Building Sustainable Internet Retail Enterprise

1. Building Sustainable Internet Retail Enterprise Sandeep Aggarwal Founder & CEO

2. What is ShopClues.com Customer Care India’s first and largest managed marketplace with a platform approach, empowering brands and retailersto exploit the E-Commerce opportunities • Category, product, price, and brand agnostic • Among the top 5-6 Largest E-Commerce company in India and the fastest growing • Company started out of Silicon Valley; operating in India for 12 months • World-class team with 75 years of combined experience in E-Commerce, Internet, and retail • 4million+ monthly visitors; 6k+ merchants, 2k+ brands, 800k+ Facebook Fans

3. Why ShopClues.com? Sellers • Your own branded online store – manage anytime, anywhere on any device • Access to millions of online shoppers • A ready to deploy E-Commerce Technology platform with full suite of E-Commerce services • Effective, low cost, and scalable • Pay only when you sell • Focus on your core competencies, leave the heavy lifting of E-Commerce on us Buyers • Great selection • Low price • Fast delivery • Reliable sellers • Authentic brands • Outstanding customer services

4. E-Commerce Opportunity is Now • India is now the 3rd largest country in terms of Internet population but not revenue top-10 for E-Commerce • E-Commerce has only 0.1% penetration • India hit the tipping point for the E-Commerce adoption in 2010 and next 10 year the market can be 120x bigger – $10bn by 2015 (Rs. 50k Crores) and $60bn by 2020 (Rs. 3 LacsCrores) • Income levels going up, median age 25, Internet adoption widening but accessibility remains a problem • The occupancy cost for brick and mortar retail is one of the highest in the world with not abundant organized retail space • Inherit E-Commerce benefits : very scalable, 24/7, 365 days, wider reach, better inventory management, low capital expenditure, better margins

5. India E-Commerce is Currently at Where China was in 2003 India retail will likely touch $1trillion by 2020 and at 6% penetration (where China was in 2010), the E-Commerce will touch $60bn in India If India were to see E-Commerce adoption like China, India can reach $60bn in GMV by 2015-16

6. E-Commerce Outlook for India Highly Encouraging India E-Commerce Outlook ($bn.) Penetration from 0.1% to 6.0% by 2020 (65% CAGR) • In our view, in India E-Commerce is where US was in 1999 and China was in 2004 • India E-Commerce is in 1st phase with no player over $150mm in GMV (vs. in US, where eBay has $32bn and Amazon has $28bn) • No pure play fully managed marketplace in India currently • We believe that the online shoppers in India will likely go up by 10x from 8mm currently to 80mm and average spend per shopper will go up 5x from $50 to $250 by 2016-17 • E-Commerce in India is leap-frogging the organized retail revolution

7. Building sustainable Internet Retail enterprise • Take a long-term approach • Create a start-up culture • Be ready for capital investments phase • Many offline problems will persist and be ready for new set of problems as well • Solve fundamental issues • Be metric driven • Harness your core competencies & competitive advantage • Understand E-Commerce basics • Do not under estimate marketing cost • Know the power of scale

8. Take a long-term approach • Are you ready for a minimum of 3-5 years of commitment? • Nothing is going to change overnight and offline will remain your “family Mercedes” • Do not be afraid of making mistakes

9. Create a start-up culture • Infuse entrepreneurial zeal and passion • No comingling with your existing business • Ability to attract talent

10. Be ready for capital investments phase • Unless your are a very large retailer or brand, building Internet retail is not cheap • Are you ready for long-term capital investment?

11. Many offline problems will persist and be ready for new set of problems Things do not change with the Internet • Sourcing • Supply chain • Inventory risk New problems with Internet • COD • Higher returns • Pricing pressure • Unchartered territory on many fronts e.g. marketing, payments, delivery

12. Solve fundamental issues • Focus on customer value proposition • Be data driven • Supply chain has to be streamlined • Payment issues are resolved • Return policies are addressed • Packing and delivery experiences is world-class

13. Be metric driven If you can not measure, you can not control • Traffic • Conversion • Items in basket • AOV • Direct Cost • CPA • Cohort • SLA • Thru-put • Other indirect expenses

14. Harness your core competencies & competitive advantage • Sourcing legacy • Up and running business • In-store pick-up • Customer acquisition • Brand • Network • Economy of scope

15. Understand E-Commerce basics

16. Do not under estimate marketing cost • Be ready to loose money on 1st order, barely break-even on 2nd, and perhaps make money on 3rd • Digital marketing mix is not cheap • Buyers have no loyalty

17. Know the power of scale • Allocating resources in anticipation is never easy • Unit cost will be highly unattractive until you achieve scale • Capacity planning will be challenging

18. Thank You!! Sandeep Aggarwal, Founder and CEO sandeep@shopclues.com For your online store at ShopClues.com www.Shopclues.com/sell Sell@shopClues.com