V-Mart Retail Limited has informed the Exchange about Investor Presentation
Ref. No. CS/S/L-606/2022-23
17th October, 2022
To: The Listing Department NATIONAL STOCK EXCHANGE OF INDIA LIMITED “Exchange Plaza” Bandra Kurla Complex, Bandra (E ), Mumbai – 400 051 Scrip Code: VMART Fax: 022-26598120 Email: cmlist@nse.co.in
To: The Corporate Relationship Department THE BSE LTD Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai – 400 001 Scrip Code: 534976 Fax: 022-22723121 Email: corp.relations@bseindia.com
Sub: Presentation to Analysts/Investors
Dear Sir/Madam,
Please find enclosed herewith the presentation being forwarded to Analysts/Investors on acquisition of the LimeRoad Business as a going concern on a slump sale basis from A.M Marketplaces Pvt. Ltd.
The above presentation is also available on the Company's website: www.vmart.co.in.
We request you to kindly take the above information on record.
Thanking You,
Yours Truly For V-Mart Retail Limited
Anand Agarwal (Chief Financial Officer)
Encl: As above
V-Mart Retail Limited
Acquisition of LimeRoad Business
1
Disclaimer
This presentation has been prepared by V-Mart Retail Limited (“V-Mart”) and does not constitute a prospectus or placement memorandum or an offer to acquire any securities. This presentation or any other documentation or information (or any part thereof) delivered or supplied should not be deemed to constitute an offer.
No representation or warranty, express or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of such information or opinions contained herein. The information contained in this presentation is only current as of its date. Certain statements made in this presentation may not be based on historical information or facts and may be “forward looking statements”, including those relating to the general business plans and strategy of V-Mart, its future financial condition and growth prospects, future developments in its industry and its competitive and regulatory environment, and statements which contain words or phrases such as ‘will’, ‘expected to’, ‘horizons of growth’, ‘strong growth prospects’, etc., or similar expressions or variations of such expressions. These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results, opportunities and growth potential to differ materially from those suggested by the forward-looking statements. These risks and uncertainties include but are not limited to risks with respect to its hair care, its healthcare business and its skin care business.
V-Mart may alter, modify or otherwise change in any manner the content of this presentation, without obligation to notify any person of such revision or changes. This presentation cannot be copied and disseminated in any manner.
No person is authorized to give any information or to make any representation not contained in and not consistent with this presentation and, if given or made, such information or representation must not be relied upon as having been authorized by or on behalf of V-Mart. This presentation is strictly confidential.
2
Transaction Summary
Transaction Overview
▪ V-Mart has agreed to acquire the business of ‘LimeRoad’ for purchase consideration of ~Rs 31Cr* and assume liabilities of ~Rs 36Cr* through a business transfer from Limeroad, on a slump sale basis, as a going concern. ▪ The completion of the transaction is subject to necessary approvals and customary condition precedent and
▪
closing conditions. Suchishree Mukherjee, founder of LimeRoad, and the key management team will continue to run LimeRoad as a separate business unit within V-Mart
Rationale
▪ Acknowledged need to strengthen digital capabilities & V-Mart has invested in this for the last 3 years ▪ While our current customer base is not highly penetrated in eCommerce, but is bound to form a meaningful
contribution mix in the coming years
▪ We also believe that the future customer will be an Omni customer, requiring the flexibility to shop from both
offline and online mediums
▪ V-Mart had originally planned to invest Rs 100 Cr over next 3 years for building its Omni channel capabilities
internally. This acquisition allows us to fast track the plan at a similar cost through o Experienced management team with demonstrated capabilities of running online business o Advanced tech platform which has handled GMV of 700Cr+ (in FY19) o 1.7 Cr loyal customer base with repeat rate of 60% (NPS score of 44) o Best in Class CAC, Customer NPS & Retention rates o Best in class supply chain management
*These amounts are subject to customary closing adjustments as agreed between the parties.
