Profitable unicorns are a RARE breed.
But FirstCry, an e-commerce startup selling baby products generates:
1) INR 1700 Cr revenue
2) INR 215 Cr profits
More importantly, they built THE go-to baby e-commerce brand of India!
Letโs dive into their amazing marketing strategy ๐งต
But FirstCry, an e-commerce startup selling baby products generates:
1) INR 1700 Cr revenue
2) INR 215 Cr profits
More importantly, they built THE go-to baby e-commerce brand of India!
Letโs dive into their amazing marketing strategy ๐งต
Structure:
1. What! A profitable Unicorn!?
2. So, how did it all begin?
3. Finding a niche and executing tirelessly
4. Building a memorable brand for parents
5. FirstCry Gift Box: Is it worth the money spent?
6. Closing Thoughts
1. What! A profitable Unicorn!?
2. So, how did it all begin?
3. Finding a niche and executing tirelessly
4. Building a memorable brand for parents
5. FirstCry Gift Box: Is it worth the money spent?
6. Closing Thoughts
1/ What! A profitable Unicorn!?
Among the many Unicorns in India over the last two years, less than one in five actually made profits from their operations.
FirstCry is one of the few Unicorns that turned a profit, and that by itself makes it stand out from others!
(contd.)
Among the many Unicorns in India over the last two years, less than one in five actually made profits from their operations.
FirstCry is one of the few Unicorns that turned a profit, and that by itself makes it stand out from others!
(contd.)
In FY21, FirstCry made revenue of INR 1700 Cr, and profits of INR 215 Cr!
But, what does FirstCry even do?
Well, FirstCry is an e-commerce company, just like Amazon & Flipkart, but focuses exclusively on baby & kids products.
Target customers => Parents of newborn babies!
But, what does FirstCry even do?
Well, FirstCry is an e-commerce company, just like Amazon & Flipkart, but focuses exclusively on baby & kids products.
Target customers => Parents of newborn babies!
2/ So, how did it all begin?
The origins of FirstCry go back to 2001.
Supam Maheshwari, co-founder of FirstCry, had just welcomed a baby girl.
He couldn't find quality baby products in India, so he'd stock up on toys and clothes from his US & Europe business trips.
(contd.)
The origins of FirstCry go back to 2001.
Supam Maheshwari, co-founder of FirstCry, had just welcomed a baby girl.
He couldn't find quality baby products in India, so he'd stock up on toys and clothes from his US & Europe business trips.
(contd.)
A bit more digging around this made him realize that the market for baby & kids products in India was highly unorganized.
Parents, like Supam, were looking to buy quality products from top brands but had no options.
So, he set out to buildd his own venture!
(contd.)
Parents, like Supam, were looking to buy quality products from top brands but had no options.
So, he set out to buildd his own venture!
(contd.)
After exiting his current business, Supam founded FirstCry in 2010!
It took them almost a decade to work on a problem he identified & experience himself!
๐ก Lesson โ To find a startup idea, stop thinking of potential ideas and start observing problems around you.
It took them almost a decade to work on a problem he identified & experience himself!
๐ก Lesson โ To find a startup idea, stop thinking of potential ideas and start observing problems around you.
3/ Finding a niche and executing tirelessly
FirstCry was pitched against e-commerce biggies like Amazon & Flipkart.
But, they were confident that the niche they identified was underserved.
So, they focused on tireless execution, taking one step at a time.
(contd.)
FirstCry was pitched against e-commerce biggies like Amazon & Flipkart.
But, they were confident that the niche they identified was underserved.
So, they focused on tireless execution, taking one step at a time.
(contd.)
Initially, FirstCry focused only on toys for parents living in metro cities.
In fact, they started with only Pune and called up their friends & families to try out their products.
Over the years, they expanded to multiple categories and tier-2 & tier-3 cities.
(contd.)
In fact, they started with only Pune and called up their friends & families to try out their products.
Over the years, they expanded to multiple categories and tier-2 & tier-3 cities.
(contd.)
Launching mobile app was a natural next step, and the app now brings in ~70% of online sales.
๐ก Lesson โ Your startup doesn't need to fail fast. It can succeed slow.
