MDI_Entrepreneurship PPT_28 Jan 2015.pdf

Entrepreneurship An enriching Experience !!!

SUNIL!AGRAWAL!C&MD,!VAIBHAV!GLOBAL!GROUP!!

VGL Group How It all started

! !

Started!as!a!Gemstone!dealer!

Ventured!into!Gemstone!manufacturing!!

VGL!went!Public,!raising!Rs.709.50!lacs!@!premium!of!Rs.20!per!share!!

Setup!Jewellery!Manufacturing!as!a!B2B!vendor!

Moved!to!USA!

First!Attempt!at!ETcomm!place!!2Umbrellas!

Went!to!college!again!in!NY,!USA!

Warburg,!one!of!leading!PE!firm,!acquired!27%+!equity!in!VGL!

Retail!stores!at!intl!tourist!destinations,!like!Alaska!&!!Caribbean!

Legal!Issues!(Indictment)!by!US!Govt!

1980

1996

1997

1982

1998

2001

2006 EntrepreneurshipA Journey

2002

2005

2005-07

TV/Web!Retailer!

Nalanda!India!Funds!Ltd!invested!$!25!mn!in!the!company!

Restructuring!due!to!the!financial!meltdown;!CDR!

Discovered!Discounted!Electronic!Retail!Format;!transformation!from!!B2B!into!B2C!Format!

Outsourced!CallTcentre!for!TJC,!UK!

Ventured!into!Lifestyles!Products!segment!

Outsourced!CallTcentre!for!LC,!USA!

2006-07

2009 2010

2014

The Journeycontinues

2008

2013

2007

VGL Identity

Mission!

Core!Values!

Vision!

!! To!be!the!Value!Leader!in!Electronic!Retailing!of!Jewellery!and!Life!Style!Products!

!! 1.!!Team!Work!!!2.!!Honesty!

3.!!Commitment!

4.!!Passion!

5.!!Positive!Attitude!

!! 1.!!Build!a!Learning!Organisation!with!High!Performing!People!

2.!!Offer!Low!Priced!High!Quality!Products!

3.!!Delight!Our!Customers!Every!Day!

VGL Business Model

1.!!Own!manufacturing!to!the!extent!of!50%!of!COGS!

2.!!Sourcing!from!base!component!Cost!perspective!

3.!!Tight!control!on!operating!costs.!

!!!

Vertical!Low!Cost!Model!

Tight!Inventory!Mgmt!

Customer!Engagement!

CallUtoUaction!

Deep!Value!Perception!

Integrated!TV!&!EU

commerce!Business!

Introduction!of!New!Products!

VGL Business Model

1.!!Inventory!of!over!One!year!COGS!in!2010!to!100!days!in!2014!

2.!!Strong!Tail!Exit!mechanism!using!Reverse!Auction!

3.!!Test!trend!spotted!products,!go!deeper!with!proven!products!




CallUtoUaction!


Integrated!TV!&!EU

commerceBusiness!


VGL Business Model

1.!!3Rs!!Reach,!Retention,!Repeat!Purchase!

2.!!Fascinating!Story!Telling!mechanism!about!the!product!

3.!!Highly!interactive!&!fun!shopping!experience!for!the!customers!

!!!




CallUtoUaction!


Integrated!TV!&!EU

commerceBusiness!


VGL Business Model

1.!!Fast!paced!process;!creating!frenzy!among!customers!by!inducing!a!sense!of!loss!

2.!!Peer!Pressure!to!stay!in!fashion!with!updated!trends!

3.!!Impulse!Purchase!due!to!low!prices!and!money!saved!aspect!

!!




CallUtoUaction!


Integrated!TV!&!EU

commerceBusiness!


VGL Business Model

1.!!Start!price!is!usually!competitors!price!for!similar!product!5U8!times!!!!!!!!!!!our!final!price!2.!!Average!price!point!of!$20!against!$60!of!competitors.!!

3.!!No!returns!below!$200!price!points!!

4.!!Excellent!value!for!the!price;!much!based!on!exceptional!sourcing!abilities!

!!




CallUtoUaction!


Integrated!TV!&!EU

commerceBusiness!


VGL Business Model

1.!!TVs!Push!and!Webs!pull!works!simultaneously!for!differing!needs.!LTV!of!multi!channel!customer!in!US!is!over!3x!of!TV!or!Web!alone!