3
About LimeRoad
1
2
3
4
5
6
D2C platform with an inventory free model
Efficient supply chain capabilities
₹10cr+ FY22 monthly NMV run rate
32% Consistent CM1* Margin over the years
2018 Economic Times Supply Chain of the Year Award
44 NPS# score FY21
High online engagement
Best in class product & tech
250,000+ Peak app downloads per day
Fastest web speeds in India > Amazon, Flipkart
₹840 Current AOV$
Lightest app in India (<10MB)
Freshest and trendiest fashion experience
3X LTV/CAC for women buyers
#3 All India play store ranking FY20
Highly differentiated fashion UI
LimeRoad is among India’s most attractive value-focused, fashion and lifestyle pureplay online commerce platform today
*CM1 = Revenue – Logistics Cost ; # NPS – Net Promoter Score ; $ AOV – Average Order Value
4
Strong overlap with VMart core market & similar target group customers
▪ Core customers with household income of below 5 lacs for both, 70% of V-Mart’s customers and 65% of LR’s are non metro/Tier 1
▪
LR has strong customer base in UP, will synergise with V-Mart’s offerings
▪ Maharashtra, Karnataka, UP &
West Bengal are the top contributors and will complement the offline business of V-Mart
▪ 30% of SKUs sold on LimeRoad
have ASPs below 499, which is a very strong overlap with V-Mart with 56% of SKUs sold under 500
Customer Concentration
ASP < Rs 499 Mix Repeat rate
Target age group
56% 58% 15-35 years
~30% 60% 18-40 years
Low Concentration
High Concentration Low Concentration
High Concentration
5
This partnership would help us increase our Digital channel sales, increase Omni offering, footfalls and customer base
V-Mart
33
million registered customer base
29
million footfall in FY22 across 380+ stores, 98% sales in stores, 2% online
Together we will have
50million
customers across India
244million
Online & Offline footfall in FY22
LimeRoad
17
Million registered customer base
215
million visits in FY22, web and app, 97% on mobile
6
LimeRoad’s strength in women’s category to create synergies for VMart
₹806 AOV for women 1st time buyer on LimeRoad website
₹1100 AOV for high frequency repeat women buyers
23% AOV for women higher than AOV for men
86% Sales from apparel, V-Mart’s is 80%
Kids 3%
Men 38% Women 63%
Men 32% Women 59%
Men 44%
Kids 30%
Women 27%
VMart FY22
LimeRoad FY22
7
V-Mart would be able to deliver enhanced omnichannel experience & digital convenience to customers via LimeRoad’s technology
1
2
3
4
Incremental online orders for stores
Wider range of products
Engaging fashion feed and content
Convenience for customers at store
Store fulfillment
Endless aisle
Personalized fashion feed
Digital convenience
V-Mart stores would get additional orders from online while LimeRoad gets last mile capabilities
Returning customers at stores can find larger collection on LimeRoad app
Keep 5 Cr. customers engaged with editorials and personalized fashion feed
Click-n-try Click-n-collect Queueless payment Hassle free returns
8
LimeRoad will become a primary omni channel vehicle for V-Mart while continuing to operate on other marketplaces
Vmartretail.com will redirect to V-Mart’s brand page on LimeRoad
9
V-Mart and LimeRoad : Key Statistics
Parameters
Monthly Footfall
V-Mart
LimeRoad
3.2Mn across 400+ stores
18Mn online visitors, web + app
Registered Customer Base
33Mn (Offline First)
17Mn (Digitally Native)
Channel Sales Mix
Metros/Tier 1 : Non-metros
ASP mix of units sold
<₹499 : ₹500-899 : ₹899+
Sales Breakup By Product Category Apparels Home & Kitchen Others
98%+ offline , 2% online
100% online, 97%+ on mobile
30%:70%
35% : 65%
56% : 30% : 14%
30% : 37%: 33%
80% 10% 10%
85% 1% 14%
Core Customer Profile
Gross Margin / CM1
Tier 2+ mindset, 15-35 years, household income <Rs. 5L per year
Tier 2+ mindset; 18-40 years, household income <₹5L per year
34%+
~32%
10
Acquisition will be highly accretive to V-Mart’s value lifestyle and omni- channel strategy
•
•
•
•
•
An attractive build vs buy investment, with a total investment of ~ Rs 67 Cr to pay off the existing liabilities.
This acquisition will help us accelerate our omni channel plans and bring in a strong team, digital brand presence, community experience, technology stack, product capabilities and customer base
A capital efficient business model engineered for growth and profitability, aligned to V-Mart’s ethos, will continue to operate with a priority on cash flows and profitability overgrowth. Additional investments of Rs 60-70 cr expected over the next 2 years, which should not exceed 15-20% of VMart’s EBITDA o LR has an asset light platform with zero capex, zero inventory, negative working capital cycle o Enjoys strong D2C type economics with 40%+ platform take rates and market-leading low-cost fulfilment o Consistently delivering 30%+ contribution margin (CM1) in the business, delivered positive contribution (~9% in
FY22) after adjusting for customer acquisition costs, before fixed/corporate costs
LimeRoad will run as an independent business unit within V-Mart, preserving its start up culture; all the existing employees including founders to continue with strong ESOP incentives for long term commitments
V-Mart together with LimeRoad, will be a unique, one of its kind, profitable and omnichannel play in India, with online accounting for >10% of overall combined sales within current financial year to grow to 20%+ in 24-36 months
11
www.vmartretail.com
Thank you!
In case of any queries, please contact the IR Team: ir_vmart@vmartretail.com