Become Indra’s Advisor Contest (BIAC-8)Phase -2 Submission

The Gazab Ghaziabadi, IMT Ghaziabad

2

• E Commerce Industry insights

• Engage

• Channel Strategy

• Phase Wise Model• Partnerships

• Monitoring Performance

Agenda

SituationAnalysis

Objective

SWOT analysisStrategy

Tactics and Action Plan

Control

• E Commerce Industry insights

• Engage

• Channel Strategy

• Phase Wise Model• Partnerships

• Monitoring Performance

• Cost Benefit Analysis

FlipkartCreativity

AaramShop.com

AccessibleFun

HeritageRevenue

Amazon

Tropicana

• Consumer Insights

• Product Strategy

• Volume • Growth

Grocery

your Passion

3

• With sales at Rs. 12.6 Billion for 2014, an expected CAGR of 30% against 13%CAGR of traditional retail for the next 4 years, E-Commerce is the “next bigthing” in Indian retail

• E-tailing or selling of FMCG products online, has limited presence primarilythrough nascent players, a huge potential lies online

• With sales at Rs. 12.6 Billion for 2014, an expected CAGR of 30% against 13%CAGR of traditional retail for the next 4 years, E-Commerce is the “next bigthing” in Indian retail

Situation Analysis E-Commerce is becoming bigger by the day

Retail Market* – Rs. 25K Billion

Organized Retail- Rs. 1.7K Billion

Online Retail – Rs. 630 Billion

Online FMCG Market – Rs. 1.4

Billion

Pepsi E-Commerce: ?

#EY Rebirth of E-Com in India, http://www.ey.com/Publication/...*CRISIL Opinion, Feb 2014 http://www.crisil.com/pdf/research/...

Factors Driving E-Commerce Growth in India#

Increase in internet users

Increase in Mobile devices

More Women Shoppers

Rise in Time spent online

Increase in Discretionary Spend

Multiple Payment Methods

Increase in Transaction

ValueDiscounts

• E-tailing or selling of FMCG products online, has limited presence primarilythrough nascent players, a huge potential lies online

4

Situation Analysis

58% of survey respondents would definitely try buying PepsiCo products online

58%

30%

12%

0%

10%

20%

30%

40%

50%

60%

70%

Would you try buying PepsiCo products (Pepsi, Mt. Dew, Tropicana, Lay’s) online?*

Definitely Depends on the Price/Offer No

Opportunities in E-Commerce for PepsiCo

Frequent Purchasers,

Bulk consumers

Build loyalties among the

digital savvy

Opportunity at Long tail

High ticket sizeNew Products

buzz generation

Challenges PepsiCo faces on the E-Commerce front

Moving low Involvement,

impulse products

Restrictions on FDI in e-

commerce

High Cost of Last mile Delivery

Competition from QSRs

Need to Develop

capabilities and scale

*Source: Consumer Survey

5

Demographic & Behavioral Segmentation Psychographic Segmentation of Online Customer

Situation Analysis Understanding the Pepsi e-Customer

Demographic & Behavioral Segmentation

Consumer Drivers of Online Shopping

Convenience Price Fun Variety

Too busyStylish

Professionals

ConformistsShopping’s Fun

• Interacts with brands• Looks for discounts

Brand OrientationIndifferent Conscious

Self

Co

nfi

den

ce

Psychographic Segmentation of Online Customer

Low

Shopping ExperienceBoring Fun

Style ConsciousnessWhat’s Right What’s new

High

16 – 40 year old Male/Female Single or Married with children

Comfortable purchasing online Aware of PepsiCo brands

Opportunity to deeply interact with brands and offering price discounts would better serve customers

A target in Volumes and Branding would buildRevenues and Loyalty for PepsiCo

Objective

7

Engage

• Online Engagement and Interaction with 10 Lakh people

Volumes

• Serving 30,000 customers, achieving Operational Revenue of Rs. 88 Lakhs

Growth

• Maintaining Above Industry Growth Rate of 30%

ObjectivesPepsi on the E-Commerce - The objective is to drive both, Engagements and Volumes