2.!!Over!50%!of!VGLs!web!sales!is!actually!exit!of!TVs!tail!products!

3.!!Very!high!social!media!presence!(!345k!likes)!funnelling!customers!to!web!and!TV.!!

!!!




CallUtoUaction!


Integrated!TV!&!EU

commerceBusiness!


VGL Business Model

1.!!100!New!products!EVERY!DAY!helps!high!repeat!purchase!(Q22014U15!UnitsUsoldUtoUuniqueUcustomers!!ratio!!=!17.4)!

2.!!Over!200!strong!product!development!and!merchandising!team!across!VGL!Group!

3.!!We!are!trend!spotters!and!not!trend!setters.!

!!




CallUtoUaction!


Integrated!TV!&!EU

commerceBusiness!


AWARDS & RECOGNITIONS

2015 1) Fastest Growing company by Gems & Jewellery Export promotion Council

2013 Indian Gems & Jewellery Award; category Silver Gems & Jewellery Export Promotion Council

2010 Highest Export Award in Gems & Jewellery - Gems & Jewellery Export Promotion Council

2007-08 Highest Export Award in Gems & Jewellery - Gems & Jewellery Export Promotion Council

2005-06 CNBC Emerging India Award, Gems & Jewellery Category by CNBC TV18 & ICICI

1985-2005 .Multiple awards

1985 1st award as a company by P. Chidambaram

Financial Performance

! !

Revenues Trends

FY11! FY12! FY13! FY14! 6M!15!

115! 134!164!

215!

104!

Revenues!($!Million)!

FY11! FY12! FY13! FY14! 6M!15!

10! 15! 22!37!

19!

Web!Sales!

FY11! FY12! FY13! FY14! 6M!15!

87! 100!126! 151!

74!

TV!Sales!

FY11! FY12! FY13! FY14! 6M!15!

19! 19! 16!27!

10!

B2B!Sales!

Jewelry!&!Lifestyle!Products!

23%!CAGR!

20%!CAGR!55%!CAGR! 13%!CAGR!

Retail Trends

16!

6M!15!FY14!FY13!FY12!FY11!

!3,156!!

!6,420!!!5,239!!

!3,268!!!2,039!!

Sales!Volumes!('000s)!

6M!15!FY14!FY13!FY12!FY11!

!23!!!24!!!23!!!30!!

!41!!

Average!selling!price!US$!

TV!Sales!

Web!Sales!

6M!15!FY14!FY13!FY12!FY11!

1,401!

!2,955!!

!1,700!!!762!!

!357!!

Sales!Volumes!('000s)!

6M!15!FY14!FY13!FY12!FY11!

!14!!!13!!!12!!!19!!

!27!!

Average!selling!price!US$!

47%!CAGR!

102%!CAGR!

Margin Trends

55%!

59%! 60%!61%!

63%!

50%!

55%!

60%!

65%!

!T!!!!

!50.00!!

!100.00!!

!150.00!!

FY11! FY12! FY13! FY14! 6M!15!

Gross!Profit! Gross!margin!$!Million!

Note:&&EBIDTA&excludes&exchange&gain/loss;&&

15.6!17.9! 14.8! 26.1! 10.7!

13%!

13%!

9%!12%!

10%!

0%!

5%!

10%!

15%!

!T!!!!

!10.00!!

!20.00!!

!30.00!!

FY11! FY12! FY13! FY14! 6M!15!

EBITDA! EBITDA!margin!$!Million!

Profit Trends

0.29!0.48! 0.44!

0.80!

0.13!

!T!!!!

!0.50!!

!1.00!!

FY11! FY12! FY13! FY14! 6M!15!

EPS!!$!per!share!$.!Million!

9! 16! 14! 25! 8!

8%!

12%!

8%!

12%!8%!

0%!

5%!

10%!

15%!

!T!!!!

!10.00!!

!20.00!!

!30.00!!

FY11! FY12! FY13! FY14! 6M!15!

PAT! PAT!margin!

Balance sheet Trends

FY11! FY12! FY13! FY14! 6M!15!

45! 51!29! 39!

45!

Shareholders!Equity!

FY11! FY12! FY13! FY14! 6M!15!

45!39!

11! 11! 12!

Fixed!Assets!

FY11! FY12! FY13! FY14! 6M!15!

36!

40! 40!

37!

39!

Net!Current!Assets!

