Become Indra’s Advisor Contest (BIAC-8)

Phase -2 Submission

The Gazab Ghaziabadi, IMT Ghaziabad

 Agenda

Situation • • E ECommerce • Consumer Insights

CommerceIndustry
Industryinsights
insights
Analysis

Objective • • Engage • Volume • Growth

Engage

Accessible
Creativity Fun your Passion
Flipkart Strategy • • SWOT
Channel Strategy
analysis
Channel Strategy • Product Strategy
Grocery Tropicana
Revenue AaramShop.com
Amazon Heritage

Tactics and • • Phase

PhaseWise
WiseModel
Model • Cost Benefit Analysis
Action Plan • • Partnerships
Partnerships

Control • • Monitoring
MonitoringPerformance
Performance

2
Situation
Analysis E-Commerce is becoming bigger by the day

Retail Market* – Rs. 25K

• With sales at Rs. 12.6 Billion for 2014, an expected CAGR of 30% against 13% Billion
• 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 big
CAGR of traditional retail for the next 4 years, E-Commerce is the “next big
thing” in Indian retail
thing” in Indian retail Organized Retail- Rs.
1.7K Billion

• E-tailing or selling of FMCG products online, has limited presence primarily

• E-tailing or selling of FMCG products online, has limited presence primarily Online Retail – Rs. 630
through nascent players, a huge potential lies online Billion
through nascent players, a huge potential lies online

Online FMCG
Market – Rs. 1.4
Factors Driving E-Commerce Growth in India# Billion

Increase in internet users Increase in Discretionary Spend Pepsi E-

Commerce: ?
Increase in Multiple Increase in
More Women Rise in Time
Mobile Payment Transaction Discounts
Shoppers spent online
devices Methods Value

#EY Rebirth of E-Com in India, http://www.ey.com/Publication/...

*CRISIL Opinion, Feb 2014 http://www.crisil.com/pdf/research/... 3
Situation 58% of survey respondents would definitely try buying PepsiCo
Analysis
products online

Would you try buying PepsiCo products (Pepsi, Mt. Dew,

70% Tropicana, Lay’s) online?*
58%
60%
50%
40%
30%
30%
20%
12%
10%
0%
Definitely Depends on the Price/Offer No

Opportunities in E-Commerce for PepsiCo Challenges PepsiCo faces on the E-Commerce front

Frequent Moving low Need to

Build loyalties New Products Restrictions on High Cost of
Purchasers, Opportunity at Involvement, Competition Develop
among the High ticket size buzz FDI in e- Last mile
Bulk Long tail impulse from QSRs capabilities
digital savvy generation commerce Delivery
consumers products and scale

*Source: Consumer Survey 4

Situation
Analysis Understanding the Pepsi e-Customer

Demographic
Demographic&&Behavioral
BehavioralSegmentation
Segmentation Psychographic
PsychographicSegmentation
SegmentationofofOnline
OnlineCustomer
Customer
High Indifferent Brand Orientation Conscious
 16 – 40 year old
 Male/Female
 Single or Married with children
Stylish
Too busy Professionals
 Comfortable purchasing online

Self Confidence
 Aware of PepsiCo brands

Boring Shopping Experience Fun

Consumer Drivers of Online Shopping

Shopping’s Fun
Conformists • Interacts with brands
• Looks for discounts

Convenience Price Fun Variety

Low What’s Right Style Consciousness What’s new

Opportunity to deeply interact with brands and offering price discounts would better serve customers
5
Objective
A target in Volumes and Branding would build
Revenues and Loyalty for PepsiCo
Objectives
Pepsi on the E-Commerce - The objective is to drive both,
Engagements and Volumes

Engage Volumes Growth

• Serving 30,000 customers, • Maintaining Above Industry Growth
• Online Engagement and Interaction achieving Operational Revenue of Rate of 30%
with 10 Lakh people Rs. 88 Lakhs