But, FirstCry's growth can be mainly attributed to its brilliant execution.
Let's see some examples!
(contd)
๐ก Lesson โ Your startup doesn't need to fail fast. It can succeed slow.
But, FirstCry's growth can be mainly attributed to its brilliant execution.
Let's see some examples!
(contd)
A) Offline stores in tier-2 & tier-3 towns
Realization 1 โ there was a large section of the population that wasn't comfortable with online transactions and wanted to actually see the product.
So, they decided to start offline stores in tier-2 & tier-3 towns.
(contd.)
Realization 1 โ there was a large section of the population that wasn't comfortable with online transactions and wanted to actually see the product.
So, they decided to start offline stores in tier-2 & tier-3 towns.
(contd.)
Rationale:
1. real estate is cheaper in tier-2 & tier-3 towns compared to cities.
2. a large part of their target audience for offline stores would likely reside there
Today, the company has 380 stores across India.
(contd.)
1. real estate is cheaper in tier-2 & tier-3 towns compared to cities.
2. a large part of their target audience for offline stores would likely reside there
Today, the company has 380 stores across India.
(contd.)
B) Building a logistics company!
Realization 2 => Outsourcing the delivery of products was getting expensive.
Plus, they didn't have full control over the customer experience i.e. on-time, safe delivery.
So, they started their own in-house logistics division in 2012.
(contd.)
Realization 2 => Outsourcing the delivery of products was getting expensive.
Plus, they didn't have full control over the customer experience i.e. on-time, safe delivery.
So, they started their own in-house logistics division in 2012.
(contd.)
The logistics division also started fulfilling orders for other companies and was eventually separated out as an independent business entity, XpressBees.
Today, XpressBees is a Unicorn by itself and boasts of Alibaba as one of its investors!
(contd.)
Today, XpressBees is a Unicorn by itself and boasts of Alibaba as one of its investors!
(contd.)
Of course, all these efforts paid out really well for FirstCry.
A metric they aced early on itself was โrepeat customersโ โ 80% of parents who made a purchase came back to FirstCry to buy more!
But, there was one major problem that remained unsolved โ brand awareness.
A metric they aced early on itself was โrepeat customersโ โ 80% of parents who made a purchase came back to FirstCry to buy more!
But, there was one major problem that remained unsolved โ brand awareness.
4/ Building a memorable brand for parents
FirstCry realized that once a baby is born, that family becomes a prospective customer to them immediately.
Attracting new parents and giving them a good experience is at the core of their strategy.
(contd.)
FirstCry realized that once a baby is born, that family becomes a prospective customer to them immediately.
Attracting new parents and giving them a good experience is at the core of their strategy.
(contd.)
There are several reasons why this works:
1. The first few months of a newborn baby is the time when they are most visited by friends and family.
2. Parents are likely to talk about their good experience with FirstCry, resulting in impressive word-of-mouth publicity
(contd.)
1. The first few months of a newborn baby is the time when they are most visited by friends and family.
2. Parents are likely to talk about their good experience with FirstCry, resulting in impressive word-of-mouth publicity
(contd.)
In short, these new parents could become FirstCry's "micro-influencers" in their tiny communities.
So, FirstCry came up with the "Gift Box" program.
They partnered with hospitals across India to provide a free gift hamper to parents with newborns.
(contd.)
So, FirstCry came up with the "Gift Box" program.
They partnered with hospitals across India to provide a free gift hamper to parents with newborns.
(contd.)
With this program
a) Parents are delighted to receive products from popular brands like Pampers, Dove, and Vaseline.
b) Plus, these brands get more visibility. So, FirstCry pushes them to sponsor the items in the gift boxes.
So, it's a win-win for FirstCry and these brands!
a) Parents are delighted to receive products from popular brands like Pampers, Dove, and Vaseline.
b) Plus, these brands get more visibility. So, FirstCry pushes them to sponsor the items in the gift boxes.
So, it's a win-win for FirstCry and these brands!
5/ FirstCry Gift Box: Is it worth the money spent?
The โGift Boxโ program seems like a hit right away, but weโre not satisfied unless the numbers tell us the same story :)
So letโs do some math!
