Meet the Doyens of Direct-to-Consumer (D2C) Model
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India added 80Mn shoppers in the last three years alone to reach 130Mn today. The COVID-19 pandemic has further accelerated online adoption amidst the temporary closure of physical retail stores and the growing wariness for public places. On this backdrop, online spending in India is expected to grow at a CAGR of 35%+ from $39Bn today to $200Bn over the next five years, supported by internet and payment infrastructure developments.
The internet ecosystem and evolving consumers have made new business models viable and have led to the emergence of the direct-to-consumer (D2C) distribution channel. Today, India is witnessing the rise of D2C brands across categories and is estimated to become a USD 100 Bn addressable market by 2025. We expect high levels of funding activity in this space, increasing with the passage of time, as more successful D2C outcomes will validate the hypothesis for newer capital deployment.
It’s the David v/s Goliath play in the consumer space as challenger brands try to dethrone the legacy brands taking the digital-first approach. In the ensuing pages, meet The Makers Co. at Entrepreneur as we take a deep dive into the world of consumer brands.
(This article was first published in the May 2021 issue of Entrepreneur Magazine. To subscribe, click here)
Aman Gupta, Co-founder, boAt
There is a lot of learning that has gone on from last year for everyone. The same goes for boat founder, Aman Gupta. Amidst accelerating e-retail partnerships with Amazon, Flipkart, etc, the brand also developed a strong D2C (Direct-to-consumer) strategy. Talking about the same, Gupta says, “With D2C we are now able to own the customer relationship and directly engage with them in relevant ways. And of course, this unlocks the ability to capture rich first-party data which can help us to create sought-after product launches, events, content, and loyalty or subscription models.” Currently, boAt covers 90% of India pin codes via a mix of offline and online retail. “In terms of sales, online contributes to 80% of our sales, and the remaining 20% is achieved through our offline channel,” informs Gupta.
Another major learning for Gupta in the time of pandemic was to look at manufacturing in India. Before covid, a major part of the manufacturing was commissioned outside India (Singapore, China amongst others) but being agile, they are now slowly moving towards “Make in India”. “Top sellers like Bassheads (Wired Earphones & Headphones) and Rockerz series (Wireless Headphones) are now ‘Made in India'. We will surely add more products to this list in the coming months,” shares Gupta.
boAt has been profitable since day one, but external investment helped them make the fundamentals even stronger and further bring structure to the processes. The recent equity investment from Warburg Pincus and Qualcomm Ventures will help the company build momentum in the coming year as it builds up its R&D and manufacturing capabilities. boAt continues to achieve rapid revenue growth - 100%+ over the past several years. It has doubled its employee strength in the past year and has built up a local R&D in Bangalore. The company has also expanded into newer categories like smartwatches, besides launching over 20 new products in the audio category in FY21.
Talking about expansion, Gupta says, “We hope to achieve our FY 23-24 target of Rs 1000 sooner than expected. We are boosting our D2C channel and also exploring social commerce strongly. Besides this offline will be key to our growth.”
- Bestsellers: AirDopes, TWS earphones and Rockers Wireless Headphones
- No. of employees: 150 Across Delhi, Mumbai, and Bangalore
- Revenue: grossed Rs 704 crore mark during FY20
- Repeat customer ratio: 30%
- Units sold per day: 14000-16000
The Daddy of Babycare
Varun Alagh, Co-founder, Mamaearth
Mamaearth is a purpose-led digital-first brand, conceived as an idea to provide toxin-free babycare products, it is a brand created by millennials, for millennials. Sharing the idea when this D2C startup was conceived, Varun Alagh, Co-founder, Mamaearth says, “We wanted to connect with the millennial audience directly and make ourselves available to them. Being D2C helped us seek feedback and constantly reinvent and innovate to provide our consumers with solutions that help provide solutions to millennials' concerns.”
Being a digital-first brand, the share of online is significantly higher forMamaearth. However, since 2020, they have been aggressively expanding their offline presence as well. “Currently offline is contributing to about 20% of the total revenue which we are hoping to increase in the coming year,” shares Alagh.
When Mamaearth was started in 2016, it was bridging the gap in the market by creating toxin-free baby products. Millennial parents are constantly on the lookout for safe products for their babies and everyone is looking for solutions online. Hence it is important to be present where the consumers are, and hence online presence is pivotal. Emphasizing the same, Alagh says, “One of the biggest learnings from the D2C channel is that the turnaround time of consumer feedback, innovating, and providing the products to the consumers is significantly lower.”