7
Objectives
The market potential is valued at Rs. 8.8 Million for the top 8
cities in Year 1

No of Internet E-Commerce FMCG Visitors per Pepsi visitors per Yearly Website Pepsi Buyers
City Value of Sale
Users* Visitors Month month month Visitors (yearly)
1.4% of E-Commerce At 2.7% Conversion Minimum Order Value
60% of Internet Users 25% of FMCG Visitors X 12
Visitors Rate 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

YEAR 1
8 Cities 10 Lakh Engagements
30,000 Customers Served Revenue Rs. 8.8 Million

http://www.slideshare.net/AccelIndiaVC/...
*Source: IAMAI 2013 Data 8
Strategy
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 Targeting Home Consumption through the e-commerce channel
PEPSICO
COMPLEMENTARY
Tropicana FOOD

CSD Grocery
Currently, Pepsico But, onareE Commerce,
brands consumed/bought with different
This consumption is done at
Oats Restaurants Food Consumption will occur at
combinations of food/ groceries/restaurants Food

Snacks Ready To Eat Food

Aquafina

Share of Food Services Industry

Share of by PlaceIndustry
Food Services of Consumption*
by Place of Consumption*
Frozen
Frozen Dessert,
Dessert, 4%
4% Cafés, 12%
Fine Dining,
Fine Dining, 4% 4% Cafés, 12%
Casual Dining, 32% Casual Dining, 32% Quick Serve, 44% Quick Serve, 44% Home
OOH

Target
70% of OOH Snacks Home Consumption
consumption takes place in FSRs and QSRs.
10
 Test
Strategy Cross
Cross Selling Strategy in Home Consumption
InInHouse
HouseBrand
BrandCross
CrossSelling
SellingStrategy
Strategy Key Points
In-Home Consumption

• Majority of PepsiCo Products have

been categorized under
“Anywhere Consumed Products”
• Quaker Oats, Gatorade and
OOH
Consumption Tropicana are consumed at

Time of the day and products consumed specific location

Cross
In House Selling
Brand Strategy
Cross Selling Strategy To Target Home Consumption:
What are you likely to purchase together online from the • Move Bulk Volumes of CSDs and
What is likely to be your Total Order value following list?
40% from Pepsi E-Commerce? Snacks (Order Value: 300)
Restaurant Consumer Ready to Eat
Products Grocery • Cross Sell PepsiCo products with
Food Durables Food
Tropicana 61% 23% 5% 17% other in-house products
20% < 350, 26%
< 400, 24% CSD 69% 78% 12% 75%
< 300, 19%
Oats 56% 8% 10% 55% • Cross sell Beverages with other
< 250, 14% More than
Snacks 65% 26% 15% 45% groceries and ready-to-eat food
< 100, 8% 4000
0% Aquafina 10% 78% 13% 34%
IN INR
< 100 < 250

*Source: Consumer Survey 11

Strategy PepsiCo In-house cross-selling Opportunity
10
Respondents*
Respondentsconsuming
consumingCSD
CSDpreferred
preferredpurchasing
purchasingChips
Chipsand
CSD Flavored and
Customer Willingness

8 CSD CSD Chips Puffed snacks

Puffed snacks
1 6 Puffed Snack
Health Drink
4 Breakfast Food

2 Sports Drink

0
0 2 4 Makes a Meal 6 8 10

Respondents
Respondentsconsuming
consumingSnacks
Snacksfeels
feelsthat
thatCSDs
CSDscomplements
complementstheir
their
10 Snacks
Snacks meal
Chips meal
2
Customer Willingness

8 Puffed CSD
Snack
6 Sport
Flavored
Drink
4 Breakfast Food Health Drink CSD
2

0
0 2 4 Makes a Meal 6 8 10

10 Quaker
Quakerconsuming
consumingRespondents
Respondentsfelt feltHealth
Healthdrink/Sports
drink/SportsDrink
Drink
Quaker Oats Sports
asaspart
3 Quaker Oats partofoftheir
theirmeal
mealisissuitable
suitablefor
fortheir
theirhealthy
healthydiet
diet
Customer Willingness

