localbanya.comrajat @localbanyaprateek @localbanyasaurabh @localbanya

Source : Booz and Company

Team of LocalBaniya.com(Launched in 2012) Amit Naik (CEO) MBA

from IIM Lucknow Rashi Choudhary

(COO) MBA from SP Jain Singapore

Karan Mehrotra (CFO) Engineer from IIT

History of LocalBaniya.comPersonal experience with not having enough time to go out and do grocery shopping after a long day of work.

Too tired to deal with going to the store to pick up groceries, waiting in long lines and dealing with the journey involved.

The traditional Banya would most likely be shut or be out of stock of what we needed.

Increased the base to Thane and Navi Mumbai very recently

Facts about LocalBaniya.com Over 10,000 registered users, Average 400 orders per day

Sales in FY 2013, Q1 of Rs. 1 cr

Avg Cart Size now exceeds Rs 1500

Typical Customer is a working professional of age band 25-40 years

Undisclosed investment by BCCL’s Springboard fund, and recently, a Series A funding from real estate developer Karmvir Avant Group

36,800+ FB likes

Team size of over 80

Launched Print/Digital Media campaigns as of July 2013 on prestigious media publications

Over 10,000 Skus.

Over Rs 10 million in monthly revenues

Distributor Broker Model Value Proposition : Providing high quality products without wasting customer’s time or energy .

Revenue Model : Transactional

Pricing Strategy : Variable Discounts, markup pricing

Target Market : End Customers

Sustainability Strategy : On time, efficient and hassle free delivery of high quality products to customers.

Expansion in other cities to achieve economies of scale.

Inventory and Supply Chain Low Inventory Model used existing warehouse for FMCG non perishable items

Tie-ups with wholesalers and cash-and-carry partners for perishable items

Tie-ups with retailers for unreachable and distant places

Tie-ups with niche stores Breadkraft, Bagelwala and Shor Sharaba

Some delivery vehicles outsourced

Company employees for packaging, processing and delivery - On time delivery is 97%

Karan has a family business which included distribution for Hindustan Lever and catering services to BPOs which they leveraged for localbaniya.com also

Marketing StrategyOffer discounts to acquire customers

Customer Relationship well managed under dedicated team led by founding member

Mobile advertising on company vehicles

Print Ads on Mumbai based Newspapers like Economic Times

Started off the business in the most busy city of Mumbai

Order over website and Facebook

Swot Analysis for LocalBaniya•Increasing Customer Base•Strong Distribution networks and expertise•User friendly website.•Ontime delivery rate 97%•Only 2-3% is returned. (No questions asked returns policy)

Strength Weakness

• Easy replicable by distributor/ wholesellers• Less Profit Margin

Opportunity Threats

•Business Expansion in other Tier I cities•Improve customer and Merchant Relationship•Tie ups with more retailers for better distribution.

•New Entrants•Intense competition from traditional retailers•Maintaining repeat customers•May not find investors to fund operations anymore.

Porter’s Five Forces

1. Threat of New Entrants: • Distributor relationships hard

to establish• Supply Chain difficulties• Distributor “Areas”

2. Buyer’s Bargaining Power:• Switching costs are near zero or

psychological.

3. Supplier’s Bargaining Power:• Depends on the size of the

distributor.

4. Threat of Substitutes:• Mom ‘n’ pop stores, Big Bazar

5. Interfirm Rivalary• Since there are no e-grocery

stores yet, there is little industry rivalary

Rivalary New Entrants

Buyer’s Bargaining

Power

Supplier’s Bargaining

Power

Substitutions

1. Medium

2. High

3. Medium

4. Very High 5. Low

asdf

Business DynamicsComplementary Assets:

• Warehouses• Logistics equipment, like

delivery vans, fork lifts• Distribution Relationships

and expertise.• IMPORTANT

Imitability:• Any Distributor may start

up a website, only technical knowledge required.

• HIGH

Difficult to make money

Holder of Complementary Assets

Inventor Makes Money

Party with both technology and assets or with bargaining power makes money

Im

it

ab

il

it

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wH

igh

C o m p l e m e n t a r y A s s e t s

Freely Available/ Unimportant Important

Key ChallengesMargins as low as 2%

Supply Chain hard to replicate

Many Items are perishable

Scaling up is difficult

Competetion from Big Retail

Key Challen

ges

Achieving Scalabilit

y

Building Customer Base

Supply Chain

Stiff Compet

etion

Thin Margins

Comparison with other playersBigBasket.com

In December 2011, V S Sudhakar, Hari Menon, Vipul Parekh and V S Ramesh launched BigBasket in Bangalore

AaramShop.com

Vijay Singh founded AaramShop in 2011. Originally serving 162 local shops in Delhi

Value Addition by LocalBaniya.com

Value Addition by LocalBaniya.com

Value Addition by LocalBaniya.com

Recommendations Start in-house brands which will give more margins

Do not highlight discounts for premium products . Eg – Diet Soya

Social media advertising for Mumbai based social communities. Currently very low presence on social media

Tie-Ups with distributors & wholesalers in other cities

Tie ups with retailers to check inventory of product in proximity, instead of sending from warehouse.

Make an app, have hoardings with barcodes for products all over the monorail premises. Eg: Tesco in Korea.

Future Expansion:◦ Pune (Aundh, Baner)◦ Kolkata (Salt Lake, Ballygunj)◦ Gurgaon (Except Old Gurgaon )◦ Noida, Greater Noida ◦ South Delhi

THANK YOU