Myntra: B-Plan Summary

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MYNTRA INTRODUCTION

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What is Myntra

Myntra is the one-stop shop for

Creative, unique and personalized consumer products

For individuals, groups, colleges & corporations to creatively express their personality/brand say things to loved ones in style and in essence be creative share a sense of belonging to a thought, a cause or a belief

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Vision

To become the most innovative personalization company in India

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Myntra Team
Name Mukesh Bansal, CEO
(Nov, 06 - present)

Background
IIT-K CSE, 11 yr exp, 4 early stage start-ups [Newscale, Centrata, Ewanted, Nextag], IIT-K, 9 yr exp, Meritos, Mitoken IIT-K, 9 yr exp; Tavant Technologies, Pramati Technologies MBA, McGill, 8 yr exp; Xora, IPTouch, Netcraft MBA, IIM-B, 2 yr exp, Ambit Finance

Expertise
Product Management & Marketing Over 10 enterprise & ecommerce products Performance architect, built app server, designed and implemented proceses Product mgmt and Channel partnerships Investment banking

Ashutosh Lawania, VP Engg.

(Nov, 06 - present)

Vineet Saxena, VP Operations

(Nov, 06 - present)

Raveen Sastry, VP Biz Dev

(Dec, 07 present)

Rahul Agrawal, Dir. Marketing

(Aug, 07 present)

Sankar Bora, VP Sales

(Feb, 07 present)

NIT Engg., 9 yr exp; Tavant Technologies, Trigyn

Managed large projects, events management exp

VP, Marketing [to be hired]

VP, Products [To be hired]

Seasoned marketing professional with strong brand development exp. Product conception, sourcing, R&D

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Milestones

Revenues grew 5-fold during Sep-Apr period [25% month over month] on track to hit US $1 million annual run rate in Q3, 2008

Strategic partnerships with CricInfo, Ibibo, BigAdda, Indyarocks, SabMiller,

Godrej, Kotak Mahindra bank, Centurion Bank, Percept (Hanuman returns)

Strong foothold among designer community

Over 15,000 published designs, 2500+ active designers

#1 in this space in India in terms of traffic [alexa: 1,110] and product offerings Developed capability to handle up to 400 unique orders per day

Great success in hiring talented individuals who are working well as a team;
total team size: 22 people

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Story so far
Founding Team, $75K start-up capital Company Incorporation Launched the beta site Closed the seed round [200K] Active Marketing, Revenue of Rs 2 lacs/month Launched the affiliate program

Crossed Rs 10 lacs/month revenue

Market Launch Bridge Round (400k)

Nov, 06

Feb, 07

May, 07

Sep, 07

Oct, 07

Nov, 07

Jan, 08

Feb, 08

Apr, 08

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Story ahead
Close Series A Funding Achieve $1 million run rate 50 brand shops live Achieve 10,000 visits/day Cross $350K in quarterly revenue Start sales office in Delhi/NCR region

Get 20K+ online orders for Valentine/Holi

$1.25 million revenue for 08/09

Aug, 08

Sep, 08

Oct, 08

Nov, 08

Dec, 08

Jan, 09

Feb, 09

Mar, 09

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MARKET

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Relevant Market Data - India

Total addressable personalization market is over $ 1.2 billion Growing 20% per year Personal Gifting Over 10,000 gift shops in India Archie's has about $25 million revenues. Revenue expected to double by 2010 Over 100 personalization kiosks doing about $10 million business Corporate Gifting Total corporate gifting market is about $2 billion Top 10 cities having multiple players in the $10-$25 million range Merchandize Bollywood merchandize is expected to be $200 million business by 2010 Major growth expected in sports merchandize as an influence of franchise model for cricket

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Market Trends around the world