8

CityNo of Internet

Users*E-Commerce

Visitors MonthFMCG Visitors per

monthPepsi visitors per

monthYearly Website

VisitorsPepsi Buyers

(yearly)Value of Sale

60% of Internet Users1.4% of E-Commerce

Visitors25% of FMCG Visitors X 12

At 2.7% Conversion Rate

Minimum Order Value Rs. 300

Mumbai 12,000,000 7,200,000 100,800 25,200 302,400 8,165 ₹ 2,449,440.00

Delhi 8,100,000 4,860,000 68,040 17,010 204,120 5,511 ₹ 1,653,372.00

Hyderabad 4,700,000 2,820,000 39,480 9,870 118,440 3,198 ₹ 959,364.00

Chennai 4,500,000 2,700,000 37,800 9,450 113,400 3,062 ₹ 918,540.00

Kolkata 4,400,000 2,640,000 36,960 9,240 110,880 2,994 ₹ 898,128.00

Bangalore 3,800,000 2,280,000 31,920 7,980 95,760 2,586 ₹ 775,656.00

Ahmedabad 2,800,000 1,680,000 23,520 5,880 70,560 1,905 ₹ 571,536.00

Pune 2,700,000 1,620,000 22,680 5,670 68,040 1,837 ₹ 551,124.00

Total 43,000,000 25,800,000 361,200 90,300 1,083,600 29,257 ₹ 87,77,160.00

ObjectivesThe market potential is valued at Rs. 8.8 Million for the top 8 cities in Year 1

*Source: IAMAI 2013 Data

YEAR 1

8 Cities 10 Lakh Engagements

30,000 Customers Served Revenue Rs. 8.8 Million

http://www.slideshare.net/AccelIndiaVC/...

1. Product Strategy– Bundling – Cross Selling– Upselling

2. Channel Strategy: To attain• The target of Rs. 88 Lakhs• Growth rate of 30% • Maximize engagement

… in Year 1, all 4 models need to be leveraged

Strategy

10

Frozen Dessert, 4%Fine Dining, 4% Cafés, 12% Casual Dining, 32% Quick Serve, 44%

Share of Food Services Industry by Place of Consumption*Frozen Dessert, 4%

Fine Dining, 4%

Cafés, 12%Casual Dining, 32% Quick Serve, 44%

Share of Food Services Industry by Place of Consumption*

Home

Target Home Consumption

Currently, Pepsico brands are consumed/bought with different

combinations of food/ groceries/restaurants Food

70% of OOH Snacks consumption takes place in FSRs and QSRs.

This consumption is done atBut, on E Commerce,

Consumption will occur at

Tropicana

CSD

Oats

Snacks

Aquafina

Grocery

Restaurants Food

Ready To Eat Food

PEPSICO

COMPLEMENTARY FOOD

OOH

Strategy Targeting Home Consumption through the e-commerce channel

11

In House Brand Cross Selling Strategy

In House Brand Cross Selling Strategy

In-Home Consumption

OOH Consumption

Time of the day and products consumed

< 100, 8%

< 250, 14%

< 300, 19%

< 350, 26%< 400, 24%

More than 4000

0%

20%

40%

IN INR

What is likely to be your Total Order value from Pepsi E-Commerce?

< 100 < 250

• Majority of PepsiCo Products have

been categorized under

“Anywhere Consumed Products”

• Quaker Oats, Gatorade and

Tropicana are consumed at

specific location

To Target Home Consumption:

• Move Bulk Volumes of CSDs and

Snacks (Order Value: 300)

• Cross Sell PepsiCo products with

other in-house products

• Cross sell Beverages with other

groceries and ready-to-eat food

What are you likely to purchase together online from the following list?