8 Drink

6 Flavored CSD Chips Health

Drink
4
Puffed
2 CSD
Snack
0
0 2 4 Makes a Meal 6 8 10 *Source: Consumer Survey 12
Strategy
Cross Sell Potential Score (CSPS) indicates the potential to sell
pairs or groups of PepsiCo products online
CSD
CSD Snacks
Snacks Breakfast
Breakfastfood
food

6.6 4.0 0.7

Calculation of CSPS

3.7 • Form a Meal: Low: 2 High: 10

5.0 0.7
• Willingness of Consumer: Scale 0 to 10
• Number of Customers in cluster: 0 to
0.2
200 customers
0.1 0.3
(Number in the circle represents score out of
6.7 10)

2.0 6.7
1.3
CSPS: FM*WOC*Cluster Size
0.3 5.7
1.5
Potential to cross sell
2.6 3.3 1.0
products in PepsiCo portfolio

13
Strategy
Products, often impulsively bought, will be sold as larger packs
to drive frequent consumption

PepsiCo products
18 Interviews with: Online Shoppers Age Group: 22-40 SEC: A2, B1
Consumers

Consumer Insight: Purchases for Home 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

Preferred SKUs for E Commerce

Impulse Purchased
Impulse PurchasedProducts
Products Planned Purchased
Planned PurchasedProducts
Products

Brand Preferred SKU Brand Preferred SKU Brand Preferred SKU

600 ml X 6, 2 L X 3 600 ml X 6, 2L X 3 600 g, 1 Kg

600 ml X 6, 2 L X 3 180 g X 4, 67g X 6 1L X 3, 200ml X 12

500 ml X 6, 1.2 L X 3 180g X 4, 67g X 6 1L X 12

600 ml X 6, 2L X 3 Rs 20 Pack bundled 500ml X 6

14
Strategy
gopepsi.com would be PepsiCo’s e-commerce portal to engage
the digital audience

• Engage and Interact with the customers

Objective

• The end result of the interaction would be an order

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

E-Commerce portal to Mobile friendly An 1800 number

gopepsi.com

Direct Selling Niche Products webpages, to order and

interact with Brands
Mobile App book
Order Products online Entirely PepsiCo Owned
Bundled products
Facebook E- Mail Minimum order
in range of Rs.
login value of Rs. 300
Position: Convenience and Fun 150 – Rs. 300
What? and How?

Tagline: Dosto ke Saath Party Time One day delivery

Web enabled
and on demand Cash on delivery
Promotion through Existing Product Channels & other payments
delivery
Economic mediums
• CSDs and Beverages would have an add-on leaf to
promote gopepsi.com Opportunity to
Customer Details Targeted
• On Snacks, promoted through product labels. A stamp engage and
Captured Offerings
impression that would read “Buy online at gopepsi.co brand

15
Strategy
A product strategy to increase brand wise engagement, targeted
offerings and drive cross-sell
Standalone Brand Strategy: A brand wise strategy to • Integrated Brand Strategy: Combo packs for in-house
better engage with the Target Group and offer bundled brands to drive trial generation and cross-sell
products • Furthermore, Basket Analysis to be carried out to bundle
frequently bought products

CSDs, Lays and Kurkure bundled as a the Party Pack

Tropicana 6 X 250ml, targeted Gatorade: Customer

at mothers. Include nutritional acquisition and building
benefits. All the variants sold loyalty by increasing bulk
for the innovators purchases; reinstating the
replenishment proposition Quaker Oats and Tropicana bundled as the breakfast
combo pack

