Executive Summary
Mayajaal Holdings, a New Zealand based supply, distribution and retail business, have been
making inroads into the leisure and beverages industry over the last decade, in the B2B as well
as B2C channels. The company has been operating and growing steadily, and as for any
business in the technology era, entering the digital bandwagon was an inevitable step for
business development. As Mayajaal looks to grow further by executing its digital strategy, a study of its business model is crucial to identify the strengths and weaknesses, and this report aims to analyse the various aspects of Mayajaal’s structure and operations in the commercial and digital space.
The analysis starts off by taking a brief look at the company’s ownership and operations, and putting this into context based on the national and international industry environment. This is followed by dissecting the business model around the KPMG digital model – identifying the digital tribe targeted by the business and how it can position itself to appeal to the customer base, the revenue model and how it nets off the cost, and the value proposition offered in the process. The business model is further branched out into various building blocks, mapping it on a canvas with identifies the streams, structure and inter-relationships. The outcome of this review is used to suggest a business plan for the upcoming years that complements Mayajaal’s growth aspirations. This is extended into a study to identify the sweet spot for the business per
the MIT model.
The report thus aims to provide an all-round evaluation of the operations model compared to the aspired digital business model and the value enhancement achieved in the process. The information used have been sourced directly from the organization with complete ethical consideration, and have been introspected in the light of academic theory as well as knowledge obtained from the public domain. Our team of four had several rounds of discussion on the topic where we studied the business as a whole, identified the dynamics of the industry and way of working of the business, and then mapped and worded the report based on our area of focus.
We hope the information provides relevant insight into the effectiveness and efficiency of the business model and provide a pathway to a developed understanding of the concepts on digital enterprising and digital business structure.
Global Liquor Industry and New Zealand
As an ambitious business, Mayajaal is keen to understand how the global alcohol industry functions, especially in countries with demographics similar to New Zealand, as well as the local industry. Liquor sales in New Zealand continue to grow through 2018, hitting a total sales value of $1.6 billion (Stuff, 2018). This has been attributed to the increase in per capita disposable income versus a hold on alcohol prices since 2012.
New Zealand’s growth in the market is highly attributable to the success of its wine industry that grew into a billion-dollar industry (exports) in less than 20 years. Other drivers are the production of whey alcohol – a by-product of the dairy industry, signature flavours such as manuka honey and feijoa, as well as its reputation as an environment friendly producer of soft foods (Coreolis, 2012).
A recent study shows that consumer preferences around alcohol consumption is changing and the on premise (bar and restaurants) consumption is being widely replaced by off premise (home and outdoor) consumption – a clear indicator of a shift in supply dynamics (Smith,2017). And Pernod Ricard’s CFO clearly foresees a future where e-commerce is going to create a massive wave of transformation, all a clear indicator why Mayajaal should adapt to the digital business sooner than later to stay competitive (Taylor, 2016). Mayajaal Holdings Limited- Business Background and Structure,
Shareholders Mayajaal Holdings Limited is a New Zealand based company in the Liquor Industry, trading as ‘Maya Enterprises’ in the B2B segment and as ‘Gift-A-Bottle’ and ‘TopShelf Liquor’ in B2C segment. The group has over 2 warehouses and their headquarters situated in Auckland and distribution channels all over New Zealand with 25 team members in business. ‘Maya Enterprises’ is a wholesale alcohol distributor-servicing bottle stores, distributors, bars and restaurants across the nation. Maya Enterprises is a bulk supplier of all major local and imported brands at competitive wholesale prices. Incorporated in September’ 2010, Maya enterprises distribute over 80 different products all over New Zealand and Australia. Mayajaal Holdings Limited, launched its online liquor business with ‘Gift-A-Bottle’ in 2016,
‘Gift-A-Bottle’, believes in saying ‘Thank you’ in style with a bottle of Wine or ChampagneA perfect gift for birthdays, anniversaries, for clients or for any occasion. In April’ 2017, Mayajaal, acquired the e-commerce business of TopShelf Liquor to strengthen its online business and expand its online customer base for ‘Gift-A-Bottle’. Top Shelf currently has an active base of over 21000 retail consumers all over New Zealand and Australia. Mayajaal, aims to merge both the B2C e-commerce businesses under a single brand name ‘Gift-A-Bottle’, by the end of December’ 2018. Stakeholders:
Mayajaal Holdings Limited, has stakeholder over all the New Zealand and Australian market:
• Maya Enterprises has an active list of over 750 B2B clients including bottle stores,
distributors, bars and restaurants all over New Zealand.
• ‘Gift-A-Bottle ‘has an active base of over 500 retail customer all over New Zealand
and Australia.
• With the acquisition of TopShelf Liquor, the company has increased its online B2C
clients list to over 20,000 active members all over New Zealand and Australia.
The company’s share is held by;
Shareholders Details % of Share holding
Maya Trustees Limited 98%
Priya Ramchandran 1%
Nagrajan Natarajan 1%
Business Model Analysis:
The Business Model is analysed using the KPMG digital Model.