As new parents, Varun and Ghazal were scouting the market for the safest baby care products that were toxin-free. Unfortunately, they did not find a single brand that met the specifications. That is when the idea of making their own products using natural ingredients came up. “Since we knew firsthand what our baby needed, we created the products accordingly. Our first batch of products included a baby lotion and mosquito repellant. Both these products are always in demand for babies. We used natural ingredients to create them with zero chemicals. The ‘Made Safe” certificate added to the credibility of our products as parents need reassurance while buying baby products,” adds Alagh.
Mamaearth’s acquisition strategy is purely focused on digital content. “We want consumers to read about the problems that our products solve and why our products are the best in the market. We are also innovating constantly to stay relevant and cater to the dynamic market needs,” states Alagh. E-commerce in the rural markets has witnessed steep growth. Currently, over 50% of sales for Mamaearth come from outside of the top-10 cities. Eventually, they plan to expand their presence in Tier II and Tier III cities. Mamaearth is present offline in stores across Delhi, Mumbai, and Bengaluru and plans to expand to 100 cities in 2021. Being a digital-first brand, their products are also available across multiple online channels along with Amazon, Flipkart, Firstcry, and Nykaa and their own website and app.
- Best performing online sales channel – Own website
- Best social media app for marketing - Instagram followed by Facebook
- Best selling products - Onion range, Vitamin C range and Ubtan range
- No. of employees– 200+
- Current Turnover - 112 Cr in FY 2020
- No. of SKUs – 120+
This beauty disruptor is changing the cosmetic industry
Vineeta Singh, Co-founder & CEO, SUGAR Cosmetics
Retail space is super precious and expensive in India and the only way for SUGAR Cosmetics to prove product-market fit and demand was to ace this in the first two years of the brand. So D2C was not only the chosen way – it was the only way for them. Reminiscing the same, Vineeta Singh, Co-founder & CEO, SUGAR Cosmetics says, “When I look back, I know that it helps us control the brand narrative and be closer to the consumer for feedback during the initial phases - both priceless.”
SUGAR was founded on three pillars: listening to consumers, staying away from discounting, and focusing on content for the consumers. SUGAR has always been the anti-establishment, more creator-than-celebrity-led voice in a cluttered market. SUGAR was initially launched with just two products due to working capital constraints- a black kajal and a black matte eyeliner. Soon, the eyeliner went on to become a bestseller and paved the way for future launches.
The products are manufactured in facilities across many countries like Germany, Italy, India, the USA, Korea, etc. As for SUGAR’s supply chain, they have a presence across retail stores including standalone and online marketplaces along with D2C channel shipping directly to customers in 18000+ pin codes all over India. While FY 19-20 saw a split of about 60% offline and 40% online the brand rapidly expanded its retail channels and in FY 20-21 saw getting back to almost 50% of its sales from online channels. Pointing out few major learnings from her journey of building SUGAR Cosmetics, Singh mentions, “The visual image of your product is the first contact your consumers have, so it’s always important to create a great first impression. Another learning would be – build content that’s educative, engaging, and relatable rather than just hard pushing your product.” Going forward, the brand aims to expand to 40,000+ retail outlets over the next 12-18 months compared to the 10,000+ currently. Even during the pandemic, they have launched approximately 10 exclusive retail outlets and kiosks and are even looking at international presence beyond the US & Russia where they are currently present.
In the past year, SUGAR has doubled down on content and expanded to high-quality and longer-format video/text content, keeping it very educational. This paid off as they were able to reach 6M+ following across all the digital platforms. They also saw increased traction on the brand-owned app which crossed 1M+ downloads with a 4.6+ rating on iOS & Android.
- Best performing online sales channel - Brand website
- Best social media app for marketing - Instagram
- Best Selling products - From Lips Category – Smudge Me Not Liquid Lipstick; From Face category - Ace Of Face Foundation Stick and from Eyes Category - Stroke Of Genius Heavy-Duty Kajal
- No. of employees- 2000+
- Current Turnover - last year's revenue was INR 105+ CR
- No. of SKUs- 500+
The Tea Freak
Bala Sarda, Founder, Vahdam India
Tea is one of the healthiest beverages after water. India grows 25% of the world's tea and in addition, India is also a magical land of ingredients and superfoods like Turmeric, Moringa, Ashwagandha, Tulsi, Giloy, and more. Turmeric is one of the most trending and high-growth superfoods. India produces 80% of the world's turmeric production. All of these products have strong wellness connotations which have been accepted by people globally. All of these originate from India, but no home-grown Indian brand has actually taken it global. That is where a 23-year-old Bala Sarda saw an opportunity. He founded Vahdam India in 2015 taking India’s finest teas and superfoods to the world under a sustainable, home-grown brand. His idea was to make available a much fresher, higher quality product to the customers directly from the source, devoid of any middlemen. In these last six years, Vahdam has shipped to 2 million customers closing this Financial Year with 159 crores in revenue while turning the venture profitable. Shipping to 130 countries with the USA, Canada, UK, Germany, and now India, being the key markets, Vahdam became one of the largest digitally native consumer brands in the country.