Products GroceryRestaurant

FoodConsumerDurables

Ready to Eat Food

Tropicana 61% 23% 5% 17%

CSD 69% 78% 12% 75%

Oats 56% 8% 10% 55%

Snacks 65% 26% 15% 45%

Aquafina 10% 78% 13% 34%

Key Points

Test Cross

In House Brand Cross Selling Strategy

Cross Selling Strategy

Strategy Cross Selling Strategy in Home Consumption

*Source: Consumer Survey

12

CSD

Snacks

Quaker Oats

Strategy PepsiCo In-house cross-selling Opportunity

0

2

4

6

8

10

0 2 4 6 8 10

Cu

sto

me

r W

illin

gne

ss

Makes a Meal

Chips

Puffed Snack

Health Drink

Flavored CSD

Breakfast Food

Sports Drink

0

2

4

6

8

10

0 2 4 6 8 10

Cu

sto

me

r W

illin

gne

ss

Makes a Meal

Sports Drink

Health Drink

Flavored CSD Chips

CSDPuffed Snack

Respondents consuming Snacks feels that CSDs complements their meal

Quaker consuming Respondents felt Health drink/Sports Drink as part of their meal is suitable for their healthy diet

0

2

4

6

8

10

0 2 4 6 8 10

Cu

sto

me

r W

illin

gne

ss

Makes a Meal

Health Drink

CSD

Breakfast Food

Sport Drink

Flavored CSD

ChipsPuffed Snack

1

2

3

Quaker consuming Respondents felt Health drink/Sports Drink as part of their meal is suitable for their healthy diet

Respondents consuming Snacks feels that CSDs complements their meal

Respondents consuming CSD preferred purchasing Chips and Puffed snacks

Respondents* consuming CSD preferred purchasing Chips and Puffed snacks

CSD

Snacks

Quaker Oats

*Source: Consumer Survey

13

StrategyCross Sell Potential Score (CSPS) indicates the potential to sell pairs or groups of PepsiCo products online

CSD

0.7

Snacks Breakfast food

2.6

0.3

2.0

0.1

1.5

1.3

0.2

0.7

1.0

6.6

5.0

4.0

3.7

3.3

6.7

5.7

6.7

0.3

CSPS: FM*WOC*Cluster Size

Potential to cross sellproducts in PepsiCo portfolio

Calculation of CSPS

• Form a Meal: Low: 2 High: 10

• Willingness of Consumer: Scale 0 to 10

• Number of Customers in cluster: 0 to

200 customers

(Number in the circle represents score out of

10)

CSD Snacks Breakfast food

14

Impulse Purchased Products Planned Purchased Products

Brand Preferred SKU

600 ml X 6, 2L X 3

180 g X 4, 67g X 6

180g X 4, 67g X 6

Rs 20 Pack bundled

Brand Preferred SKU

600 ml X 6, 2 L X 3

600 ml X 6, 2 L X 3

500 ml X 6, 1.2 L X 3

600 ml X 6, 2L X 3

StrategyProducts, often impulsively bought, will be sold as larger packs to drive frequent consumption

Impulse Purchased Products: Bundling and bulk delivery is preferred by the consumers (Consumed during an occasion such as a party)Planned Purchase Products: Planned purchased products are often consumed indoors

Consumer Insight: Purchases for Home Consumption

Brand Preferred SKU

600 g, 1 Kg

1L X 3, 200ml X 12

1L X 12

500ml X 6

Preferred SKUs for E Commerce

18 Interviews with: Online Shoppers Age Group: 22-40PepsiCo products

Consumers SEC: A2, B1

Impulse Purchased Products Planned Purchased Products

15

• Engage and Interact with the customers

• The end result of the interaction would be an order

placed on the portal The features of the portal would be:

Strategygopepsi.com would be PepsiCo’s e-commerce portal to engage the digital audience

Niche ProductsMobile friendly

webpages, Mobile App

An 1800 number to order and

book

Facebook E- Mail login

Bundled products in range of Rs. 150 – Rs. 300

Minimum order value of Rs. 300

Web enabled payments

One day delivery and on demand

deliveryCash on delivery

Opportunity to engage and

brand

Customer Details Captured

Targeted Offerings

Ob

ject

ive

gop

epsi

.co

mW

hat

? an

d H

ow

?

