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eCommerceSimplified Safe Harbor This presentation and the - - PowerPoint PPT Presentation

eCommerceSimplified Safe Harbor This presentation and the accompanying slides (the Presentation), which has been prepared by iStreet Network Limited (the Company), solely for information purposes and do not constitute any offer,


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eCommerceSimplified

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eCommerceSimplified

This presentation and the accompanying slides (the “Presentation”), which has been prepared by iStreet Network Limited (the “Company”), solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securities, and shall not form the basis or be relied on in connection with any contract or binding commitment whatsoever. No offering of securities of the Company will be made except by means of a statutory offering document containing detailed information about the Company. Our actual results may differ materially from those included in this presentation for a variety of reasons, including, but not limited to - changes in political, business, and economic conditions; foreign exchange rate fluctuations; the impact and integration of recent and future acquisitions; our need to successfully react to the increasing importance of mobile payments and mobile commerce and the social aspect of commerce; an increasingly competitive environment for our businesses; the complexity of managing an increasingly large and growing enterprise, with a broad range of businesses; our need to manage regulatory, tax and litigation risks (including risks); and our need to timely upgrade and develop our systems, infrastructure, and customer service capabilities at reasonable cost while maintaining site stability and performance and adding new products and features. This presentation also contains product demonstrations (or reference to such new products), some of which are conceptual and may not be developed or launched in the same form, with all of the same features or at all. The Company assumes no obligation to update any forward-looking information contained in this Presentation. Any forward-looking statements and projections made by third parties included in this Presentation are not adopted by the Company and the Company is not responsible for such third party statements and projections..

Safe Harbor

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Group Evolution

YEAR R 1986-88 88

Incorporated in 1986 and started trading in API & intermediates in 1988

YEAR R 1992-94 94

Converted into Public Ltd company in 1992 and raised funds through IPO in 1994

YEAR R 1995

Sets up GMP standard API & Intermediate manufacturing plant in Gujarat

YEAR R 1999

Promoted India’s 1st Online Chemical Trading Portal PwC – as a strategic partner

YEAR R 2001 2001-08 08

API & Intermediate business runs into rough weather and company turns sick; Continues with Job Work

YEAR R 2008 2008-09 09

Clears all debts & outstanding and the company becomes debt-free

YEAR R 2012

Comes Out of Financial Sickness & sets up Digital & eCommerce division; Fully exited API & Intermediate Business

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Digital & eCommerce

YEAR R 2014

Selected to present at the Web Summit in Dublin, Ireland

Launched iStreet Bazaar

India’s 1st internet Retail Store Set up stores through network partners in Gujarat, Maharashtra & Rajasthan. No of stores - 1,001 as on Jan 31, 2015 Selected as the "Startup of the Year 2014" by Silicon India

YEAR R 2007 2007

Set up online auction stores under the "cash in your attic" program

YEAR R 2008 2008

Evolved the eBay "Trading Assistant" model. Delivered eCommerce to 100s of brands under this model till date

YEAR R 2011

Pioneered flash sales to ship 4,000-6,000 items a day on eBay Managed India’s largest online auction for IPL 2011 involving BCCI & Volkswagen

YEAR R 2012

Created online jewelry configurator and sold loose diamonds online with IDEX India and eBay India Set up "India Street" - Grocery products shipped from India to across the world

YEAR R 2013

Company Name changed to “iStreet Network Limited”

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Retail Landscape

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Retail Modern Retail Digital Retail Evolution of Retail

Developed Countries

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Indian Retail

One of the major pillars 13~15% of GDP

Retail in India

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Indian Retail

~US$500bn

(Rs. 30 lacs crores) Retail in India

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Mom & Pops 91.6% Modern Retail 8% eTailing 0.4%

Retail in India

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950 520 +82.7% 2018E 2013

Retail Market Size (USD Bn)

Source – Industry reports

India Retail – an overview

Organized Retail Penetration 20.0% China India 8.0% Thailand 85.0% 40.0% 30.0% USA Indonesia 6.0% 11.0% 3.0% 4.0% 5.0% 3.0% 8.0% 60.0% Revenue Share in Retail Category Organized Retail 8.0% Unorganized Retail 92.0%

Food & Grocery - 60% Apparel – 8%, Mobile & Technology 6% Food Service – 5%

  • Con. Electronics – 4%

Pharmacy – 3% Jewelery – 3% Others – 11%

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Evolution of Retail - India

India

  • Indian Retail Segment - Mom & Pops Stores, which are traditional family owned

store, 96% of which is less than 500 sq. Feet

  • Modern Retail though expected to be replace mom & pop stores, struggles to

expand its share

  • eTailing started growing since 2010, currently contributing negligible, though

growing at a very fast pace

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Moms and Pop Stores -

the King without Crown

Low operational cost Driven by trust & Quick response 14 million stores Convenient Neighbourhood Store

14 million Mom and Pop Stores in India are consumers’ most trusted point of buying But ... have limited product offering

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Common Man popular image created by Late Shri R.K. Laxman. The same is used here just as a symbol and is not our property.

