Direct- to-parents strategy helps Firstcry.com reach 60,000 parents every month
For many marketers in the country, it would be very difficult to put their finger on that one problem that has hindered the establishment of a dominant baby care brand that stretches across the board. Johnson & Johnson has captured the personal care space for babies, but beyond that baby care preferences is still a very family led/experienced choices. The estimated Rs 30,000 crore baby market of India is an attractive space, but it is extremely tough one to crack. And rightly so, many startups such as BabyOye, Toonz, Precared are vying for a share of the pie. However their fortunes depends on gaining parent’s trust and hoping for a change in customer shopping behavior.
With 70,000 items on inventory and tie ups with over 700 top International and Indian brands, firstcry seems to be in a strong position to carve a niche. Supam Maheshwari, co-founder, firstcry.com motivation to startup came from the issues he faced as a first time parent. From travelling far to pick up products for his baby to bringing back baby products while returning from every foreign trip – the lack of products and the abundance of opportunity egged him to startup firstcry.Supam founded firstcry.com with his ex-colleague Amitava Saha in November 2010. Both of them are IIM alumni and knew each other from Brainvisa days – the earlier company they had started and sold. Since starting, firstcry has on-boarded brands like Mattel, Ben10, Pigeon, Funskool, Hotwheels, Nuby, Farlin, Medela, Pampers, Disney, Barbie, Gerber, Fisher Price, Mee Mee, etc. They have over 350 international and national vendors on board, and stock products from maternity wear to accessories for nursery, diapers, clothes for kids till the age of 9, toys, school gear, prams, strollers, car seats etc.
The store strategy
While a bulk of their sales still come from online, firstcry claims to be the first ecommerce company who planned and executed an offline strategy almost immediately after starting online. Supam says they were the first ones to start offline stores in June 2011, and since then have had many followers. Spread over an area of 1400 square feet, firstcry has 70 offline stores are mostly located in Tier 1 cities like Bangalore, Chennai, Noida etc. To give a flavor of online shopping to it inshop customers, firstcry has started installing 32” touch screens in its retail stores, so that customers coming into their shops can also see what their online store has to offer. “We have one of the best integrated working models today in the country. None of stores in the country offers same price for products in both online and offline store, but we are doing that. The same pricing code applies to products online and offline as well,” claims Supam.
Through this hybrid strategy of theirs, firstcry claims to have touched 15 lakh parents so far, and growing at 100% YOY. “We will continue to grow more than 100% for next coming few years as well. We want to grow our store story to atleast 300-400, at present we are adding 5-6 stores each month anyway,” says Supam. He says they are able to keep the pricing at both formats same because of the savings they get on individual customer orders – which is as much as 13% savings in the logistics side. Supam says discounts and deals is something the online customer is seeking, while the offline customer is mostly happy just getting the products, and is not always looking for discounts.
Firstcry has taken the franchise route to expansion and has an internal team that screens, selects and then helps setup the store for the franchises. “Franchise selection is done with a lot of rigour, but once they are selected, we give them all the ammunition needed to run the store, from architectural perspective, design, stock selection, providing systems, training the staff, POS software – everything is taken care by us, so that they don’t have to work with many vendors,” explains Supam.
Firstcry claims its stores turn operationally profitable within the first month itself because of the good brand recall, while some stores become profitable in three months. “Today we have franchisees who have multiple stores, some of them who have brought in their family members to start stores in different cities,” shares Supam.
The brand strategy
While they have on-boarded 600 national and international brands, firstcry also launched its own private label about a year back. BabyHug is the apparel brand and CuteWalk is the footwear brand that they have launched. Supam says these two brands have good recall among its customers and currently makeup for 20% of their revenues. Products sold under these two brands are a blend of local manufacture as well as import, and Supam is confident of these two brands itself being able to contribute upto Rs 300 – 400 crore in the next couple of years.
On the marketing and advertising front, firstcry today doesn’t spend a single penny in mass media advertising. While they did do normal TV and print ads in the beginning of their journey, they realized it was a low return, high cost model. Today most advertising is through word-of-mouth and some amount of online advertising. Firstcry had devised a unique strategy of directly reaching parents-to-be. “We are reaching out to 60,000 parents each month at present, in close to 12-15 cities, where we give a firstcry box to mothers before they leave the hospital. This box has samples of products of different brands, which the mother will use immediately after the baby is back home. It’s a beautiful box with around Rs 700-1000 of products.” explains Supam. This box also has coupons for its offline stores, coupons of international brands that people can use for their first purchase, but not after that. This is the biggest form of advertising and marketing that firstcry does. They have tiedup with 6,000 hospitals to do this, and Supam says this model is very high on ROI.
Since starting up, firstcry has raised $33 million in funds. Their last fund raise happened in January this year when they raised $15 million from Vertex Venture holdings, with participation from SAIF partners and IDG Ventures. Supam says their topline continues to grow 100% YOY and they should be able to continue this for more years to come. However like many ecommerce companies, profitability still eludes them.