Download - Subscription e-Commerce - Principia SGR
e-Commerce B2C – the new trendse-Commerce B2C – the new trendsSubscription commerce, is it the next big wave?
Principia Open Office – March 2012
� Principia is the leading Italian Venture Capital firm focusing on the ICT industry..
� Principia has 90 millions(€) under management (part deriving from the government and part from privates) divided into two funds.
� The new management company has used the second fund to invest in 8 companies over the last 8 months.
Team
Principia SGR
Team� Michele Costabile (CEO), Research Assistant at Harvard University and Professor at BocconiUniversity
� Andrea Di Camillo (Managing Partner), experienced European VC (Kiwi I and CIR Ventures), co-founder of Banzai Group and Vitaminc, Advisor of Yoox and Venere
� Marco Magnocavallo (Venture Partner), serial enterpreneur (Blogo, Maki, Communicate! and Livesupport ) and angel investor (Webmynd, NextDigest, NoiseToys, Fubles, Pusher and Iubenda)
� Rita Polarolo (Fund Manager) experience in other Italian VC firms (TTVenture, Innogest)
� Massimiliano Cerilli (Fund Manager) experience in Private Equity at BNP Paribas Group.
� Matteo Panfilo (Investment Analyst), M.Sc on B&A and past experience on KPMG.Matteo Panfilo (Investment Analyst), M.Sc on B&A and past experience on KPMG.
� Armando Golia (Investment Analyst), M.Sc on General Management and startup co-founder.
Portfolio:
Principia SGR Open Office - e-Commerce B2C, the new trendCopyright 2012 Principia SGR, All rights reserved
General overview US
22,2% Growth Rate (’09 vs.’10)9,23% CAGR (‘06-’10)
US - eCommerce Sales (€ Bln)
9,23% CAGR (‘06-’10)
Principia SGR Open Office - e-Commerce B2C, the new trendCopyright 2012 Principia SGR, All rights reserved
Source: 1.Forrester 2. CB Insights data
General overview Italy
Italy - eCommerce Sales (€ Bln)
news & music
3%
Purchase categories
+17% ‘09-’10+20% ’10-’11
apparel
10%
other
18%
insurance
9%
tourism
49%
+20% ’10-’11
Source : 1.MIP, 2. Casaleggio associati, 3. MIP e Netcomm
9%
grocery
1%IT &
electronics
10%
Principia SGR Open Office - e-Commerce B2C, the new trendCopyright 2012 Principia SGR, All rights reserved
General overview Italy, the opportunities
Apparel 20% 5% 0,8%
News & music 39% 15% 6%
USA EU Italia
News & music 39% 15% 6%
Grocery 2% 1% 0,1%
IT & electronic goods 42% 37% 5%
Tourism 27% 25% 13%
Italian excellence:
Source : 1. MIP, Forrester Research & eMarketer
Design
Fashion
Art
FoodWine
Principia SGR Open Office - e-Commerce B2C, the new trendCopyright 2012 Principia SGR, All rights reserved
The new eCommerce trends
o Mass customization (NikeID, Zazzle e CafèPress)
o Collaborative consumption (Rent the Runway o Bag Borrow or Steal)Steal)
� Subscription e-commerce
Monthly subscription for a selected kind of product which is then sent directly at home.
“directly at home.The selection of products is based on extremely deep profiling of customers made by 10-15 initial questions and the selection of the curator.
By 2015, 35% of Global 2000 companies with non-media digital products will generate incremental revenue of 5% to 10% through subscription-based services and revenue models. ”Gartner
Principia SGR Open Office - e-Commerce B2C, the new trendCopyright 2012 Principia SGR, All rights reserved
Subscription eCommerce, key players
At scale
FemaleMale
Beta or New
Source : seanpercival.com data
Principia SGR Open Office - e-Commerce B2C, the new trendCopyright 2012 Principia SGR, All rights reserved
Subscription eCommerce, key players (Europe)
Europe
Male Female
Rest of the world
Principia SGR Open Office - e-Commerce B2C, the new trendCopyright 2012 Principia SGR, All rights reserved
Subscription eCommerce, key players (segments)
Curated
Male Female
Standard
Principia SGR Open Office - e-Commerce B2C, the new trendCopyright 2012 Principia SGR, All rights reserved
Subscription eCommerce, US investment trend
$ Mln N. deals
Company Location Investors
BeachMint Santa Monica, CA NEA, Trinity Ventures, Lightbank
H. Bloom New York, NY Battery Ventures, Thomas Lehrman
ShoeDazzle Santa Monica, CA LightSpeed, Polaris, Andreesen Horowitz
BrichBox New York, NY Accel Partners, First Round Capital
Relevant operations:
Source : CB Insights
Principia SGR Open Office - e-Commerce B2C, the new trendCopyright 2012 Principia SGR, All rights reserved
Example of Metrics (Fashion and Apparel)
Unique visitors
Registered users
CPC (€)
Subscribers
20-28%
2-3% 0.4%-0.85%
CPC (€)
0,3 0,4 0,5 0,6
CR* %
0,40% 75 100 125 150
0,55% 55 73 91 109
0,70% 43 57 71 86
0,85% 35 47 59 71
* Conversion Rate form unique visitors to subscribers
Principia SGR Open Office - e-Commerce B2C, the new trendCopyright 2012 Principia SGR, All rights reserved
�StartupThreads (startup merchandising)
The evolution..
�StartupThreads (startup merchandising)
� EcoEmi (green multi-products)
� Ybuy (electronic goods with 30-day trial)
� Little Black Bag (black box with the possibility of exchanging the � Little Black Bag (black box with the possibility of exchanging the content with other users)
Principia SGR Open Office - e-Commerce B2C, the new trendCopyright 2012 Principia SGR, All rights reserved
� Efficient net working capital management, reduced cash
requirements for the short term.
Main advantages
requirements for the short term.
�Greater subscription sales predictability.
�Recurring revenues.
� Efficient inventory management due to fast rotation and low stock
level.
�Higher average Lifetime Value per customer, due to recurring �Higher average Lifetime Value per customer, due to recurring
purchases.
�Higher retention rates, are associated with
the subscription mechanism.
Principia SGR Open Office - e-Commerce B2C, the new trendCopyright 2012 Principia SGR, All rights reserved
� Large capital requirements for acquiring customers and starting
the business.
Critical points
the business.
�More challenging customer engagement because of the increased
financial commitment of subscription.
� Need for deep profiling of customers and tastes that are necessary
for inventory management and logistics.
� Requirement for“Try&buy”””” that is difficult to manage in terms of stocking
and logistics.
� High product specialization and curation for unique products not
easily found in traditional e-commerce settings
Principia SGR Open Office - e-Commerce B2C, the new trendCopyright 2012 Principia SGR, All rights reserved