Common Man buys from ‘Mom & Pop’ store

Common Man of India

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Common Man popular image created by Late Shri R.K. Laxman. The same is used here just as a symbol and is not our property.

  • Common Man may be any person living in Urban, Tier 2,

Tier 3 cities including Villages & towns

  • Common Man has aspirations and hopes
  • Common Man is a follower rather than creator or believer
  • Is 95% of Population of India who have yet not been

touched by eCommerce in its present & available avatar

  • Is largely dependent on Mom & Pop stores for its needs

Who is the Common Man of India

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Common Man popular image created by Late Shri R.K. Laxman. The same is used here just as a symbol and is not our property.

Common Man far away from

  • Modern Retail
  • Digital Retail

Adoption of new formats of Retail

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Confluence of Digital Retail & Indian psyche is a mismatch; it needs an innovative and differentiated platform

Does not have internet connectivity Has Limited access to plastic monies Prefers human interaction while transacting Looks for trust factor while transacting on Internet

95% of Population in India i.e. Common Man

Mom & Pop Consumer

Very low per capita Modern Retail space

Why he has not moved beyond Mom & Pop

Is E-illiterate LFR – Perceived as Stores for select FEWs

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A Revolutionary concept

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iStreet Bazaar is an Internet Retail Store in a neighborhood where a common man can buy products, ONLINE (with assistance)

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Modern Retail – large

  • ffering /

choice Mom & Pop – convenient Stores Digital Retail – driven by Technology

Changing the Retail landscape of India with a unique India centric approach

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iStreet Bazaar – a Physical Digital Amalgamation

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Get Quote

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presentation to life.

Single stop for multiple type

  • f products

Access to Global and Local Brands Facilitating Enhanced Shopping Experience Competitive Pricing Safe, Secure & Authentic Trust with the seller Hassle free & highly convenient Neighborhood Store Assisted eCommerce

Harmonious convergence of Physical & Digital shopping

iStreet Bazaar - Unique proposition

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The model of iStreet Bazaar is a win-win proposition for all stakeholders

  • Low Investment in setting up store
  • Branding & Advertising to be

undertaken by iStreet Bazaar

  • No Inventory Management &

Supply Chain Management

  • Low Risk & Quick to start

Network Partners Brands Customers

Opportunity to cater to 95% of the untapped population of India Business with high return on Investment Access to Global & Local Brands at attractive prices

  • Creation of Brand equity via deeper

Penetration in Indian market

  • Development of Loyal Customer Base
  • Quality Products at competitive

Pricing

  • Wide variety and Choice
  • High level of trust and

familiarity in transactions

Win-Win for all stakeholders

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Physical-Digital Convergence

Few Examples ..

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IRCTC – Assisted eCommerce

  • www.irctc.co.in is a Government website used

for booking tickets for Indian Railways

  • Portal charges a fee on every ticket booked

through the portal

  • Portal has tied up with various agencies such as

Yatra and Make my Trip

  • Recently

portal added flight tickets, hotel bookings, car rentals and tourist packages through its site

  • In FY14 IRCTC sold tickets amounting to gross

value of Rs. 15,400 cr

www.irctc.co.in is a classic case of assisted eCommerce being used to increasingly penetrate deep in the Indian market thereby increasing ticketing revenue and achieve faster growth for the gigantic Indian Railways

  • ~24% of overall gross value of tickets purchased is

via agents, assisted eCommerce

  • Provided immense time saving for passengers due to

avoidance of long ticketing queues

  • Agency model – it got 140,000 outlets and agents

thus creating deeper inroads in to the Indian market

  • IRCTC outlet in both Rural and Urban India brings

~40% volumes with more than 3.0mn transactions per month

  • Agency model created to combat internet illiteracy

in far flung areas as well as trust issues with users

India examples

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Commonwealth Bank of Australia CBA)

  • Launched a program to revamp branch network to improve convenience and service levels
  • Project produced an impressive succession of DIGICAL (Digital + Physical) innovations
  • Project Finest Online modernized CBA’s Internet Banking Service and combined it with in person channels

to eliminate all-too-frequent problems such as inability to link personal accounts to commercial accounts

  • Fusion based strategy propelled CBA to the highest customer-satisfaction ranking for retail banks in 2013
  • CBA’s share price rose 80% from 2006-2014 compared to 9% for S&P/ASX 200 index
  • Competitors taking far longer to emulate the success story of Digical adopted by CBA
  • Menswear Digital retailer Bonobos Counts it offline offline “experiment” a success. Co-founder and Chief

Executive Andy Dunn told the New York Times, “We said we would never be offline, and then, wait a second … we hit a big turning point. We realized offline really works.”