16
Strategy gopepsi.com Web Portal and Site Map

Cart | Login Site

Sitemap
map

Home About US Brands Party Zone Health Zone Shopping Zone Contact US
Home Brands Party Zone Health Zone Shopping Zone Contact US • 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
News Feed News Feed
• Payment
……………………………… ………………………………
• Request Payment
……………………………… ………………………………
• Payment through Credit card/Debit Card
……………………………… ………………………………
News Feed News Feed • Exit
……………………………… ………………………………
……………………………… ………………………………
……………………………… ……………………………… 17
 Test
Strategy
Promotional Strategies for gopepsi.com | Digital Media and
Strategy
Traditional Distribution Channel
Objective
Objective Implementation
Implementation Details
Details
Objective:
What to Do? (Best Selfie Contest)
• To Engage PepsiCo customers on Social
• PepsiCo online buyers can upload your Party pictures with PepsiCo
Media platform
1 • To generate Loyalty for the brand
products on PepsiCo FB page and Twitter Handle.
• The Best Selfie will be selected every Week and discount will be given
• To help them attain Self Recognition among
for his next purchase on Go pepsi, thereby building loyalty
peers

What to Do? (Get Set Go Moment)

Objective:
• Share how Pepsi complemented your peppy moments with your friends.
• Generate Awareness about GoPepsi.com
• The “Get Set Go” moment should be posted on
• Engage Customers through peer to peer
2 Referencing
#DostoKeSaathArtyTime.
• The Best “Get Set GO “ moment will will be selected every Week and
• Connecting GoPepsi.com as a youth
discount will be given for next purchase on Gopepsi.com, thereby
oriented platform
building loyalty

Objective:
What to Do? (Strapper)
• Generate Awareness about GoPepsi.com
• Use of Strapper on every bottle of Pepsi. This will be done in limited
3 • Utilize the current Distribution Channel of
outlets of the cities where GoPepsi has been launched
PepsiCo for promotion
• The retailers will be selected basis Consumer point of congregation
• Minimal cost of Promotion

Objective:
What to Do? (Stamp)
• Generate Awareness about GoPepsi.com
• The Stamp will be utilized to perform the task of Strapper on Packet
• Utilize the current Distribution Channel of
4 PepsiCo for promotion
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
• Minimal cost of Promotion
printing)
18
Strategy Web order Journey and Order Fulfilment– gopepsi.com

Customer is Searches for Landing page -

Adds items to
aware of gopepsi/Login Interacts with
carts

WEB JOURNEY
gopepsi.com on the website the brands
Logins via email,
Facebook,
Show Cart,
Recommendations Confirm Order
Create New
Account
Pay through
portal
Show Select Payment
Order Confirmation Shipping
Processing Method Information
Page Cash on
Delivery

Order Received at Inventory check for Particulars are picked Delivery Add. attached

FULFILIMENT
Distribution Center particulars and Packed on Consignment

ORDER
Cash on Delivery – Deliverymen transports Consignment handed
COD Cash flow settled
Receives Payment to address over to deliverymen

19
Strategy
Hybrid Retail Platform: Selling on Flipkart & Amazon to leverage
the Marketplace model

Partnership
Partnershipthat
thatPepsiCo
PepsiCoshould
shouldsetup
setupwith
withmajor
majorplayers
playerson
onHybrid
HybridRetail
RetailPlatform
Platform
Pros Cons
Low Involvement
Only Retailers Undercutting
Facilitator
Marketplace
Model
Retailers, Direct Deep Engagement
with Customers Channel Conflict
selling

PepsiCo direct Complete Control – Involvement and

selling Drives Profits High Costs
Exclusive
Tie-Ins
Portal’s Exclusive Low Involvement Greater power with
seller Greater Control Flipkart/Amazon

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
20
Strategy Hybrid Retail Models – Opportunities and Challenges

Opportunities
Opportunities Challenges
Challenges
Build consumer trust to purchase FMCG products online Undercutting –Since the product is undifferentiated, sellers
would compete on price
Testing ground for new product innovations and buzz
generation Uncertainty over when and how they’ll sell FMCG products
online
Extremely useful during peak seasons where delivery and
distribution center assets would be stretched
Lack of Customer Intent to buy FMCG product here
Most likely earliest to set operations in Tier 2 and 3 cities
Controlling Distributors and Retailers – selling online
Single SKUs combined with other purchases can be moved
Low Margins: Sharing of Margins with Distributor, Retailer
Opportunity to cross sell across product categories and the marketplace