Talking about building a global brand from day one through the Internet as the medium, Bala Sarda, Founder, Vahdam India says, “We shipped to 50 countries in the first year of operations which would not have been possible had it not been for the Internet and the fact that it is a digitally native brand. And more importantly, this is a model which can be replicated in multiple markets.”
In the US, Vahdam is now omnichannel with its presence in 800 doors in premium retail chains including Nordstrom, Neiman Marcus, Bloomingdales, Saks Fifth Avenue, Bergdorf Goodman and also in Wegmans, Macy’s, Erewhon and Sprouts Market. In fact, the brand formally entered the Indian market only early last year.
The pandemic has accelerated Vahdam’s growth, given the shift towards wellness products, larger adoption of e-commerce globally, and a more effective execution capability with a strong leadership team in place. Sharing the expansion plans, Sarda says, we plan to continue to grow by focusing on three key growth triggers i.e going deeper in our current markets (USA, Canada, UK & Germany) and grow our omnichannel distribution, strengthen our presence in new markets like India and diversify into other relevant product categories.” As of now, India contributes less than 10% of the overall revenue, while 90% of the revenue comes from international markets.
- Bestseller - Turmeric Range of Herbal Teas
- Team size - 400 (150 white-collar & 300 blue-collar)
- Repeat customer ratio - 35-40%
The Duo behind the Tesla of Chicken
Abhay Hanjura & Vivek Gupta, Co-Founders, Licious
Although 73% of Indians eat meat and seafood, the industry is highly unorganized. An average Indian household consumes 2000-3000 different branded products, meat being the only exception (well, almost). More than 95% of the fresh meat and seafood industry in India is unorganized and usually conjures up an image of an unhygienic local market, filth, stench, and an unpleasant buying experience. Abhay Hanjura approached Vivek Gupta (then working with Helion ventures) to explore the space of fresh meat and seafood delivery in India. The duo wanted to change the way Indians experience meat. Abhay and Vivek were having lunch while discussing the business idea. The chicken they were having was of really bad quality. Vivek remarked that, if we have to build Licious we will have to put life in this dead chicken! That was the moment they realized what they wanted to achieve through Licious.
Talking about the challenges, the duo mentions, “Back in 2015, when we started operations there were no quality standards or processes in place, no farm-to-fork model, no continuous cold-chain! We couldn't depend on modern retail for the sale of products because they couldn't guarantee the 0-4 deg temp controlled environment that is a must for our products. There was an overall dearth of knowledge about meat handling and processing. We had to work towards upgrading the entire ecosystem to ensure we can actually deliver everything that we envisioned. The fact that we own and operate a proprietary supply chain gives us many advantages.”
Today, Licious is one of India’s largest D2C meat and seafood brands. All Licious' products go through more than 150 quality checks through different stages of procurement & processing until it reaches the consumer's doorstep. Licious owns the complete supply chain end-to-end. Their Processing Centres (total 5- one each in Mumbai, Delhi, Hyderabad& 2 in Bangalore) are compliant with global standards and provide respectable jobs and livelihood to many butchers (Licious calls them meat technicians & meat handlers).
The company is also reinventing authentic Indian cuisine through its range of ready-to-cook products that include regional delicacies like – sheikh kebabs, galouti kebabs, chicken ghee roast, mutton chukka, prawn sukke etc. Licious also introduced India to chicken and prawn-based ready-to-eat spreads. When asked about the split between offline sales and sales through e-commerce channels, the duo answers, “The Licious app and web accounts for 98% of the revenue at this point of time. However, we plan to significantly strengthen the offline presence during the next three years.” The brand also sells some of their RTC with a higher shelf-life and meat and seafood-based spreads through select modern retail.
At Licious, the business saw a 300% growth during the greater part of the last financial year and continues to hold on to the momentum. While all product categories saw growth, the ready-to-cook and ready-to-eat categories contributed significantly to the revenue. Currently, Licious delivers more than a million orders per month. The average basket size per consumer grew by 30% too. The company has enjoyed a repeat purchase rate of 90% and continues to enjoy the same. Licious operates in 14 markets across India, namely Bangalore, Hyderabad, NCR, Chandigarh, Mumbai, Pune, Chennai, Jaipur, Coimbatore, Kochi, Puducherry, Vizag, Vijayawada, and Kolkata. Over the next year, Licious will continue to expand to 10+ Indian cities. A global expansion is also on cards in near future.