Direct Selling

Order Products online

E-Commerce portal to interact with Brands

Entirely PepsiCo Owned

Position: Convenience and Fun

Tagline: Dosto ke Saath Party Time

Promotion through Existing Product Channels & otherEconomic mediums• CSDs and Beverages would have an add-on leaf to

promote gopepsi.com• On Snacks, promoted through product labels. A stamp

impression that would read “Buy online at gopepsi.co

16

• Integrated Brand Strategy: Combo packs for in-house brands to drive trial generation and cross-sell

• Furthermore, Basket Analysis to be carried out to bundle frequently bought products

Standalone Brand Strategy: A brand wise strategy to better engage with the Target Group and offer bundled products

StrategyA product strategy to increase brand wise engagement, targeted offerings and drive cross-sell

Tropicana 6 X 250ml, targeted at mothers. Include nutritional benefits. All the variants sold

for the innovators

Gatorade: Customer acquisition and building

loyalty by increasing bulk purchases; reinstating the replenishment proposition

CSDs, Lays and Kurkure bundled as a the Party Pack

Quaker Oats and Tropicana bundled as the breakfast combo pack

17

Site map

• Home• About US

• About PepsiCo• Our Mission and Vision• PepsiCo Values & Philosophy• Global Code of Conduct• Speak Up

• Brands• Pepsi• Mt. Dew• Tropicana• Lays• Quaker Oats• Gatorade

• Party Zone• Health Zone• Shopping Zone

• Cart | Login• Select Product/Combo Pack• Add to Cart

• Payment• Request Payment• Payment through Credit card/Debit Card• Exit

Home

News Feed………………………………………………………………………………………………

News Feed………………………………………………………………………………………………

Brands Party Zone Health Zone Shopping Zone Contact US

Cart | Login

Home

News Feed………………………………………………………………………………………………………………………………

News Feed………………………………………………………………………………………………………………………………

Brands Party Zone Health Zone Shopping Zone Contact US

Cart | Login

About US

Site map

Strategy gopepsi.com Web Portal and Site Map

18

Objective Implementation Details

Objective:• To Engage PepsiCo customers on Social

Media platform• To generate Loyalty for the brand• To help them attain Self Recognition among

peers

Objective:• Generate Awareness about GoPepsi.com• Engage Customers through peer to peer

Referencing• Connecting GoPepsi.com as a youth

oriented platform

What to Do? (Best Selfie Contest)• PepsiCo online buyers can upload your Party pictures with PepsiCo

products on PepsiCo FB page and Twitter Handle.• The Best Selfie will be selected every Week and discount will be given

for his next purchase on Go pepsi, thereby building loyalty

What to Do? (Get Set Go Moment)• Share how Pepsi complemented your peppy moments with your friends.• The “Get Set Go” moment should be posted on

#DostoKeSaathArtyTime.• The Best “Get Set GO “ moment will will be selected every Week and

discount will be given for next purchase on Gopepsi.com, therebybuilding loyalty

Objective:• Generate Awareness about GoPepsi.com• Utilize the current Distribution Channel of

PepsiCo for promotion• Minimal cost of Promotion

What to Do? (Strapper)• Use of Strapper on every bottle of Pepsi. This will be done in limited

outlets of the cities where GoPepsi has been launched• The retailers will be selected basis Consumer point of congregation

Objective:• Generate Awareness about GoPepsi.com• Utilize the current Distribution Channel of

PepsiCo for promotion• Minimal cost of Promotion

What to Do? (Stamp)• The Stamp will be utilized to perform the task of Strapper on Packet

products. This stamp will be posted on every Packet product of PepsiCo.• This will be done in mass market, (to minimize the cost of selective

printing)

TestStrategy

Objective Implementation Details

1

2

3

4

StrategyPromotional Strategies for gopepsi.com | Digital Media and Traditional Distribution Channel

19

Strategy Web order Journey and Order Fulfilment– gopepsi.com

Order Processing

Customer is aware of

gopepsi.com

Searches for gopepsi/Login on the website

Landing page -Interacts with

the brands

Adds items to carts

Show Cart, Recommendations

Logins via email, Facebook,

Create New Account

Shipping Information

Confirm Order

Select Payment Method

Pay through portal

Cash on Delivery

Show Confirmation

Page

Order Received at Distribution Center

Inventory check for particulars

Particulars are picked and Packed

Delivery Add. attached on Consignment

Consignment handed over to deliverymen

Deliverymen transports to address

Cash on Delivery –Receives Payment

COD Cash flow settled

WEB JOURNEY

ORDER

FULFILIMENT

20

StrategyHybrid Retail Platform: Selling on Flipkart & Amazon to leverage the Marketplace model