First mover’s advantage High delivery times – sometimes as high as a week

21
Profits and Costs are being shared at each stage of the Order Fulfilment. The

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

The retailer would need to move large volumes to breakeven

Strategy Hybrid Retail Models – Opportunities and Challenges

Flipkart Amazon • • Profits

Profitsand
andCosts
Costsare
arebeing
beingshared
sharedatateach
eachstage
stageofofthe
theOrder
Order
Aaram Shop
Fulfilment.
Fulfilment.The
TheRetailer
Retaileralso
alsobears
bearsthe
thecost
costfor
forthe
thedelivery
deliverytotobebe
carried
carriedout
out
• • The
Theretailer
retailerwould
wouldneed
needtotomove
movelarge
largevolumes
volumestotobreakeven
breakeven
Pepsi
Customer
Distribution Retailer – Store
Warehouse
Center
• • Pepsi
Pepsimust
mustbe
bean
anenabler
enablerand
andaapromoter
promoteron
onthis
thisfront
fronttoto
increase
increaseengagement
engagementand
anddrive
driverevenues
revenues
3rdParty
Delivery • • For
Forlong
longterm,
term,the
themarketplace
marketplacemodel
modelwould
wouldbe
besuccessful
successful
ififlarge
largevolumes
volumesare
arebeing
beingsold
soldonline
online

• • There
Theremay
maybe
begrowth
growthofofretailers
retailerswho
whodedicatedly
dedicatedlyserve
servethe
the
Customer
online
onlinemarket
market

22
Strategy Promotional Brief on Hybrid Retail Platforms

Example for PepsiCo Basic Description about Product Special Offers, Cross Sell Opportunity

Customer Reviews Consumers also Viewed (Other items)

FOR DEMONSTRATION ONLY

23
Strategy Pure e-tailers Business Model and Growth Prospects

Online Players Big Basket

Big Basket Local Banya
Local Banya Aaram Shop
Aaram Shop Modern Retail
Modern Retail
Acts as an inventory center; Inventory models used, tie- Market place for Local Marketplace model, any seller
Just in time purchase from ups with wholesalers and retailers to sell on online can register online and sell on
Role suppliers cash-and-carry partners platform. the online platform.
3rd party transport facility for across the city for just in time End to end delivery taken Possibility of Click-n-buy
end to end delivery delivery care by retailers models

3rd party transport facility for Last mile delivery carried out
Delivery Outsourced locally Outsourced to 3rd party
end to end delivery by Retailers

Revenue earned by ads,

Revenue earned on profit
Revenue earned on profit special offers, programs—and
Revenue margin. Low Investment on Product Margins
margin information shared with
inventory
marketers
Predictability of Complete Orders delivered in Complete Orders delivered in
Delivery
Low responsibility Unknown
time time
Needs to grow beyond
Future growth Most likely to scale higher 39 cities. Slow growth Unknown. Deep wallets
Mumbai

24
Strategy
Pepsi on e-tailers and Modern Trade embracing Ecommerce
portals

Dedicated e-tail players, have the greatest potential to scale up. These formats should
continue to see growth rate as high as 40% MoM
Buy Groceries
Faster delivery times, Smaller SKUs and frequent orders would be reasons for e-tail to have worth Rs. 800 and
the largest share of Pepsi E-Commerce platform
add a 2L Bottle of
Pepsi for Rs. 30
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
PepsiCo move as an enabler and a
A communications and promotional strategy to ensure impulse purchases such as CSDs and marketer on e-tailing platform would
Snacks are added to the cart. E.g. A scheme that adds a Pepsi tin to your cart every time ensure volumes.
you’ve added Rs. 300 of PepsiCo products

25
Strategy Comparative Analysis and Ranking of the Channels

Parameters to Measure Performance

Scalability Profitability Customer Engagement Ease of Implementation Current performance Total Score
Gopepsi.com
Flipkart
Amazon
Big Basket
Local Banya
Aaram Shop