Personalized gifting market in US is estimated to be over $27 billion Hollywood, Colleges, Corporate Online personalization companies in US are growing rapidly Zazzle going from $20 million to $80 million in 2 years Cafepress did $120 million in 2007, expected to grow 30% this year Over 10 companies at $10 - $30 million revenue rate; growing rapidly Accelerated Innovation in personalization space Direct printing /Sublimation technologies have improved drastically over last 4 years. Toys/Kids products are one of the fastest growing categories

Buildabear.com is at $500 million revenue Mytwinn has built a multi million dollar business in few years

Personalized photo-books, bags, watches, furniture etc. are becoming popular

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Key Market Insights/Trends

Individuals People making over Rs 20,000 per month tend to give 5-10 gifts/year People spend considerable amount of time/money for a unique gift
Willing to pay a premium for their gift to stand out.

Individualization is increasing among the youth

Strong desire to stand out from the crowd

Groups Companies /Colleges keen on having online interface for merchandize Strong demand for creative designs for group merchandize. The groups business with companies/colleges is very repetitive.

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Target Market Segments

Individuals
> 5,000 orders
25% of Revenue

For creative self expression Unique products for gifting occasions Unique memorabilia for group/event Creative designs for shared cause/expressions

Groups
[teams, friends, clubs, parties, events] > 300 orders, 15% of Revenue

Organizations
[companies, colleges, websites] > 115 orders, 50% of Revenue

Creative merchandize for events & celebrations Institution specific branded shops
Creative promotional items for brand visibility Increase stickiness of brand sites

Brand Managers
30 orders 10% of revenue

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Segment Engagement Model

Segment
Individuals

Marketing
Affiliates, SEM, SEO, Referrals
Affiliates, SEM, SEO, Private interface Direct marketing, trade fairs Direct marketing, trade fairs

Sales
Myntra.com, Offline POS
Tele sales, gradually moving to online Direct sales

Mode
Online, Offline
Online, Intranet, Offline Intranet, Offline Online, Offline

Payment Fulfillment
Credit card, Net banking, Check, Cash
Credit card, Net banking, Check, Cash Cheque, bank transfer Cheque, bank transfer

Inhouse, Outsourced
Inhouse, Outsourced

Groups

Organization

Inhouse, Outsourced Inhouse, Outsourced

Brand Managers

Direct sales

Product Requirements for Segments Individuals Self created designs or published designs Products that can be individually personalized Groups, Organizations, Brand Managers Custom designs based on a theme Much bigger set of products

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Market Traction
Partners

Organizations

Consumer Traction
300K page views/month 25K registered users Over 5000 orders Orders from 400+ cities Peak of 250 orders/day

IIM - BLR
IIT - KGP

15,000 designs 2,500 designers

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Industry Landscape
Offline Kiosks Online Players Product Retailers Corporate gifting players
Photo sharing sites Pure play personalization Myntra [leader], dilsebol, hepfly, inkfruit, pringoo Online presence Pre-designed products, e.g. Tantra t-shirts Retail stores Small to medium scale family businesses 4-5 big players in each top 10 city Long term accounts, strong sourcing capabilities

Profile

Small boutique shops with local operations Malls & Big Cities

Start-ups like PicSquare, Itasveer, zoom.in, canvera Online presence

Presence

Strengths

Targeted & Focused Offering

Gaining mind-share as online photo printing grows

Focusing on building the platform for ondemand personalization Small teams, scaling up will be a challenge

Fashion Designers, distribution network Limited set of products, predefined designs

Weakness

Limited Reach, Pre-defined designs

No design library

No technology, no design capability and no personalization

Threat

Medium

Medium

High

Low

Medium

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Competitive Comparison
Company Alexa
(in India)

Designer Community
Yes No Limited Yes No Yes

# Published Designs
15,000+ < 1000 < 300 <100 N/A 1,700

# Personalization Products
18 products 10 products 4 products Only t-shirts Only t-shirts 7 products

Online Affiliates
Over 20 affiliates none 3-4 colleges none none none

Pure play personalized merchandize companies

myntra.com xtees.com dilsebol.com Gnome.in Hepfly.com Pringoo.com 1,147 15,003 33,112 62,867 38,669 5,343

Photo printing companies

Picsquare.com
Itasveer.com Zoom.in Canvera

3,083
9,319 3,475 65,487

No
No No No

N/A
N/A N/A N/A

T-shirt, Mug and photos

T-shirt, Mug and photos T-shirt, Mug and photos Specialty Photo product

none
none none Offline photographers

Corporate gifting players

All top ten cities in India have 3-6 corporate gifting players in the range of $5million to $20 million revenue.

