By offering safe and organic baby products, this startup clocked Rs 55 lakh revenue per month during COVID-19
Brothers Sumit Suneja and Siddharth Suneja faced a classic situation every time they travelled abroad. They were inundated with requests for baby products from friends and family as most parents wanted better quality products for their kids.
Sumit and Siddharth realised that Indian parents lacked a good brand they could trust for their little ones. To understand the market better, they launched Merlin First & Co. with the purpose of reselling renowned international baby product brands pan India. As time went by, they realised the products were not always up to the mark in spite of costing a lot. So, the duo started their very own brand, Rabitat, in May 2019.
The Delhi-based startup offers products for babies and young children up to the age of six. Today, Rabitat has more than 20 products of its own, and has its online and offline retail presence across the globe. The founders say that despite the pandemic, Rabitat has grown from strength to strength, and has sold 100,000 units so far, and is clocking Rs 55 lakh revenue each month.
From books to kids products
Both Sumit and Siddharth are serial entrepreneurs and they first embarked on their journey as entrepreneurs way back in 2010, when they launched Reado, an audiobook platform. However, the duo was not able to sustain the business and decided to shut it on the night of demonetisation, says Sumit.
When the brothers realised there was a big void of a homegrown, premium quality Indian brand for kids, they wondered why after all these years of liberalisation, they could not find a local brand that they could trust wholeheartedly for their children.
They did a quick research and decided to first get a good understanding of the market by launching Merlin Brands Private Limited in 2016, with the purpose of reselling renowned international baby product brands in India.
“We became the official distributors for some of the best international brands for young children like Skip Hop, Comotomo, 3 Sprouts, and Pearhead. As time went by, we realised the products were not always up to the mark in spite of costing a lot,” says Sumit. This made them to think of staring their own brand, which gave birth to Rabitat.
They started the business with just two products - the hooded towel and SnapLock sipper bottle.
“With our experience in distribution, we were able to hit the ground running, retailing on all major online and offline platforms and our own ecommerce website very quickly,” says Siddharth.
Today, the startup has more than 20 product lines like swaddles, bottles, organic bedding, quilts, feeding pillows, baby loungers, and other toddler products like bags, insulated steel food jars, steel sippers, towels, and more.
Even though the market is full of kids brands, Sumit and Siddharth say there is no competition and that is exactly what led to the launch of Rabitat. The founders say that the uniqueness lies in the quality of Rabitat’s products and prices - for instance, a high-quality baby quilt will be around Rs 2,000, which the company claims is priced less compared to similar products in other brands.
“If you look at the children’s brands available today in India, they are either mass market brands that are not necessarily the best quality, international brands that are very expensive and not easily accessible, or smaller boutique brands that are again very niche, expensive, and not readily available,” says Siddharth.
“All of our products are internationally certified by the European Commission, The Global Organic Textile Standard, and are BPA free,” adds Sumit.
Sumit further says that the products are not only comfortable and safe but are also innovative. For instance, it recently launched all-weather organic cotton quilt that has a five-inch scoop design near the neck to prevent any chance of the quilt going over the baby’s head.
The market and revenue model
The startup has an online as well as offline distribution network. While a significant percentage of its sales come from its own website, it has partnered with ecommerce platforms like Amazon, Myntra, Flipkart, FirstCry, and Nykaa for online distribution. It has an offline presence through collaborations with Mothercare, Hamleys, Iconic Kids, as well as a huge network of unorganised mom and pop stores.
“We have also recently expanded into international markets like Australia, New Zealand, and Dubai, and are aiming to continue tapping new markets,” says Sumit.
“We launched in May 2019 and are proud to announce that we have grown 10 times since last year. Today, our monthly revenue is about Rs 55 lakh and this continues to grow steadily,” says Siddharth.
He says the startup has sold 100,000 units so far and has 40 percent repeat customers on its website. “Our sales for Merlin Brands have been approximately Rs 15 crore this year till November 2020,” says Siddharth.
Funding and plans ahead
The brothers have raised debt funding of Rs 3 crore so far to support the growth of the business, and say that the startup has a healthy cash flow and is on track to be debt-free by 2022.
With a team of 30 people, Sumit says the plan now is to expand Rabitat’s presence across the globe and add new categories in the feeding, bath, toddler, and diapering categories. It is also working on creating a Rabitat community with a separate website called ‘Meet the Mom’, which will host podcasts with experts, interesting posts on relevant topics, and a forum for moms to connect with each other.
“We seek to become the one-stop platform for all parents with our premium products, relevant content, and trustworthy community,” says Sumit.