  • Warby Parker stormed onto the scene in 2010 by selling affordable eyewear exclusively online. After

building a flourishing e-commerce business, co-founders David Gilboa and Neil Blumenthal decided to break into bricks-and-mortar in 2013. With eight storefronts across the country, customer service, interaction and community have helped the brand thrive. As of November 2014, Warby Parker’s bricks-and- mortar stores are now collectively turning a profit, selling an average of $3,000 a square foot annually.

Global examples

Source –Harvard Business Review and Magazine Articles

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Project so far …

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Rathodi Village, Malad (W), Mumbai

  • Conducted a pilot program in Rathodi Village, Malad (W) in

June, 2012

  • Rathodi Village in Malad (W) is about 40kms from Mumbai

Main and 2kms away from Malad which is a hub for BPO, KPO and large IT companies.

  • Target – to test the market and gauge common man feedback
  • n this project
  • Put up banners of the offer to create a buzz about the wrist

watches on sale – sale online

  • On the day, sold 40 wrist watches online in 5 hours through

local neighborhood store to the people of Rathodi. All sold

  • nline. All monies collected in advance and watches delivered

after 3 days

eCommerce was simplified for Rathodi villagers who were very near to eCommerce & Tech hub in Malad, yet so far from it.

Common Man of India

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Maharashtra (Western) Since Oct’14 319 store 30 mn people

Rajasthan Since Dec’14 188 store 20 mn people Gujarat Launched in Jan’ 14 494 store 50 mn people

Goa Chhattisgarh Madhya Pradesh

In Progress ...

1,001 (as of 31st Jan, 2015) iStreet Bazaar Stores currently available to ~100mn population

Network Coverage

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Performance Statistics

The unique, out of the box concept of iStreet Bazaar is generating tremendous interest and curiosity amongst customers thereby enticing small entrepreneurs to latch on to the model of iStreet Bazaar leading to growth in Volumes

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Existing Category Pipeline Mobiles Computers Accessories Home Appliances Apparels

  • Focus on Men's &

Women wear categories

Fashion & Lifestyle

  • Include products such as

Wallets, Bags, Sunglasses, Wrist Watches

Thousands of products under 11 categories & 55 sub categories & expanding

iStreet Bazaar – Product Portfolio

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International Recognition in Dublin, Ireland

Received overwhelming response at the Web Summit 2014 held in Dublin, Ireland

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Team

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eCommerceSimplified Pradeep Malu : Founder and Managing Director

  • Chartered Accountant by qualification
  • An eCommerce professional since late 90’s and has set new rules for

business growth using eCommerce

  • Conceptualized and executed large number of eCommerce projects in

B2C, B2B and C2C space

Lakshya Malu : Co-Founder

  • Mechanical Engineer from Boston University, USA
  • Worked with Memorial Sloan-Kettering Cancer Research (NYC) and

Cyber Materials LLC.

  • Handled eCommerce projects of TML, ITC, Videocon, SOTC and others
  • Conceptualized iStreet Bazaar and did pilots / proof of concept to see

how eCommerce can be simplified for common man of India

Promoter Group

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Ratan Jain Internal Audit Professional

  • Qualified Chartered Accountant with over 12 years of experience
  • Oversees and builds System Audits, Internal Audits, Management Audit besides setting up

processes and documents for Finance Department Bhanwar Singh Sales & Operations Navin Rane Human Resources Nagalaxmi Charipalli Branding

  • Has over 9 years of work experience in Retail & eCommerce industry
  • Responsible for expanding Network, Business Development, Sales & Operations
  • Has over a decade of expertise managing core HR functions
  • Responsible for building and developing a pool of talented Human Resources
  • Holds a Masters of Science & Masters of Marketing Management from JBIMS, Mumbai
  • Responsible for marketing & branding activities

Ruchi Seksaria Company Secretary

  • Has over 8 years of experience in areas as Corporate affairs, Legal and Governance
  • Responsible for adopting good governance practices at iStreet

Neha Pednekar Category Development - Technology

  • Has over 7 years of experience
  • Responsible for marketing & branding activities