Playing to its strengths, Pepsi would be an enabler and a marketer on the marketplace model and allow the retailers to differentiate on factors other than price

Exclusive Tie-Ins

Marketplace Model

Retailers, Direct selling

PepsiCo direct selling

Portal’s Exclusive seller

Only RetailersLow Involvement

FacilitatorUndercutting

Deep Engagement with Customers Channel Conflict

Complete Control –Drives Profits

Involvement and High Costs

Low Involvement Greater Control

Greater power with Flipkart/Amazon

Pros Cons

Partnership that PepsiCo should setup with major players on Hybrid Retail PlatformPartnership that PepsiCo should setup with major players on Hybrid Retail Platform

21

Strategy Hybrid Retail Models – Opportunities and Challenges

Build consumer trust to purchase FMCG products online

Testing ground for new product innovations and buzz generation

Extremely useful during peak seasons where delivery and distribution center assets would be stretched

Most likely earliest to set operations in Tier 2 and 3 cities

Single SKUs combined with other purchases can be moved

Opportunity to cross sell across product categories

First mover’s advantage

Undercutting –Since the product is undifferentiated, sellers would compete on price

Lack of Customer Intent to buy FMCG product here

Low Margins: Sharing of Margins with Distributor, Retailer and the marketplace

High delivery times – sometimes as high as a week

Controlling Distributors and Retailers – selling online

Uncertainty over when and how they’ll sell FMCG products online

Opportunities ChallengesOpportunities Challenges

22

Profits and Costs are being shared at each stage of the Order Fulfilment. The

Retailer also bears the cost for the delivery to be carried out

The retailer would need to move large volumes to breakeven

Hybrid Retail Models – Opportunities and Challenges

Pepsi Distribution

Center

Customer Warehouse

Retailer – Store

Customer

3rd Party Delivery

Flipkart Amazon Aaram Shop

• Strategy

Strategy

• Profits and Costs are being shared at each stage of the Order

Fulfilment. The Retailer also bears the cost for the delivery to be

carried out

• The retailer would need to move large volumes to breakeven

• Pepsi must be an enabler and a promoter on this front to

increase engagement and drive revenues

• For long term, the marketplace model would be successful

if large volumes are being sold online

• There may be growth of retailers who dedicatedly serve the

online market

• Profits and Costs are being shared at each stage of the Order

Fulfilment. The Retailer also bears the cost for the delivery to be

carried out

• The retailer would need to move large volumes to breakeven

• Pepsi must be an enabler and a promoter on this front to

increase engagement and drive revenues

• For long term, the marketplace model would be successful

if large volumes are being sold online

• There may be growth of retailers who dedicatedly serve the

online market

23

Strategy Promotional Brief on Hybrid Retail Platforms

Basic Description about Product Special Offers, Cross Sell Opportunity

Consumers also Viewed (Other items)Customer Reviews

Example for PepsiCo

FOR DEMONSTRATION ONLY

24

Strategy Pure e-tailers Business Model and Growth Prospects

Big Basket Modern RetailLocal Banya Aaram Shop

Acts as an inventory center;Just in time purchase fromsuppliers3rd party transport facility forend to end delivery

Marketplace model, any sellercan register online and sell onthe online platform.Possibility of Click-n-buymodels

Inventory models used, tie-ups with wholesalers and cash-and-carry partners across the city for just in time delivery

Market place for Localretailers to sell on onlineplatform.End to end delivery takencare by retailers

Revenue earned on profitmargin

Product MarginsRevenue earned on profitmargin. Low Investment oninventory

Revenue earned by ads,special offers, programs—andinformation shared withmarketers