8
Key Points
7.5 Flipkart
• Anticipating the performance of portals on the stated
7
parameters, gopepsi.com stands at the top followed
Profitability

6.5
Big Basket GO Pepsi
6 by Flipkart
Aaram Shop
5.5 • On Consumer engagement, gopepsi.com is ranked
5
Amazon Bubble Size above Flipkart and Amazon
4.5
Local Baniya represents Scalability • Long term profitability of Flipkart and gopepsi.com are
4
3.5 4.5 5.5 6.5 7.5 8.5 9.5 10.5
ranked similar
Consumer Engagement
26
Tactics/Action
The Execution Plan -
1. Timelines
2. Partnerships
3. Cost Benefit Analysis
Action &
Tactics Timelines - gopepsi.com

Test Phase Phase 1 Phase 2

8 City, Long duration test. To National Rollout targeting 30 odd
To test and fine tune facilities before the 8 City
optimize performance and better Tier 2 and Tier 3 Indian cities
Rollout
manage costs better manage costs

Ideally, Amazon and

Currently, being sold Flipkart start selling
through e-tailers Nationwide
Roll out 28
Action &
Tactics Identification of Target Cities for gopepsi.com –Phase 1

No. of Searches Keyword Search Results | Relative to Keyword: Online Grocery

Location-wise Keyword: Online Grocery
Keyword: Big Basket.com
Keyword: Online Grocery Keyword: Local Baniya .com
Keyword: Big Basket.com
Keyword: AAramshop.com
Keyword: Local Baniya .com
Keyword: AAramshop.com

Pune Key Points

Online Grocery
Search Results • Big Basket is the current market leader in Online Grocery Marketplaces
Pune 94
• Small Players like Aaram Shop and local Baniya are growing by targeting Delhi and
Gurgaon 86 Mumbai respectively
Bangalore 74
Hyderabad 46 • Currently all the major players are targeting Tier 1 city
Chennai 46
Mumbai 42 Pune (Tier 2 City) ranked 2nd in Online grocery buying searches, can be the
New Delhi 38 next potential market for Online Grocery products
Source: http://www.google.com/trends/... 29
Action &
Tactics Test Phase : April 2015 – September 2015

Duration of Test Phase: 6 months. Includes 3 months of Peak Seasons (April – June)
High visits on E- Commerce Purchases/Searches for Grocery Purchase online

High Internet Penetration Pune

Criteria for Selecting Relatively smaller in area– High Population per density to limit Delivery costs
is suggested to be the
Test City test city
High Summers to increase sales of Beverages

High consumption of all the brands

Metric to be Looked at
Sno. Parameters Scale Test Phase: Points to be
checked
1 Conversion Rate 2.7%
2 Average Number of Visitors per Month 5,670
Pay by Credit
COD Card
3 No. of Orders to be fulfilled in the entire Test Phase 920
4 Delivery Time 1 Day Delivery(Deviations, if any) Pay by
Conversion Rate
DebitCard
5 Delivery Cost @ 10% of Total Revenue
30
Action &
Tactics City Selection for Phase 1 and Long Term Channel Growth
City Selection Rank: Google Availability of
Criteria
Internet Usage
Analytics Portals Long term Channel Growth
Rank:
S no City Internet Users Google Portals Available
Analytics
• • AsAsModern
ModernTrade Tradeplayers
playersembrace
embracee-commerce
e-commerceand andgrow
grow
into Tier 2 and Tier 3 cities, consumer trust in buying
into Tier 2 and Tier 3 cities, consumer trust in buying FMCG FMCG
Natures’ Basket, Local banya,
1 Mumbai 12000000 7
Big Basket products
productsonline
onlinewill increase
will increase
Aaram shop, Dilli Grocery, City
• • Providing
Providing quick deliveriesand
quick deliveries andhigh
highononloyalty,
loyalty,e-tailers,
e-tailers,
2 Delhi 8100000 8 especially city based e-tailers will grow bigger
Kirana.com especially city based e-tailers will grow bigger
Big Basket.com, Easy
3 Hyderabad 4700000 5
Mandi.com, Aaramshop.com
Chennai online Grocery.com,
• • Higher
Higher delivery
delivery times
times and
and greater
greater engagement
engagement would
would
4 Chennai 4500000 6 Maliga Kadai.com, Big move gopepsi.com as an engagement portal.
move gopepsi.com as an engagement portal. Marketing Marketing
Basket.com efforts
effortsneed
needtotocarried
carriedout
outtotomove
movegopepsi.com
gopepsi.comtotosustain
sustain
Salt N Soap.com, Online higher traffic
higher traffic
5 Kolkata 4400000 9 grocery Bazaar.com, Big
Basket.com
Big Basket.com, ZopNow.com,
6 Bangalore 3800000 4 Interaction with Deeper Orders Pepsi
Natures’ Basket
brands on Social Interaction on online through
Up2Home.com, Media gopepsi.com e-tailers
7 Ahmedabad 2800000 10 Aaramshop.com,
GharVakhri.com
Order my grocery.om, Natures’
8 Pune 2700000 2
Basket, Easy Dukaan.com
31
Action & PepsiCo will have to partner with a series of players on the
Tactics
digital front