A) Number of families reached
1. Hospitals in India => ~69,000
(contd.)
The โGift Boxโ program seems like a hit right away, but weโre not satisfied unless the numbers tell us the same story :)
So letโs do some math!
A) Number of families reached
1. Hospitals in India => ~69,000
(contd.)
2. Hospitals partnered with FirstCry => ~10,000
So, FirstCry has a coverage of 10,000/69,000 = ~14.5%!
3. Babies born in India everyday => ~67000
1/3rd of the population in India is urban.
So, we can assume that 67,000/3 => ~22,000 babies are born in urban hospitals.
(contd)
So, FirstCry has a coverage of 10,000/69,000 = ~14.5%!
3. Babies born in India everyday => ~67000
1/3rd of the population in India is urban.
So, we can assume that 67,000/3 => ~22,000 babies are born in urban hospitals.
(contd)
4. FirstCry has a 14.5% coverage, so 22,000 x 14.5% => ~3200 families receive gift box every day.
5. Over a year, that's 3200 x 365 = ~ 12 lakh families!
6. These newborns get many visitors and parents would happily talk about the wonderful gift box.
(contd.)
5. Over a year, that's 3200 x 365 = ~ 12 lakh families!
6. These newborns get many visitors and parents would happily talk about the wonderful gift box.
(contd.)
If we assume 2-10 families get to know about the gift box,
Number of families reached in a year
A) 2 families โ 12 L x 2 = 24 L
B) 5 families โ 12 L x 5 = 60 L
C) 10 families โ 12 x 10 = 1.2 Cr
So, FirstCry is able to reach 2,400,000 to 12,000,000 households in a year.
Number of families reached in a year
A) 2 families โ 12 L x 2 = 24 L
B) 5 families โ 12 L x 5 = 60 L
C) 10 families โ 12 x 10 = 1.2 Cr
So, FirstCry is able to reach 2,400,000 to 12,000,000 households in a year.
B) Customer Acquisition Cost
Now, we already saw that the gift box program is equally beneficial for product brands and they would happily sponsor most of the products in the boxes.
But for a second, letโs assume that FirstCry has to bear the cost of these boxes.
(contd.)
Now, we already saw that the gift box program is equally beneficial for product brands and they would happily sponsor most of the products in the boxes.
But for a second, letโs assume that FirstCry has to bear the cost of these boxes.
(contd.)
Let's see what it would cost FirstCry to run this program.
1. Cost of 1 gift box => INR 500
2. The cost of 12 lakh gift boxes => 12 L X 500 = INR 60 Cr
3. Assuming they are able to reach 24 lakh to 1.2 Cr households.
Cost to acquire a customer:
(contd.)
1. Cost of 1 gift box => INR 500
2. The cost of 12 lakh gift boxes => 12 L X 500 = INR 60 Cr
3. Assuming they are able to reach 24 lakh to 1.2 Cr households.
Cost to acquire a customer:
(contd.)
A) 24 lakh โ 60 Cr / 24 L = INR 250
B) 60 lakh โ 60 Cr / 60 L = INR 100
C) 1.2 Cr โ 60 Cr / 1.2 Cr = INR 50
So, the customer acquisition cost comes out to just INR 50 to 250!
Of course, that cost is actually much lesser since product brands end up sponsoring these boxes.
B) 60 lakh โ 60 Cr / 60 L = INR 100
C) 1.2 Cr โ 60 Cr / 1.2 Cr = INR 50
So, the customer acquisition cost comes out to just INR 50 to 250!
Of course, that cost is actually much lesser since product brands end up sponsoring these boxes.
6/ Closing Thoughts
FirstCry is a true testament to the fact that you can survive & thrive even in a highly competitive industry by carving out a niche for yourself.
Of course, their brilliant execution and the Gift Box program have majorly contributed to its success.
(contd.)
FirstCry is a true testament to the fact that you can survive & thrive even in a highly competitive industry by carving out a niche for yourself.
Of course, their brilliant execution and the Gift Box program have majorly contributed to its success.
(contd.)
An IPO is likely on the cards for FirstCry in the coming year. Itโd be interesting to see whether investors shower as much love on FirstCry as Indian parents :)
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