2

This presentation (Presentation) has been prepared by PepsiCo India Holdings Pvt. Ltd. (PepsiCo.) collectively, with any officer,
director, employee, advisor or agent (Preparers) for Become Indras Advisors Contest (BIAC).
This Presentation is exclusively for the purpose of guiding the persons registering themselves for participating in BIAC (Participants)
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obligation to update any of the information contained in the Presentation or to correct any inaccuracies that may become apparent.
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Disclaimer for
Become Indras Advisors Contest
3

It is that time of the year again, says Shiv. He has just been through a patient week
listening to a number of presentations from his team serving up plans for the coming
year. It is now time to make those tough choices where should he resource ahead of
the curve?

India is an exciting market, and has always been a key focus area for PepsiCo. Among
the many exciting opportunities presented, one of those Shiv finds himself thinking
about often is the exciting e-commerce arena.

Globally this channel is on the rise, and this is now finally taking shape in India too. The
buzz around this is evident and Shiv sees a strong resonance for this opportunity.
Clearly, there is something here that merits serious attention and resourcing!

Inviting Indias brightest young minds to help PepsiCo India make the most of this
opportunity!


Indra is waiting to hear from you!

4



How should PepsiCo India seize the e-commerce business
opportunity to become a Leading Edge FMCG Player in
e-commerce by driving incremental & profitable growth in the
short term and a scale business model in the long term?




What is the best end-to-end profitable business model solution(s) to
leverage our brand, manufacturing and sales assets, to ensure we gain on
every front viz.
Volume and Value
Consumer engagement
Corporate equity
Channel engagement


The question you are invited to
help us answer
5
Contents
The Opportunity
About E-commerce Today
Some Inspiration from Other Countries
How We Will Evaluate You
1
2
3
4
Appendix
5
6
Appendix
Contents
The Opportunity
About E-commerce Today
Some Inspiration from Other Countries
How We Will Evaluate You
E-commerce size and growth
Factors propelling E-Commerce in India
Grocery e-tailing
Opportunity for PepsiCo
Framework for Growth: E-consumer, E-frastructure, Eco-system

7








Globally, ecommerce growing exponentially
1.058
1.251
1.505
1.771
2.053
2.357
2012 2013 2014 2015 2016 2017
Source: eMarketer
Worldwide Business to Consumer (B2C) Ecommerce sales to reach $1.5trillion

Growth stemming from:
- Expanding online/mobile user base in emerging markets
- Increase in m-commerce sales
- Advanced shipping/payment options
- Major brands enter into international markets
B2C Ecommerce Global Sales (Trillion $)
8








Paradigm shift in sales by region
301.2
379.8
277.5
41.5
37.6
20.6
1052.9
660.4
445
73
74.6
51.4
B2C Ecommerce Global Sales (Billion $), by Region
2012
2017
Asia
Pacific
North
America
Western
Europe
Central
Europe
Latin
America
Middle East
& Africa
Trends point towards rise of Asia Pacific as worlds largest regional ecommerce market

China tipped to overtake US as the largest ecommerce market globally

India thought to be at the inflection point of growth burst, similar to the Chinese story
Source: eMarketer
9








Young Digitally Savvy Indians are
Experimenting Online
Deeper penetration of smart
phones students, women, tier 2
towns; who are accessing social
media and entertainment through
mobiles

Online time spend on non email
activities on the rise; music/ movie
downloads, gaming and e-
commerce being the top 3 activities
online now
10
Retail ecommerce sales on the rise