Complete Orders delivered intime

UnknownComplete Orders delivered intime

Low responsibility

Most likely to scale higher Unknown. Deep walletsNeeds to grow beyond

Mumbai39 cities. Slow growth

Online Players

Role

Revenue

Predictability of Delivery

Future growth

Delivery3rd party transport facility forend to end delivery

Outsourced to 3rd party Outsourced locallyLast mile delivery carried out

by Retailers

Big Basket Modern RetailLocal Banya Aaram Shop

25

Buy Groceries worth Rs. 800 and add a 2L Bottle of

Pepsi for Rs. 30

Dedicated e-tail players, have the greatest potential to scale up. These formats should continue to see growth rate as high as 40% MoM

Faster delivery times, Smaller SKUs and frequent orders would be reasons for e-tail to have the largest share of Pepsi E-Commerce platform

Incremental Growth

Targeting working women in the age group of 30 +, brands such as Tropicana, Quaker Oats would move in higher volumes here.

Opportunity lies in selling CSDs as a add-on complementary product with groceries such as Ready-To-Eat products to ensure BTL promotion

A communications and promotional strategy to ensure impulse purchases such as CSDs and Snacks are added to the cart. E.g. A scheme that adds a Pepsi tin to your cart every time you’ve added Rs. 300 of PepsiCo products

StrategyPepsi on e-tailers and Modern Trade embracing Ecommerce portals

PepsiCo move as an enabler and a marketer on e-tailing platform would

ensure volumes.

26

Strategy Comparative Analysis and Ranking of the Channels

Scalability Profitability Customer Engagement Ease of Implementation Current performance Total Score

Gopepsi.com

Flipkart

Amazon

Big Basket

Local Banya

Aaram Shop

GO Pepsi

Flipkart

Amazon

Big Basket

Local Baniya

Aaram Shop

4

4.5

5

5.5

6

6.5

7

7.5

8

3.5 4.5 5.5 6.5 7.5 8.5 9.5 10.5

Pro

fita

bili

ty

Consumer Engagement

• Anticipating the performance of portals on the stated

parameters, gopepsi.com stands at the top followed

by Flipkart

• On Consumer engagement, gopepsi.com is ranked

above Flipkart and Amazon

• Long term profitability of Flipkart and gopepsi.com are

ranked similar

Key Points

Parameters to Measure Performance

Bubble Size represents Scalability

The Execution Plan -1. Timelines2. Partnerships3. Cost Benefit Analysis

Tactics/Action

28

Action & Tactics Timelines - gopepsi.com

Ideally, Amazon and Flipkart start selling

Nationwide Roll out

Currently, being sold through e-tailers

Test PhaseTo test and fine tune facilities before the 8 City

Rollout

Phase 18 City, Long duration test. To

optimize performance and better manage costs

Phase 2National Rollout targeting 30 odd

Tier 2 and Tier 3 Indian citiesbetter manage costs

29

Action & Tactics Identification of Target Cities for gopepsi.com –Phase 1

Key Points

• Big Basket is the current market leader in Online Grocery Marketplaces

• Small Players like Aaram Shop and local Baniya are growing by targeting Delhi andMumbai respectively

• Currently all the major players are targeting Tier 1 city

Keyword: Online GroceryKeyword: Big Basket.comKeyword: Local Baniya .comKeyword: AAramshop.com

Keyword Search Results | Relative to Keyword: Online Grocery

Source: http://www.google.com/trends/...

Keyword: Big Basket.comKeyword: Local Baniya .comKeyword: AAramshop.com

No. of Searches Location-wise

Keyword: Online Grocery

Pune 94

Gurgaon 86

Bangalore 74

Hyderabad 46

Chennai 46

Mumbai 42

New Delhi 38

Online Grocery Search Results

Pune

Pune (Tier 2 City) ranked 2nd in Online grocery buying searches, can be thenext potential market for Online Grocery products

30

Action & Tactics Test Phase : April 2015 – September 2015

Criteria for Selecting Test City

High visits on E- Commerce Purchases/Searches for Grocery Purchase online

High Internet Penetration

Relatively smaller in area– High Population per density to limit Delivery costs

High Summers to increase sales of Beverages

High consumption of all the brands

Duration of Test Phase: 6 months. Includes 3 months of Peak Seasons (April – June)

