GROWTH IN CONSUMER CONSUMPTION

Consumption will grow 4x over 2005 – 2025. Urban India will account for more than two-thirds of this growth as urban household income will grow 3.3x over the same period.

Aggregate annual consumption(Bln, Indian rupees, 2000)

10

10,00020,00030,00040,00050,00060,00070,00080,000

All India consumption

2005

Rural consumption

growth

Urban consumption

growth

All Indiaconsumption

2025

18,896 16,695

35,913

71,504

Source: MGI India Consumer Demand Model, v1.0

10

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

1985 1995 2005E 2015F 2025F

65,41686,351

115,620

208,406

378,170

2.9%

6.1%

GROWTH IN CONSUMER CONSUMPTION

Consumption will grow 4x over 2005 – 2025. Urban India will account for more than two-thirds of this growth as urban household income will grow 3.3x over the same period.

Aggregate consumption per Urban Household(Indian rupees, 2000)

Source: MGI India Consumer Demand Model, v1.0

BangaloreHyderabad, Mumbai KolkataDelhiChennaiAhmadabadPune

SuratKanpurNagpurLucknowJaipurKochiVadodaraIndore

TiruchirapalliAmritsarFaridabadAurangabadAllahabad GwaliorJodhpurRaipurBhubaneswar

RohtakRurkelaUdaipurAnandFaizabadHassanShimlaRoorkeeShillong

* Population for each city estimated using the average urban household sizeSource: The Great Indian Middle Class, NCAER; MGI India Consumer Demand Model (v1.0); MGI analysis

LudhianaMaduraiBhopalPatnaNasik, AgraVaranasiRajkot

8 citiesPopulation > 4 million

Tier 1Major cities

26 citiesPopulation > 1 million

Tier 2Mainstream cities

33 citiesPopulation > 500,000

Tier 3Climbers

33 cities5,094 towns

Tier 4Large towns

URBAN CLASSIFICATION AND FOCUS OF ORGANIZED RETAIL

Urban areas are classified into four types depending on population. Traditionally, organized retail chains focus on tier 1, 2 and tier 3 (limited). There is a clear gap when it comes to Tier 4 cities.

Tier4Large towns

Tier3Climbers

Tier2Mainstream cities

Tier1Major cities

27

5

8(15%)

16(29%)

Tier4Large towns

Tier3Climbers

Tier2Mainstream cities

Tier1Major cities

114

136

129

186

Tier4Large towns

Tier3Climbers

Tier2Mainstream cities

Tier1Major cities

3,009 (39%)

670 (9%)

1,064 (14%)

3,034 (39%)

Note: Disposable Income estimated using income distribution of households from NCAER and model estimates of average household income; Figures are rounded to the nearest integer and may not add up to 100% Source: The Great Indian Middle Class, NCAER; MGI India Consumer Demand Model, v1.0; MGI analysis

40% of total disposable income is generated in Tier 4 cities

Total Households(million, (share))

Average income per household(1000, Indian Rupees)

Total disposable income(Bin, Indian Rupees (share))

POTENTIAL IN TIER 4 CITIES

This leaves a huge unmet demand in serving the needs of affluent customers in smaller towns.

SUMMARY OF OPPORTUNITY

Existing ‘mom-and-pop’ stores are not able to meet the demands of affluent customers in towns.

Organized retail chains are yet to penetrate these towns. Ecommerce is not yet a viable channel given that customers are not tech savvy,

psychological barriers and limited infrastructure.

The key focus of FabMart by MRPL is to address the needs of affluent customers in Tier 3 and 4 cities.

FABMART – TARGET SEGMENT

Focus of FabMart by MRPL

Deprived

Aspirers

Seekers

Strivers

Globals

Tier 1 Tier 2 Tier 3 Tier 4

• Product availability – A wide range of products and services should be available.

• Convenience – The process of shopping should be convenient and fun.

• Confidence – Customer should trust the seller and the brand.

• Operational control – A high quality of customer experience needs to be ensured with a tightly managed service delivery model.

• Lean & scalable model – Since volumes will be low in any given town, the model should be lean but highly scalable.

1

2

3

4

5

Key success factors to serve affluent customers in towns

FabMart by MRPL by MRPL

Organized retail

COMPETITIVE ANALYSIS

• The typical mom-and-pop store serving customers in the town

• Large format retail stores that are occasionally seen in some tier 3/4 towns

• E-commerce chains such as Flipkart, Myntra etc.

• Customers going to the nearest city to buy goods that are not normally available

Comments

Value proposition to the customer

Comparative Threat

Pros:• Convenience• Trust• Instant

gratification

Cons:• Limited variety• May not be

the best deals

Pros:• Variety and good deals

Cons:• Various links in the

value chain (from a small

town point of view) are not yet mature i.e. Technology, Logistics, Payments etc.,

• Trust deficit• Familiarity with online

shopping required• No touch-and-feel

experience

Pros:• All the benefits

of a typical LFR store

Cons:• Involves prior

planning and travel• Returns are not

possible if the city is located at a distance

• Low-Medium • Low • Low-Medium • High

Pros:• Convenience• Trust• Instant gratification• Variety and deals

Cons:• Is not present in most

of the target towns

Mom & Pop stores Large format retailE-commerce

Shopping from adjacent cities

In the target towns

ABOUT FABMART BY MRPL

FabMart by MRPL aims to simplify shopping for customers in smaller towns in India while offering them an unmatched online shopping experience. We are the only company in India that is exclusively focused on catering to customers in small towns by bringing in a wide range of products offered by a multitude of brands.

We want to combine our industry expertise, technology know how to offer our customer in towns two things: Fastest and best e-commerce experience, and Timely delivery in the towns.

The Team

Alphonse Reddy Founder & CEO, 12 years industry experience spanning sales, marketing, strategy and finance. BE (BITS, Pilani) and MBA (INSEAD Business School)

Investors/Advisory Team

Hemu Javeri Executive Director, Forum Synergies, a $150m PE fund. Previously CEO of Madura Garments, Nike and Home Solutions.

Anand Morzaria CEO of Pennywise Solutions. MSc Finance (BITS, Pilani)

Ashish Agarwal Investment Director, Navis Capital, a $3b PE fund. MBA (INSEAD Business School)