E-com sales in India on a growth
trajectory








1995 Launch of internet via dialup in 6
cities

1996 Launch of online B2B portals
Launch of online matrimonial

1997 Launch of online job portals

2000 Dotcom bubble

2006 Launch of online travel agents

2007 Entry of a number of players in
e-tailing

2010 Launch of 1
st
group buying
website

2013 E-tailing emerges as a segment
in Indian ecommerce industry
Amazon ventures into India
193
262
351
473
630
FY'09 FY'10 FY'11 FY'12 FY'13
Boom in ecommerce industry in India
INR Billion
11
Factors propelling ecommerce growth in India
Increase in online penetration through the mobile
Rise of the middle class/
High disposable income
Busy lifestyle/ lack of time
Lower unit prices/ Sales
Heavy Media Activity
B
u
s
i
n
e
s
s

C
o
n
s
u
m
e
r

Cash on Delivery
12
While travel dominates, consumers getting
hooked to e-tailing across categories
TRAVEL
E-TAILING
FINANCIAL
SERVICES
CLASSIFIEDS
449.07
100.04
36.07
30.61
0
Source: eMarketer
13

With growing consumer intent to buy groceries online, FMCG is expected to ride on
ecommerce band wagon

Sensing the potential, major category players are getting into the space through existing
regional online grocery stores like BigBasket.com & Aaramshop.com
Grocery e-tailing is also beginning to open up
14
For PepsiCo, Ecommerce could build both
revenue and consumer engagement
Growing Volume Potential
Access to tough-to-reach consumers
Drives Innovation and Core
Drives Consumer engagement
Core brands x Bulk delivery; and Niche SKUs x
Targeted marketing

HNIs, People on
the move, Tier 2
towns, Rural,
Gated
communities all
are accessible
Already today
more Mobile
phones sold
today online
than in retail
stores
Allows controlled quality brand activations in
the right mood and time
15
Increasing presence on
Facebook & Twitter
Cutting Edge
Digital Platforms-
Blogs, Apps, Programs
Accolades for
Social Media Use

Regular
Brand Activations

DIGITAL OPINION LEADERS
In India, PepsiCo is in the process of
building a strong digital presence
16
-

P
r
o
f
i
t
a
b
i
l
i
t
y

+

- Branding +
Cinemas
X
13 17
(MM) 8 oz
X
Grocery Stores,
Convenience
stores
X
X
*size of the bubble indicates volume
E-commerce provides PepsiCo an important
channel to drive BOTH profitability and branding
X
X
QSRs
X
E-commerce
17
Day Part
Portfolio
FACT #2
90%+ of PI business from CSDs & Potato
Chips
FACT #3
70% of industry sales is skewed to Youth
on the Go
FACT #1
80%+of PI business comes from mid
afternoon to late evening
Breakfast
Lunch Dinner Evening
Defining new paths to grow for PepsiCo
Consumer








Grow beyond mid afternoon and evening
Grow beyond CSDs & Potato Chips
Grow beyond youth on the go
18
Click to edit Master title style
Examine the WIIFM* for each of the
3 key players
E-Consumer
Eco- System
E-frastructure
*
WIIFM: whats in it for me
Who is he? Whats his life like? Where is he?
What is he doing there?

What is he looking for from e-commerce?

What is the interaction with our categories
today?

How is the digital shopper different from the
consumer / shopper of our categories ?

How is the digital shopper going to change /
evolve over time?


19
Click to edit Master title style
Examine the WIIFM* for each of the
3 key players
E-Consumer
Eco- System
E-frastructure
*
WIIFM: whats in it for me
What new partnerships will we want to
build? Who are the dominant players?
Who are the enablers/ possible
partners in this journey?

What product adjacencies should we
look to?

What does their current business thrive
on? What can be the possible role of
our products to them?

How can we drive competitive
advantage for our partners?
20
Click to edit Master title style
Examine the WIIFM* for each of the
3 key players
E-Consumer
Eco- System
E-frastructure
*
WIIFM: whats in it for me
How (in whole or in parts) do we leverage
our existing go-to-market assets?

What can we do to bring down the cost to
serve the consumer?

What new capabilities, talent and assets
will we need to build in the digital and
technology space?

How will this impact our existing
customers (retailers/ modern trade) and
how can we balance the play across
channels?

