revenue started building
eCommerce Simplified
Particulars (Rs. Lacs) Mar-15 Mar-14 Mar-13 Mar-12Shareholders Funds 491.8 466.4 472.8 98.0
Share Capital 801.0 795.0 795.0 435.0
Reserve & Surplus -363.1 -328.6 -322.2 -337.0
Money Received against warrants 53.9 - - -
Current Liabilities 90.0 49.8 30.4 35.0
Trade Payables 14.4 1.4 0.2 0.0
Other Current Liabilities 75.6 48.4 30.2 35.0
Total 581.8 516.2 503.2 133.0
Non Current Assets 83.0 122.7 93.7 116.0
Fixed Assets 53.8 119.5 90.5 101.6
Non Current Investments 0.7 1.2 1.2 1.2
Long Term Loans & Advances 28.5 2.0 2.0 13.2
Current Assets 498.8 393.5 409.5 17.0
Current Investments 100.9
Inventories 14.9 0.0 0.0 0.0
Trade Receivables 1.9 0.2 0.2 0.1
Cash & Bank Balances 19.8 2.5 1.2 8.5
Short Term Loans & Advances 165.4 153.5 398.1 0.5
Other Current Assets 196.0 237.4 10.0 7.9
Total 581.8 516.2 503.2 133.0
Balance Sheet
eCommerce Simplified
Future Outlook
FY16E FY17E
Project Launched Jan-14
Population covered 35 - 40 crore 80 - 100 crore
Geographical coverage (may change depending upon various parameters)
Vidarbha Maharashtra, Andhra Pradesh,
Karnataka, Kerala, Punjab, Himachal
Pradesh
Rest of India
Stores 3,500 – 4,000 8,000-10,000
No. of Fulfillment Centre 4 ~ 5 9 ~ 10
Expected Matured number of stores 30% of previous close 50% of previous close
Expected Average business per Matured store p.a.
20 lacs 40 lacsInitiatives Mobile commerce
Specialized Store C 2 C commerce
DIY Stores
eCommerce Simplified
Company : Investor Relations Advisors :
iStreet Network Ltd. CIN - L51900MH1986PLC040232Mrs. Ruchi Seksaria, Company Secretaryruchi@istreetnetwork.comwww.istreetnetwork.com
Strategic Growth Advisors Pvt. Ltd.CIN - U74140MH2010PTC204285Mr. Shogun Jain/Mr. Kevin Shahjshogun@sgapl.net / skevin@sgapl.netwww.sgapl.net
For further information, please contact
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