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PRODUCT OFFERING

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Product/Service Offering

Create your own product

Buy from design library

Sell your designs

Our Products

T-shirt

Greeting Card

Polo T-shirt

Key-chains

Posters

Mugs

Coasters

Diary

Plate

Watch

Teddy Bear

Pendants

Piggy Bank

Pencil Box

Sweatshirt

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Product Strategy
Continuous product innovation

Enable personalization for new products Offer trendy and fresh products Provide new parameters for personalization Increase margins steadily High to premium pricing Strive for exclusivity in product offerings Rich and topical design library Keep the content current, trendy and fresh Cater to diverse customer tastes

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Personalization Platform
Individually personalized products

Hosted niche merchandize portals

Content monetization for affiliates Personalized groups gifting

Platform for on demand customization

Designer Community Customization tools Licensed Content

Myntra.com portal

Automation Product R&D

Processes

Supplier Network Sourcing

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Entry Barriers
Designer Community: There is a huge first movers advantage in building a loyal designer community Affiliate Partnerships It takes considerable time and effort to build a large number of active affiliates and the cost for switching is very high for affiliates Back-end Automation Mass personalization requires highly efficient and automated operations/sourcing which can only be built over a period of time Brand Building a consumer brand takes time and overcoming this will be a big challenge for a new entrant

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SCALING THE BUSINESS

AND

EXPANSION PLAN

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Business Model
Margins by product category/segments: (Rs 100 Rs 500+ per item)
Product Categories
Apparel Ceramics Paper based New Products

Individuals (online)
50% 60% 60% 65%

Individuals (offline)
55% 70% 50% 65%

Groups (10-50)
35% 50% 35% 40%

Groups (50-200)
20% 25% 20% 30%

Gross/Net margins by fiscal year

08-09 Cost of Goods Gross Margins Sales & Marketing G&A Net Margin 61% 39% 40% 48% -49% 09-10 49% 51% 25% 32% -6% 10-11 45% 55% 25% 23% 7% 11-12 44% 56% 20% 19% 17% 12-13 43% 57% 20% 16% 21%

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Expanding the market presence

Establish online interfaces for colleges, companies and websites

200 by end of FY 08-09 - >20 lacs/month 500 by end of FY 09-10 -> 50 lacs/month

Expand offline POS and Kiosk presence

15 by end of FY 08-09 >30 lacs/month 50 by end of FY 09-10 >1 crore/month

Establish sales/marketing presence in other cities

3 cities by FY 08-09 -> 60 lacs/month 6 cities by FY 09-10-> 1.5crore/month

Scale up the direct online traffic

15,000 visits/day by FY 08-09 -> 15 lacs/month 40,000 visits/day by FY 09-10 -> 50 lacs/month

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Cash-flow projections

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Product Roadmap
Personalization Products Functional Roadmap

Toys Sports Accessories School Supplies Fashion Accessories Home Decoration Items Learning Kits Virtual Creations

Photo products interface Plug-ins for social networks Designer marketplace Mobile interface Self Service affiliate set-up Promotional tools for designers Premium designer shops

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Challenges

Scaling this business requires very sophisticated operations

and distribution logistics

Expanding across geographies and products requires process innovation and automation on a large scale

A large chunk of our target market is still offline or available via indirect channels requires innovative sales channels

It is imperative to introduce new products on a regular basis

to command premium pricing

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OPPORTUNITY SUMMARY

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Opportunity Assessment

The burgeoning middle class with disposable income is ready to lap-up the personalization products The gifting market is going through a major re-haul and ready to accept new innovations. The college/corporate merchandize business is highly inefficient & fragmented.
Can be readily captured using smart solutions/products

Bollywood and Cricket merchandize markets are grossly untapped in India.

