Mensa Brands looking at opening up tech for other D2C brands, CEO says
Mensa Brands CEO and Founder Ananth Narayanan said that D2C brands should look at targeting specific niches rather than make products for the masses, and also maintain the right sales mix for the best outcome.
Mensa Brands is considering making its proprietary ecommerce advertising and pricing technology available for other direct-to-consumer (D2C) brands, said its CEO and Founder, Ananth Narayanan.
“It can be (a SaaS product),” he said, adding, “In fact, one of the things we are looking at is opening up all of our stuff for all digital brands to use. There is a developed Shopify ecosystem, but there is no developed marketplace ecosystem. To actually growth hack a marketplace, nobody really knows.”
Speaking at YourStory’s flagship tech summit, TechSparks 2024, in Bengaluru on Saturday, Narayanan explained the challenges brands face in the highly competitive ecommerce landscape.
“In the online world, when you are on a mobile phone, you have six swipes on a mobile phone after you open the Amazon, Flipkart or a Myntra app,” he said. “After the first six swipes it is very hard (to sell). The cost of those six swipes keeps going up (for brands).”
Narayanan believes that the key to tackling this problem, without burning through large amounts of capital, lies in technology.
“So today at Mensa 150,000 campaigns run on our proprietary ads platform,” he said. “We have done data integration with Amazon, Flipkart, Myntra—obviously Google and Facebook is easier because they are built for it—but we are actually able to manage our campaign very, very easily. If you are a simple brand you can't build the technology. It is actually expensive to build.”
Narayanan said that Mensa's proprietary technology can also be used to manage one of the most crucial parts of running a fashion business: inventory.
“Same thing is true for pricing, if you can get enough data, you can get the volume price elasticity exactly right,” he said. “And the most important thing in fashion is estimating the amount of inventory which is a mathematical problem, but if you have enough data and you build tech around it, you can do it well.”
Mensa Brands is, till date, the fastest to reach unicorn status in India. Unicorn companies are startups that get valued north of $1 billion, and Mensa became one when the Thrasio-style business model gained traction during the pandemic. Mensa has acquired more than 20 online-first brands across categories such as fashion, beauty and home.
Different stages of D2C
Narayanan noted that it gets challenging for D2C brands to scale beyond a point, as each stage of growth requires different processes and skill sets. It is relatively easy to scale a fashion brand to about Rs 30 to 40 crore through performance marketing and efficient advertising on Amazon, he said.
“Growing from Rs 20 crore to Rs 100 crore, the product and the repeat rates have to work for you,” he said. “Which I think is very difficult. I think India is a value-seeking segment, there are constantly new people coming with better value propositions.”
For growth beyond that, Narayanan believes the only way for brands is to break away from being an online-only brand and start selling offline, which requires a different set of skillsets.
“When you have 20 stores and the store manager does not show up in the morning, that day's sales are gone,” he said.
“You need different skillsets to do online and offline. It is important to build those skillsets and understand and recognise the skills that you don't have. Most of the folks from Mensa that we originally started with were ex-Myntra, ex-Metlife, a few Mckinsey folks but not offline folks. So we had to build an offline team because that is a different skillset,” he added.
Edited by Jyoti Narayan