Mayajaal Holdings Limited- Current Business Plan Canvas:
➢ Key Partners: No business can run without partners, that commonly require you to
exchange with other entities to sell your product. Mayajaal key partnership lies with the
local bottlers, bars and restaurants and distributors on the B2B market segment. The
B2C online business purely depends on the online retail customer across New Zealand
and Australia.
➢ Key Activities: The main business activities of Mayajaal Holdings revolve around
stocking of products, managing supply chain and logistics, customer interaction on the
B2B and B2C platform and business development.
➢ Key Resources: The heart of business or elements which keeps the business running.
Warehouse and Website are the 2 key elements which is truly important for Mayajaal
Holdings to run daily operations and identify opportunities and risk factors.
➢ Customer Relationship: Email Marketing, Social Media, Community and Website
interactions helps nurture a strong customer engagement and retention base, Mayajaal
over the years have been able to achieve strong customer support and relationship.
➢ Channels: Reaching the right audience at the right time is the key for a successful
business, Currently Mayajaal holdings has been able to effectively communicate with
the target customer, but there is a long way to go with new improved communication
tools available in the market.
➢ Customer Segments: Mayajaal operates in both B2B and B2C market segments. It
covers a niche market of Indian beer and Spirit consumers, locavores, local bars and
restaurants in New Zealand in the B2B segment. On the B2C platform, it caters to videspectre
of consumers including boomers, millenniums, single and joint families, local
and urban population in New Zealand and Australia.
➢ Cost Structure: The current B2B business model, attracts a huge cost of
warehousing and store maintenance. The online B2C segment i.e. ‘Gift-A-Bottle and
‘TopShelf Liquor’ has helped reduce the burden of fixed cost incurred. However, the
additional online business costs include setting up a technology platform (website,
mobile-site, etc.) and its maintenance. The Cost Structure for Mayajaal is divided into
2 parts; Fixed and Variable Cost.
• **Cost of Goods Sold includes;
o Purchase cost
o Exchange Rates
o Import Duty & Taxes
o Shipping and Logistics
• **Operational Cost includes;
o Warehousing
o Delivery Charges
o Maintenance
Mayajaal Holdings Limited- Cost: Source Annual Report’ 2017
Particulars FY’ 2017(NZD.)
(In Millions)
% Contribution
Cost of Goods Sold** 6.75 57.01
Salary Cost 1.21 10.22
Operational Cost** 2.93 24.75
Advertising & Marketing Cost 0.95 8.02
Total Cost 11.84 100.00
➢ Revenue Structure: To analyze the source of revenue of any business, it is useful
to ask the question: “What jobs are customers want to be done for them and done
conveniently, easily and affordably?” (Christensen, Wessel, 2012) In case of Mayajaal
Holdings, the sources of revenue are from the B2B and B2C segment. According to Mr.
Raj Natarajan- Chairman & Managing Director, the B2C online business has shown
promising revenue last year and sees a great potential in improving the revenue from ecommerce business in coming years. With over 20,000 active consumer bases on the
online B2C platform generated sales revenue of NZ$5.47 million in 2017, contributing
nearly 39% of the total business revenue. Online business transaction recorded over
75000 purchases in 2017, with an average transaction amount of NZ$72.34 per
transaction. Mayajaal Holding Limited- Revenue: Source Annual Report’ 2017
Particulars FY’ 2017(NZD.) (In Millions) % Contribution
Maya Enterprises 8.56 61.01
Gift-A-Bottle 1.62 11.55
TopShelf Liquor 3.85 27.44
Total Sales 14.03 100.00
➢ Value Proposition: There is much Liquor outside! You can’t just have a wait-and watch
strategy, Mayajaal, need to create value in their products over others through
Quality, Participation, Gifting and Variety. Mayajaal has managed to garner
considerable lead in the B2B market in New Zealand and in B2C market segment in
New Zealand and Australia.
Following Digital Convergence Equalizer reveals Mayajaal Holdings value creation
analysis:
➢ Compelling Content: Though content / products are Mayajaal Holdings main forte it
needs to further improve in its online product assortment. Connection, Impression and
Fusion missing.
➢ Context: Mayajaal Holdings has a long way to go when it comes to personalizing
websites and logins in order to enhance their online experience.
➢ Coverage: Need for effective Mobile App and Mobile website providing coverage
across different devices.
➢ Convenience: it’s the main reason why online Liquor is catching up. Delivery cost and
fixed schedule for product delivery is adversely hampering its popularity.
➢ Control: Mayajaal Holdings needs to devise a model which gives better control over its
distribution channel and customer engagement processes.
➢ Choice: Internet allows a wide choice which may not be available in physical space but
currently Mayajaal Holdings provides the same product assortment as B2B business
segment.
➢ Connectivity: Currently Mayajaal reaches customers in New Zealand and Australia.