Pune is suggested to be the

test city

Sno. Parameters Scale

1 Conversion Rate 2.7%

2 Average Number of Visitors per Month 5,670

3 No. of Orders to be fulfilled in the entire Test Phase 920

4 Delivery Time 1 Day Delivery(Deviations, if any)

5 Delivery Cost @ 10% of Total Revenue

Metric to be Looked at

CODPay by Credit

Card

Conversion RatePay by

DebitCard

Test Phase: Points to be checked

31

• As Modern Trade players embrace e-commerce and growinto Tier 2 and Tier 3 cities, consumer trust in buying FMCGproducts online will increase

• Providing quick deliveries and high on loyalty, e-tailers,especially city based e-tailers will grow bigger

Action & Tactics City Selection for Phase 1 and Long Term Channel Growth

S no City Internet UsersRank:

GoogleAnalytics

Portals Available

1 Mumbai 12000000 7Natures’ Basket, Local banya,

Big Basket

2 Delhi 8100000 8Aaram shop, Dilli Grocery, City

Kirana.com

3 Hyderabad 4700000 5Big Basket.com, Easy

Mandi.com, Aaramshop.com

4 Chennai 4500000 6Chennai online Grocery.com,

Maliga Kadai.com, Big Basket.com

5 Kolkata 4400000 9Salt N Soap.com, Online grocery Bazaar.com, Big

Basket.com

6 Bangalore 3800000 4Big Basket.com, ZopNow.com,

Natures’ Basket

7 Ahmedabad 2800000 10Up2Home.com,

Aaramshop.com,GharVakhri.com

8 Pune 2700000 2Order my grocery.om, Natures’

Basket, Easy Dukaan.com

City Selection Criteria

Internet UsageRank: Google

AnalyticsAvailability of

Portals

Interaction with brands on Social

Media

Deeper Interaction on gopepsi.com

Orders Pepsi online through

e-tailers

Long term Channel Growth

• As Modern Trade players embrace e-commerce and growinto Tier 2 and Tier 3 cities, consumer trust in buying FMCGproducts online will increase

• Providing quick deliveries and high on loyalty, e-tailers,especially city based e-tailers will grow bigger

• Higher delivery times and greater engagement wouldmove gopepsi.com as an engagement portal. Marketingefforts need to carried out to move gopepsi.com to sustainhigher traffic

• Higher delivery times and greater engagement wouldmove gopepsi.com as an engagement portal. Marketingefforts need to carried out to move gopepsi.com to sustainhigher traffic

32

Action & Tactics

PepsiCo will have to partner with a series of players on the digital front

Promotions on Flipkart/Amazon to move volumes

Consumer Data to better target brands

Large Format Players

Tie Ups - Enablers of promotions and digital content to engage audiences

Sharing of data to better target products and manage distribution

Exclusive e-tail Players

Timely, Cost effective transportation to customer

Cash on Delivery –Settlement

Tracking, delivery on request time

3rd Party Delivery

Extensive integrated web payment facility

Payment Providers

End to end solution providers –from servers, website, order flow, Customer Mailers, SMS updates

CRM/Website Solution Providers

Customer support executive to manage orders and customer support to gopepsi

Customer Support Executive

Existing Digital Marketing agency for PepsiCo brands - provide branding, customer grievance online

Digital Advertising Agency

33

Pepsi’s E-Commerce strategy profit would increase by 10% YoYuntil Phase 1 ends

Action & Tactics

Test Phase 1

Jan 2015 - June 2015 July 2015 - June 2016 July 2016 - June 2017 July 2017 -June 2018 July 2018 - June 2019

Total Operational Revenue 275,562.00₹ 8,777,160.00₹ 11,410,308.00₹ 14,833,400.40₹ 19,283,420.52₹

Cost of Goods Sold 40% of Op Revenue 110,224.80₹ 2,633,148.00₹ 3,423,092.40₹ 4,450,020.12₹ 5,785,026.16₹

Infrastructure costs Approximated 100,000.00₹ 400,000.00₹ 50,000.00₹ 50,000.00₹ 50,000.00₹

Delivery Chargers 10% of Op Revenue 27,556.20₹ 877,716.00₹ 1,141,030.80₹ 1,483,340.04₹ 1,928,342.05₹