*"During"FY13"fixed"assets"were"adjusted"lower"by"$."27.8"Mn"due"to"goodwill""written"off""*" During" FY13," Shareholders" Equity" was" adjusted" lower" by" $" 30.1" Mn" due" to"goodwill"written"off"($"27.8"Mn),"provision"for"CDR"recompense"interest"($2.1"Mn)"and"write"off"on"liquidation""of"subsidiary"($"0.2"Mn)"

$!Million! $!Million!

$!Million!

$!Million!

FY11! FY12! FY13! FY14! 6M!15!

36!28!

21!

9!6!

Net!Debt!

Cash flow Trends

11.9! 10.0!14.2!

29.8!

6.8!

FY11! FY12! FY13! FY14! 6M!15!

Operating!Cash!flow!

10.6! 8.5!11.6!

26.8!

4.7!

FY11! FY12! FY13! FY14! 6M!15!

Free!Cash!Flow!!$!Million!

$!Million!

Key ratio Trends

15%!23%!

34%!

60%!45%!

FY11! FY12! FY13! FY14! 6M!15!

ROCE!

37%! 36%!

68%! 65%!

41%!

FY11! FY12! FY13! FY14! 6M!15!

ROE!

Competitor Analysis

! !

Potential for Operating leverage

!FY2013! Inditex!(Zara)&Interactive!Group!

(QVC)&HSNi!!(HSN)&

VGL!Group!(FY!2013U14)!

!Turnover!(Million!US!$)!& !18,909.4!& 10307& 3403! 215!

!Average!Selling!Price!(US$)!! TTT! 55! 62.4! 24!

!Gross!Profit!Margin!%!! 59.3%! 35.9%! 36.1%! 61%!

!Operating!costs!as!%!of!Sales**! 76.5%! 78.6%! 90.4%! 89%!

EBITDA/OIBTDA!as!%!of!Sales! 21.4%! 18.4%! 9.5%! 12.1%!

*Current!EPS! **Operating!Cost!=!COGS+!SG&A!!

Direct Competitors

FY2013! QVC! HSN! SHOP!HQ! LC*! TJC!UK*!

NUMBER!OF!PIECES!SOLD!(mn)! 134.0! 44.7! 7.2! 7.7! 2.0!

AVERAGE!PRICE!POINT! $62! $62.92! $81! $19! $26!

TV!HOUSEHOLD!REACH! 98!million! 95!million! 87million! 73!million! 25!million!

REVENUE!PER!HOUSEHOLD!REACHED! $60! $24! $7! $1.5! $1.8!

CUSTOMERS!SHOPPED!IN!2013!(000s)! 3,100! 3,000! 1,357! 267! 130!

CUSTOMER!RETENTION!RATE! 89%! 51%! 52%! 48%! 47.6%!

CUSTOMER!LIFETIME!VALUE!(USD)! $1247! $826! $339! $442! $378!

REPEAT!PURCHASE!(purchases/Total!Customer)!

24! TTT! 4.96! 19.11! 14.12!

*!TTM!Jan14TDec14!!

Environment!Care!

Training!&!Development!

Employee!Engagement! CSR!Activities!

Other Welfare Activities

Famous Quotes by world renowned Entrepreneurs/Leaders

! !

!!

Entrepreneurs!must!be!willing!to!be!misunderstood!for!LONG!periods!of!TIME.!

I!knew!that!I!failed!I!wouldnt!regret!that,!but!I!knew!the!one!thing!I!might!regret!is!not!trying!

!Jeff!Bezos!!Amazon.com!

!!

The!biggest!risk!is!not!taking!any!risk.!In!a!world!that!is!changing!really!quickly,!the!only!strategy!that!is!guaranteed!to!fail!is!not!taking!risks.!

Mark!Zuckerberg!Facebook!

!!Steve!Jobs!

Apple!Inc!

I!think!the!things!you!most!regret!in!life!are!things!you!didnt!do.!

!

The!only!way!to!do!great!work!is!to!love!what!you!do.!If!you!havent!found!one!yet,!keep!looking.!Dont!settle.!As!with!all!matters!of!the!heart,!you!will!know!when!you!find!it.!

My Message to Budding Entrepreneurs

!!

Hard!Work!

Perseverance!

Follow!your!Passion!

Thank You

!!

Documents

MDI_Entrepreneurship PPT_28 Jan 2015.pdf