Both are all set for rapid growth over next few years.

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Exit
We plan to file for IPO in year 2012 when we would be cross

USD 50 million in revenue [expect 3-6x revenue multiple]

There are a few other exit possibilities including:

A foreign player entering Indian market E.g. cafepress, zazzle etc. Content rich web properties looking to monetize content/traffic e.g. Bigadda, Ibibo etc. Companies betting on online ecommerce in a big way E.g. Reliance retail, Futurebazaar.com

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APPENDIX
(Supporting Slides)

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Organization: Employees

Employees Team Strength: 22

Product Engg: 5, Marketing: 3, Sales/BizDev: 5, Operations: 8, CEO/HR: 2

5 employees from IIT, 2 from IIM, 1 from McGill (MBA), 1 from REC Board Sasha Mirchandani [Mumbai Angels] Gagan Kumar [Erasmic] Mukesh Bansal [Myntra] Ashutosh Lawania [Myntra] Advisors Shantanu Bhagwat: Amadeus Capital Priyank Garg: Director Search, Yahoo Rohit Agrawal: CEO, Techtribe Networks Shiva Kumar: CEO, Apparatus Media Labs

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Share-holding

We have also raised USD 400K in April, 08 as a bridge round that will convert into equity as part of next round

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Capital

We will plan to deploy $4 million over next 2.5 years in following fashion: Sales/Marketing presence in 15 cities: $0.8 million 100 Physical Kiosks/Mobile Units: $1.0 million Myntra website, platform usability/scalability: $0.4 million Product Sourcing/R&D: $0.3 million Capital Equipment: $0.7 million Brand Development/Strategic Marketing: $0.5 million Establishing 1000 sales agents: $0.3 million

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Sales Channels
Channel
Online - Direct Online - Affiliates

Description
Customers buying directly at the myntra.com portal Customers buying through affiliate site such as another content site, alumni site, company intranet, event site etc.

Sales Agents

Designated agents in gift shops, colleges, event managers and social groups for incentives based sales
Direct sales force signing companies, colleges, event management companies and gift shops as customers Point of sale at various gift shops and novelty stores where customers can browse designs via a terminal and place the order that is fulfilled centrally Kiosks in malls, retail outlets, college and company campus. Kiosks will display various product samples and have limited fulfillment capabilities

Sales Team

Offline POS

Kiosks

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Monthly Metrics [Sep,07 to May, 08]

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Market Size
Market Individuals Segment IT/BPO Professionals College Students Non-IT Professionals Kids # Users 2 million 10 million 15 million 10 million Avg. spend per person $50/year $25/year $20/year $20/year Market Size $100 million $250 million $300 million $200 million

Total $850 million

Market Groups Segment Project teams Parties/Events Colleges Schools # Groups 0.2 million 2 million 10,000 50,000 Avg. spend per group $250 $100 $2,500 $1,000 Market Size $50 million $200 million $25 million $50 million

Total $325 million

Total Addressable Market $1175 million

We expect that the overall market is growing 20% per year and will double in 4 years

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Differentiators
Creative Content
Largest community of designers Regional and local language content Licensed content from entertainment industry

Customer Experience

Great user experience at myntra.com site Diverse range of top quality products Outstanding customer service

Scalable Operations

Back end automation for efficient operations Integrated supplier inventory for low operations costs Process innovations for scalable fulfillment

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Value Proposition

Individuals Large number of product categories for on-demand customization Designer community offering current, topical and relevant designs High quality products and excellent customer service

Groups

Get a private interface for branded merchandize of the organization

Use our design services for creative designs for merchandize Individual personalization for group gifting