Promotions on Flipkart/Amazon
Large Format to move volumes Extensive integrated web
Payment Providers
payment facility
Players Consumer Data to better target
brands

End to end solution providers –

Tie Ups - Enablers of promotions CRM/Website
from servers, website, order flow,
and digital content to engage Solution Providers
Exclusive e-tail Customer Mailers, SMS updates
audiences
Players Sharing of data to better target
products and manage distribution Customer support executive to
Customer Support
manage orders and customer
Executive
support to gopepsi

Timely, Cost effective

transportation to customer Existing Digital Marketing agency
3rd Party Delivery Cash on Delivery –Settlement Digital Advertising for PepsiCo brands - provide
Agency branding, customer grievance
Tracking, delivery on request time
online

32
Action & Cost Benefit Analysis: Pepsi E-Commerce will break even within
Tactics
1.5 years
Test Phase 1 Test Phase 2
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
₹ 20
Millions

Total Operational Revenue Total Cost

Pepsi’s E-Commerce ₹ 15
Pepsi’sprofit
strategy E-Commerce
would ₹ 10

increase by 10% would

strategy profit YoY ₹5

until Phase 1 endsYoY

increase by 10% ₹0
Test Phase Year 1 Year 2 Year 3 Year 4
until Phase 1 ends

33
Control Monitoring Performance of Pepsi E-Commerce

To optimize engagement and improve customer experience, the e-commerce strategy and action plan must be closely
To optimize engagement and improve customer experience, the e-commerce strategy and action plan must be closely
monitored.
monitored.
• Furthermore, PepsiCo should measure metrics of its own portal and monitor closely the performance of its brand on
• Furthermore, PepsiCo should measure metrics of its own portal and monitor closely the performance of its brand on
other portals
other portals
• The metrics must be brought down to levels of region, Channels, and Customer Profile to better understand and
• The metrics must be brought down to levels of region, Channels, and Customer Profile to better understand and
implement better changes
implement better changes
The following are some metrics/measure suggested to optimize performance
The following are some metrics/measure suggested to optimize performance

Traffic, Time Spent Targets, Growth Rate

Customer
Experience Site Usage, Orders
Product Strategy Channel
(gopepsi.com) Management
Cart Abandonment Rate

Customers Acquired, Retained Revenues, Costs

Metrics
Metrics

Marketing Metrics
Customer Profile, Shopping Basket Change Effected
(All channels) Timelines for phases
Location Analysis

Revenues User Experience

Financial Metrics
Expenses (Return on Investment)
(All channels) Partnerships
Delivery and Other Costs
34
Appendix
In Depth Interviews and Survey Respondents Demographics and
Behavioral

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

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)

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

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.

35
Thank you.
Akshay Maggu
Akshay Nangia
Sourabh Surana

The Gazab Ghaziabadi, IMT Ghaziabad

36