Rest of the World market is left behind.
➢ Community: Online community is missing for Mayajaal B2C business segment.
➢ Comments: Mayajaal Holdings currently does have option to comment on its website
but can further improve on the same.
➢ Consolidation: Do not have any aggregator services for B2C and B2B customer
experience.
➢ Customization: Ability to personalize individual online experience especially in the
online world is the USP for Mayajaal Holdings. Currently provides customisation but
to limited extent.
➢ Combination: For customer convenience Mayajaal Holdings needs to provide option
combining products in the same consumption range.
➢ Conversations: This is a weak point for Mayajaal Holdings as there is no online chat
option for customers to talk to any customer service agent nor can customers interact.
➢ Compliance: Currently, Mayajaal comply with all the legal and social requirements of
Liquor Business
➢ Customer Experience: Though customers use website to order they surely won’t enjoy.
➢ Customer Review and compensation: Product wise review or usage pattern is not
available.
Digital Tribe:
Currently Mayajaal Holdings digital customers are mainly family with double income and no kids, singles younger than 40 or high income with children, Boomers in the age group of 20-
26 years and Millenniums in the age group of 38 years and above. These customers also fall into the Digital Media Junkies or the On-the-go workers category as per the i-consumer survey attached below.
Emerging Digital Business Model; Mayajaal Holdings Limited in next 5-
years:
In order to improve its digital value proposition Mayajaal Holdings needs to improve on
various aspects of its value proposition as per the KPMG 20c’s.
➢ It needs to increase its assortment of online products in order to cater to a larger segment
of customers.
➢ Individual personalization, location-based service, GPS tracking etc. are important
features that every digital business must cater to.
➢ It’s time to launch the full-fledged Mobile application for both the B2B and B2C
segment.
➢ In order to improve sales and generate more profits better control and planning of its
distribution channel is the key.
➢ It needs to cater to point of views of its customers by allowing customers to comment
and converse on its website.
➢ Personalised Login Web-page
These improvements will surely lead to a better customer experience.
Comparative Digital Value Proposition of Mayajaal Holdings Limited;
Current vs. 5 years later
Digital Customer Segment and Revenue Model:
Mayajaal Holdings Limited, need to adopt to a top-up or stock-up strategy approach for both the B2B and B2C business segment. In the next 5 years or so, Mayajaal Holdings, need to have 75% on Stock-up to stabilize the business operations in terms of revenue over cost. Currently Mayajaal Holdings Limited is using one size fits all strategy by providing the same value proposition in both B2B and B2C business segments. It can segment its business as depicted in the following diagram:
Customer Segment & Revenue Model Figure
Finding Profits in Complexity Sweet Spots – (MIT, 2014)
Mayajaal Holdings, to leverage the ‘Sweet-Spot’ of its business, need to follow a reverse
observation process.
➢ Identify the current complexity position- To decide, if to work out a simplified process
for customers or to provide new less complicated product in the market. Mayajaal
Holdings need to have a mixed approached towards the identification process to
stabilise its sweet-spot in the next 5 years.
➢ Select the Path- There are 3 paths ‘Sweet-Spot Complexity’ as depicted below in the
Figure.
o More process simplification- Arrow A
o Very Low Product Complexity- Arrow B
o Zigzagging path- Arrow C.
Currently, with all the planned initiatives, Mayajaal can adapt to the ‘zigzagging’ which
has an advantage of avoiding the high risk of big-bang change projects.
References
Coreolis. (2012). Investment Opportunities in the New Zealand Alcoholic Spirits Industry.
KPMG. (2009). Emerging Business Models to Help Serve Tomorrow’s Digital Tribes.
Retrieved from
https://www.kpmg.com/CN/en/IssuesAndInsights/ArticlesPublications/Documents/em
erging-business-models-O-0906.pdf
Massachusetts Institute Of Technology. (2014). Revisiting Complexity in the Digital Age.
Retrieved from http://mitsmr.com/1pcP4Kn
Mayajaal Holdings Limited. (2017). Annual Report 2017. Retrieved from
https://app.companiesoffice.govt.nz/companies/app/service/services/documents/85F2
B7E26654E64EB3D8245ACE74568B/CoyExtract_3149490_09September2018.pdf
Strategyzer. (2015). The Business Model Canvas. Retrieved from
http://businessmodelgeneration.com/canvas/bmc?_ga=1.213998992.645013967.1441
919694
Stuff. (2018). NZ alcohol sales continue to climb. Retrieved from
https://www.stuff.co.nz/business/industries/104316756/nz-alcohol-sales-continuecontinue-to-climb
Smith, G. (2017). Taking the lead in liquor. What New Zealand can learn from U.S. Trends.
Nielsen.
Taylor, K. (2016). The liquor industry is experiencing 3 seismic changes. Business Insider.
The Guardian. (2009). Digital Tribes. Retrieved from http://www.theguardian.com/digitaltribes/interactive/digital-equaliser
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