What would be the impact on company
culture and ways of working to enable
working in this environment?

21
Click to edit Master title style
Appendix
Contents
The Opportunity
About E-commerce Today
Some Inspiration from Other Countries
How We Will Evaluate You
Current business models in E-commerce
Grocery portals
Network for 3
rd
party delivery
Own portal
Modern trade foray
Some challenges to consider

22
Possible business models that
PepsiCo can leverage
Model 1: Partnerships with Existing Grocery Portals
Model 2: Network with existing retailers and 3
rd
party delivery
Model 3: Set up own portal
Model 4: Leverage Modern Trade players foraying to e-comm.
23
Model 1: Partnerships with Existing
Grocery Portals
Globally, online grocery retail growing 7 times faster than on-ground formats
Gaining traction in India as well

Major category players- BigBasket.com, LocalBanya.com


PepsiCo can leverage network of existing grocery portals in India











Pros - Incremental consumers
- Trial generation opportunity
Cons - Lower control
24
Click to edit Master title style
Model 2: Ecosystem network with existing
retailers and 3
rd
party delivery
Hybrid retail platform- Flipkart, Amazon, Aaramshop

AaramShop leverages strength of neighborhood retailers & integrates them with opportunities
provided by the internet
Business model based on premium services to brands
- Advertising on and off the platform
- Analytical led marketing
- Marketing at the retail point








Pros - Existing network
- Can be leveraged for grocery outlet

Cons - Lower control
- Higher costs
Consumer
Aggregator- Flipkart, Amazon, Aaramshop
PepsiCo warehouse
25
Click to edit Master title style
Model 3: Own portal
FMCGs in India keen on leveraging boom in ecommerce via own portals


Major FMCGs- ITC, HUL, Coke2home, Dabur











Pros - Opportunity to deeply engage with consumers 360
- Trial generation
- Higher control

Cons - Higher cost
Consumer
Own Portal
PepsiCo Delivery mechanism
26
Click to edit Master title style
FMCGs targeting ecommerce space in India
ITC
Operates kitchensofindia.com to sell
food products
Dabur
Recently launched daburuveda.com
to sell skincare products
Coca-Cola
Pilot on home delivery service
online
27
Click to edit Master title style
Reliance Industries venture into
ecommerce
Entry into ecommerce through
grocery

Plans to offer express deliveries of
fresh fruits/vegetables to
consumers directly in Mumbai

Future plans on selling consumer
electronics through ecommerce











Walmarts foray into B2B e-
commerce platform
Pilot launch of online platform for
Best Price Modern Wholesale
stores in Hyderabad/ Lucknow




Initiative aimed at enhancing
experience by integrating physical
and digital store presence









Model 4: Modern Trade embracing
Ecommerce
28
Some challenges to consider in designing
appropriate business model (s)
Current cost to deliver through e-commerce is high
(approx Rs.60-80 per kg)
Our Go to Market assets are heavily stretched,
especially in season
Growth should be incremental,
not at the cost of existing business drivers
Role of e-commerce vis other channels should be
complementary, avoid channel conflict
1
2
3
4
Rethinking demand generation & marketing in a digital
environment will need different tools & mindset
5
Document Title Goes Here 29
Appendix
Contents
The Opportunity
About E-commerce Today
Some Inspiration from Other Countries
How We Will Evaluate You
China
South Korea

Document Title Goes Here 30
BY 2015, CHINA WILL BE 1.5X
USA IN E-COMMERCE
By 2015, China will be 1.5x USA
in E-commerce
31
Chinas growth in ecommerce enabled by
fundamental shifts
E-frastructure: Leapfrog over
Offline