Management Team

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Financials

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13 Stores 1st Store Launched Jan’14 Feb’14 130 Stores Jun’14 184 Stores Sep’14 Oct’ 14 Items Sold - 226 GMV – Rs. 3.83 lacs Aug’ 14 *All performance numbers are cumulative in nature GMV stands for Gross Merchandise Value Items Sold - 507 GMV – Rs. 7.83 lacs

iStreet Bazaar – Performance*

227 Stores 1,001 Stores Dec’ 14 Jan’ 15 193 Stores 727 Stores Items Sold – 12,604 GMV – Rs. 20.59 lacs Items Sold – 19,398 GMV – Rs. 27.41 lacs

Store Target – 1,400 to 1,500 Stores by March’15 and 3,500 to 4,000 Stores by March’16

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Pharmaceutical & Int. business thru Job Work Sale of underperforming assets of Pharmaceutical & Intermediate business in 9M FY15

Particulars (Rs. Lacs) 9M FY15 Mar-14 Mar-13 Mar-12

Total Revenue 43.3 74.1 51.7 19.7 Pharmaceuticals

  • 13.9

20.6 19.7 Digital & eCommerce 43.3 60.2 31.1

  • Total Expenses

166.4 55.7 24.0 11.6 Raw Material Expenses 24.8 37.9 10.7

  • Employee Benefit Expenses

46.7 7.1 6.8 1.5 Other Expenses 94.8 10.7 6.5 10.1 EBITDA

  • 123.0

18.4 27.7 8.2 Depreciation 12.0 8.4 11.2 10.2 Exceptional Items

  • 268.6

16.5 1.8 4.8 Profit before Tax 133.5

  • 6.4

14.8

  • 6.9

Tax 6.8

  • Profit after Tax

126.7

  • 6.4

14.8

  • 6.9

Profit & Loss

Digital & eCommerce business Revenue

  • Up to FY14 - 3rd party

Platform sales ;

  • FY 15 – iStreet Bazaar

Project Revenue started building

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Particulars (Rs. Lacs) Sep-14 Mar-14 Mar-13 Mar-12

Shareholders Funds 644.6 466.4 472.8 98.0 Share Capital 795.0 795.0 795.0 435.0 Reserve & Surplus

  • 150.4
  • 328.6
  • 322.2
  • 337.0

Current Liabilities 55.8 49.8 30.4 35.0 Trade Payables 2.6 1.4 0.2 0.0 Other Current Liabilities 53.2 48.4 30.2 35.0 Total 700.4 516.2 503.2 133.0 Assets Non Current Assets 36.3 122.7 93.7 116.0 Fixed Assets 35.4 119.5 90.5 101.6 Non Current Investments 0.7 1.2 1.2 1.2 Long Term Loans & Advances 0.3 2.0 2.0 13.2 Current Assets 664.2 393.5 409.5 17.0 Inventories 1.5 0.0 0.0 0.0 Trade Receivables 0.8 0.2 0.2 0.1 Cash & Bank Balances 0.9 2.5 1.2 8.5 Short Term Loans & Advances 162.5 153.5 398.1 0.5 Other Current Assets 498.5 237.4 10.0 7.9 Total 700.4 516.2 503.2 133.0

Balance Sheet

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Future Outlook

FY 14-15E FY 15- 16E FY 16- 17E

Project Launched Jan-14 Population covered 110 - 150 mn 350 - 400 mn 800 – 1,000 mn Geographical coverage (may change depending upon various parameters) Gujarat, Maharashtra (west), Rajasthan, Madhya Pradesh, Chhattisgarh, Goa Vidarbha Maharashtra, Andhra Pradesh, Karnataka, Kerala, Punjab, Himachal Pradesh Rest of India

  • No. of Stores

1,400 – 1,500 3,500 – 4,000 8,000-10,000

  • No. of Fulfillment Centre

2 4 ~ 5 9 ~ 10 Expected Matured No. of stores

  • 30% of previous

close 50% of previous close Expected Average business per Matured store p.a.

  • Rs. 20 lacs
  • Rs. 40 lacs

Initiatives Building capacity Mobile commerce Specialized Store C 2 C commerce DIY Stores

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Company : Investor Relations Advisors : iStreet Network Ltd. CIN - L51900MH1986PLC040232

  • Mrs. Ruchi Seksaria, Company Secretary

ruchi@istreetnetwork.com www.istreetnetwork.com Strategic Growth Advisors Pvt. Ltd. CIN - U74140MH2010PTC204285

  • Mr. Shogun Jain/Mr. Kevin Shah

jshogun@sgapl.net / skevin@sgapl.net www.sgapl.net For further information, please contact