Human Labour Chargers Rs. 20 Lakhs 125,000.00₹ 2,000,000.00₹ 2,000,000.00₹ 2,000,000.00₹ 2,000,000.00₹

Credit Card Payment Charges 1% of Op Revenue 2,755.62₹ 87,771.60₹ 114,103.08₹ 148,334.00₹ 192,834.21₹

Promotional Charges Rs. 15 Lakhs 93,750.00₹ 1,500,000.00₹ 1,500,000.00₹ 1,500,000.00₹ 1,500,000.00₹

Taxation 12.5% of Op Revenue 34,445.25₹ 1,097,145.00₹ 1,426,288.50₹ 1,854,175.05₹ 2,410,427.57₹

Total Cost 493,731.87₹ 8,595,780.60₹ 9,654,514.78₹ 11,485,869.21₹ 13,866,629.98₹

Profit/Loss -218,169.87₹ 181,379.40₹ 1,755,793.22₹ 3,347,531.19₹ 5,416,790.54₹

Profit Ratio -44.2% 2.1% 18.2% 29.1% 39.1%

CPI 7.93

Test Phase 2

Cost Benefit Analysis: Pepsi E-Commerce will break even within 1.5 years

Pepsi’s E-Commerce strategy profit would increase by 10% YoYuntil Phase 1 ends ₹ 0

₹ 5

₹ 10

₹ 15

₹ 20

Test Phase Year 1 Year 2 Year 3 Year 4

Mill

ion

s

Total Operational Revenue Total Cost

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Met

rics

To optimize engagement and improve customer experience, the e-commerce strategy and action plan must be closely monitored. • Furthermore, PepsiCo should measure metrics of its own portal and monitor closely the performance of its brand on

other portals• The metrics must be brought down to levels of region, Channels, and Customer Profile to better understand and

implement better changesThe following are some metrics/measure suggested to optimize performance

Control Monitoring Performance of Pepsi E-Commerce

To optimize engagement and improve customer experience, the e-commerce strategy and action plan must be closely monitored. • Furthermore, PepsiCo should measure metrics of its own portal and monitor closely the performance of its brand on

other portals• The metrics must be brought down to levels of region, Channels, and Customer Profile to better understand and

implement better changesThe following are some metrics/measure suggested to optimize performance

Customer Experience (gopepsi.com)

Traffic, Time Spent

Site Usage, Orders

Cart Abandonment Rate

Marketing Metrics (All channels)

Customers Acquired, Retained

Customer Profile, Shopping Basket

Location Analysis

Financial Metrics (All channels)

Revenues

Expenses (Return on Investment)

Delivery and Other Costs

Change Effected

Targets, Growth Rate

Product Strategy Channel Management

Revenues, Costs

Timelines for phases

User Experience

Partnerships

Met

rics

35

AppendixIn Depth Interviews and Survey Respondents Demographics and Behavioral

• 215 (153 Males and 62 Females) respondents filled an online Survey. The survey was designed to understand Consumers’ behavior specific

to PepsiCo.

• Respondents were majorly- college, school students (Age Group: 16-20 yrs- 15%, 20-25 yrs- 63%, 25-30yrs- 12%, Above 30- 10%)

• 63% of respondents had purchased on an E Commerce portal atleast once (Females: 72% , Males: 28%)

• To formulate the bundling strategy, Consumers preferred choice was recorded. Sinilar, was done to formulate the upselling strategy.

• 42 (25 Males and 17 Females) Interviews were conducted with an objective to find consumer behavior while using an E Commerce

platform.

• 7 (2M, 1F, Bangalore) respondents were younger than 18 years old, 19 (7M, 4F) respondents in age gap of 19 – 24 and 16

respondents were in age gap of 25 (5M, 2F) and above. None of the respondents were married.

• The interviewees were regular internet users, having purchased on E Commerce platform atleast once.

• Interviews were conducted in Preet Vihar and Vikas Puri (Delhi)

In D

epth

Inte

rvie

ws

Surv

ey R

esp

on

den

ts

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Thank you.Akshay Maggu

Akshay Nangia

Sourabh Surana

The Gazab Ghaziabadi, IMT Ghaziabad