98% broadband penetration due to
affordability







51% vs 13%- Internet access
outpaces physical infrastructure








E-consumer: E-shopping as daily
life

>1 in 4 shop online
36% holiday shopping is online






7 cents of every retail dollar spent
online- going up to 60% for key
categories










32
E-cosystem: Enabled by
complementary services

$1 vs $6- cost of shipping 1kg
parcel in China vs US





Massive influx of capital









Enabled by the ecosystem in China
E-tailer-
Gold rush for growth
From $3 bn in 2009 to $29bn in
2011
Emergence of multiple players






Yihaodian fastest growing company
in China












33
BY 2015, CHINA WILL BE 1.5X
USA IN E-COMMERCE
South Korea is powered by
Innovative Technology ideas
34
The most connected place in the world

South Korea is the most connected place on earth with nearly 80% of population
online


Fastest internet speed in the world with an average connection rate of 13.3 mbps








More credit cards than any other
country
People love their credit, owning an
average of 5 cards per person,
slightly more than 2 cards per
person in the U.S.








South Korea stands out on opportunity in
ecommerce
Retail ecommerce sales on the rise









19
20.8
22.3
24.4
25.3
2013 2014 2015 2016 2017
Source: Borderfree
Source: Borderfree
Source: Borderfree
B
i
l
l
i
o
n

d
o
l
l
a
r

35
Cutting edge Digital POSM and
Displays encourage e-tailing
36
Appendix
Contents
The Opportunity
About E-commerce Today
Some Inspiration from Other Countries
How We Will Evaluate You
Questions to Answer
Evaluation criteria

37




How should PepsiCo India seize the e-commerce business
opportunity to become a Leading Edge FMCG Player in
e-commerce by driving incremental & profitable growth in the
short term and a scale business model in the long term?




What is the best end-to-end profitable business model solution(s) to
leverage our brand, manufacturing and sales assets, to ensure we gain on
every front viz.
Volume and Value
Consumer engagement
Corporate equity
Channel engagement


Recap: The question you are invited to
help us answer
38
With details around
Who is the digital shopper today? How is the digital shopper different from a shopper
of our category? How is this going to evolve over time?

How should PepsiCo leverage the e-commerce space to sell the portfolio range-
both core brands and niche SKUs (innovation, health and wellness, premium); across
both beverages and foods portfolio?

How can we dial up reach and consumption frequency for our brands by tapping into
unmet needs; and leverage the channel to build consumer loyalty & engagement?

What is the optimal Go-to-market solution(s) encompassing both large and small
town India? How is this going to evolve over time? How do we minimize channel
conflict?

How can we build an eco-system of partners (both in physical and digital/ social
media space), who all mutually benefit and leverage each others strengths?

What kind of digital capabilities, talent and assets will we have to build and grow to
be successful? How will this impact the company culture and ways of working?

What is the P&L impact of the solutions you have? Both short term and longer term?

39
How we will Evaluate you
NOT MORE THAN 5 PAGES PER ENTRY
Will be entertained for the first shortlist.

If shortlisted, you will get the chance to submit a more detailed entry for the next round.

Evaluations will be on the basis of:
1. Appreciation of the business problem
2. Power of Insights identified for the situation analysis
3. Futuristic thinking with P&L workings
4. Creativity and Feasibility of solutions proposed For PepsiCo and Partners
5. Clarity of articulation/presentation

IDEAS THAT DRIVE REVENUE PROFITABLY WILL BE GIVEN HIGH WEIGHTAGE


40
Appendix
Contents
The Opportunity
About E-commerce Today
Some Inspiration from Other Countries
How We Will Evaluate You
Manufacturing footprint
Delivery model
Brand strength

41
4
1
Plant
Distributor
Wholesaler
Retailer Retailer
Urban spoke Rural spoke
Retailer Retailer
Hub
Plant
Distributor
Wholesaler
Retailer Retailer
Rural spoke
Retailer
Hub
DC
How do we do business today- PepsiCos
structured Make-Sell-Deliver model
42
Our Brands own priceless image and
associations
Core
Classics
Healthier
Local Palate