: ONLINE TO OMNICHANNEL?

COMPANY BACKGROUND Yepme - Online retailing of men’s and women's garments and accessories Estd. in April 2011 Headquartered in Gurgaon Fully-fledged private label fashion brand

FOUNDERS Three alumni of IIT and IIM Anand Jadhav (President) - Shoppers’ Stop, Globus, Pantaloons and

Reliance Trends. Vivek Gaur (CEO) - Bagittoday.com, HT Media Ltd, Living Media Pvt Ltd &

HUL Sandeep Sharma (COO & CTO) - Accenture, Sapient, SBI Capital Markets

and HCL Technologies

NEW STRATEGY – OFFLINE MODE Entry into the brick and mortar retail channel in 2016 First store in DT City Centre in Gurgaon 4 retail stores in Gurgaon and 1 franchise store in Hyderabad Vision of opening 400 Yepme stores by the end of 2016 two formats: Retail stores and Distribution

WHY ? To scale up its revenues Industry has high margins Valuations

99%

1%

Retail Sales in Billion Dollars($818billion)

Total Retail Sales Ecommerce sales

EXISTING MODEL

A• Third Party• Own manufacturing (Bags and belts)

B• Online (Own app and site)• Other online marketplaces

C • Third party logistics (Own warehouse)

TARGET SEGMENT : TIER 2/3 CITIES

WHERE DO WE SELL? APP Website Ecommerce websites Retailers Owned stores Franchise stores

ECOMMERCE GROWTH : PROJECTION

55% 45% 27%

WHAT DID THE COMPANY DECIDE?

To grow Offline COCO stores

FOFO storesRETAIL DISTRIBUTION

COCO

RVP PRICE : HIGH SELECTION : HIGH EXPERIENCE : MEDIUM CONVINIENCE : HIGH

PRICE: MEDIUM SELECTION: MEDIUM EXPERIENCE: HIGH CONVINENCE: MEDIUM

YEPME KOOVS

Company owned company operated 4 stores Acted as a testing ground for the store model 3 month sales encouraged the management to go ahead with expansion Gave way for the franchise model costs and sales estimates

RISKS FOR FRANCHISE Franchisee fee Renewal fee Inventory risk Logistics No flexibility in deciding

stock

No franchise fee No renewal fee Stock on SOR (Sell of Return) The logistics by the company It would also provide the

customer data regarding the customer tastes and preferences in that particular area. This would help the franchise in deciding on what stock to keep.

It would also make sure that the prices in stores are same as online

FOFO Franchise owned franchise operated. WHY?http://www.yepme.com/franchisee.htmlLeads follow up

NUMBERS Minimum store size : 800-1200sqft Optimum stock : INR 625/sqft Avg investment : 10-15 lakh Fixture costs : INR 1800/sqft Avg sales : 1000-1500/sqft Margin on sales : 30% Local marketing cost to be incurred by the franchise ROI : 11-15 months

FRANCHISE MODEL

Apparel costRent etcFixed cost

COSTING

PROFIT CALCULATION Online : 50% flat margin on Minimum selling price. Offline : 20% margin on Minimum selling price.Target: 1:10 sales 1 online : 10 offlineIf we take a conservative measure of 1:3 sales only, we still end up making more profit offline than online due to MORE VOLUMES.

PROFIT CURVE

CASE FOR WATCHES Why distribution? Third largest selling category online. Only .7-1% sales in existing stores. Distribution to watch retail stores made sense. Chrono and analog digital watches only.

WATCH MARKET RESEARCH METREICS ASP (Average Selling Price) Brands (competitors) Service Retail margins Online sale Schemes

WATCH MARKET RESEARCH RESULTS Average Selling Price (ASP): Ranged from 1000 to 1500INR for analog

digital and 3000 onwards for chronograph. The major competitors in that range are Sonata and Maxima Service is done mainly at the retail end with Titan offering their service

centers too at certain locations. Margins for retailers ranged from 15-20% Most shop owners were not selling online Company end schemes were target based with incentives and foreign trips. The promotional material was by the company like branded counters,

posters, banners and rotating containers for watches.

DECISION Launch watches in retail distribution Today yepme watches are at 1500 retail stores Video

RESULTS 21 operational stores in India http://www.yepme.com/Store.aspx

REFERENCES http://dazeinfo.com/2015/01/07/retail-ecommerce-sales-in-india-growth-201

4-2018-report/ Article titled ‘Retail Ecommerce Sales In India 2014 – 2018: Disappointing 1% Of Total Retail Sales’

http://yourstory.com/2016/04/online-offline-game-indian-retail-landscape/ Article titled ‘Online or offline, which will win the game in the Indian retail landscape?’

http://www.emarketer.com/Article/India-Ecommerce-Takes-Tiny-Share-of-Retail-Sales/1011794 Article titled ‘In India, Ecommerce Takes Tiny Share of Retail Sales’

THANK YOU