- 100 Delivery centres
- 3500+ employees
- Raised $90 million funding so far
- Served 1 million+ unique customers till date
The Kid Draper
Rahul Anand, Founder, Hopscotch
When Rahul Anand observed social media had exposed the Indian consumer to the world of kids’ fashion, and parents across India had a deep, pent-up desire to dress their kids in the latest fashion trends – he thought about Hopscotch. “By cutting out the middleman and going direct to the consumer, we offered unparalleled value to the consumer and built the kids fashion category in the country,” admits Anand. When other brands are taking the omnichannel route even after starting digital-first – Hopscotch remains 100% digital-focused. That said, there are resellers who take advantage of the value they offer, source through their online store, and distribute offline.
A typical fashion brand has big teams of buyers, designers, and factory sourcing specialists who operate on 3-6 month-long development cycles. By the time items enter stores, the market has moved and 40+% of items produced have to be heavily discounted. The waste in the system forces brands to work on 400% margins, making brands unaffordable to the Indian consumer. This forced the founder to be disruptive with the way the company designed its supply chain to ensure they could offer the consumers aspiration along with affordability. Sharing insights, Anand mentions, “We use machine learning data models to help identify emerging fashion trends. Our vendor network can supply us in 2-3 weeks. This intelligent and highly responsive supply chain ensures we buy the right inventory. As we have minimal markdowns and inventory liquidation, we can offer sharp price points to the consumer.”
Moms make 90% of purchasing decisions when it comes to their kids. While keeping the engagement high, Hopscotch has successfully served over a 3.5million customers. Adding to this Anand says, “The average consumer visits Hopscotch once a week and as her kids keep growing, she is constantly shopping for different occasions - parties, formals, sports, athleisure, sleep, and ethnic wear. Kids' needs are never-ending. Moms are willing to do what it takes to ensure their kids are well dressed and stand out in the crowd provided you offer them value.”
The market is starved of on-trend, fashionable kids’ apparel. Retailers (online and offline) are keen to feature Hopscotch and serve their consumers with pent-up demand. When asked about the growth, the brand witnessed in the Covid period Anand says, “We’ve seen unprecedented growth in online adoption, and especially in smaller towns where consumers are starved of strong selection and affordable offerings.”
- No. of employees: 300
- Amount of external funding received ~Rs.450cr
- Current Turnover: 500cr
- No. of SKUs: 40,000
The Vegan Halo
Shankar Prasad, Founder, Pureplay Skin Sciences - Plum, Phy and BodyLovin'
The company has seen evolution take place in the health and beauty segment. The evolution of this segment has been called a sudden emergence according to Shankar Prasad, CEO of Plum. Plum is said to be one of the few early evolutions of the category and some of the factors underlining this evolution were highlighted by Shankar himself. According to Shankar, distribution was one huge advantage that lasted for decades with the incumbent but now since the distribution barrier has shattered, not in a very grand, Berlin-wall kind of a way; new brands have been continuously flooding the market. Digital media has been one more factor as people have been engaging more with the brands on their social media accounts and the brands are now better placed and more open to answering the questions that are being asked by consumers and the last factor is more customer awareness. The customers are aware of the harmful products and with the help of Google and the Internet, they can search what ingredients are harmful and in what way. Hence, they do not need to be told what is good for them and what isn’t.
“India is a problem solution market”, says Shankar. Earlier, problem-solving was different. The only thing that has changed is the how of it. In contemporary times, the brands have started talking about ingredients and consumers are drawing the inference in their minds by using Google so as to understand the merits and the demerits of using a particular ingredient. A decade ago, the whole scenario was different because the big brands used their status, and the fact that their product worked broadly was an incentive. People are isolating ingredients rather than use a mixture of many. “This evolution started seven years ago when we were in the early process of this and it is still ongoing and will continue to be there for at least 2-3 years,” adds Prasad.
According to Shankar, there is a danger in being half-scientific about things. The science of the product starts from what ingredients are being used, what is the source of those ingredients, are there any impurities in the ingredient, what other ingredients are being added to the formulation, how is the formulation made, what is the sequence of addition, etc. People have started understanding the fact that not everything in a shiny bottle is good for them. Instead, they have started turning the bottle and looking at the ingredients that are being used in a certain product.
The mixing and matching of products have Shankar convinced that the Indian market has more headroom for growth than its Western Counterparts. He believes that people have been mixing products for quite a long time and people would have 3-8 different brand products in their closet. Even though the companies assure their consumers regarding the ingredients they use or the formulation, yet they should be more cautious while making the products so as to avoid harmful chemical reactions on the skin of a consumer.
- Founded in 2013
- 100% vegan & cruelty-free products
The Lingerie Maker
Pankaj Vermani, Founder and CEO, Clovia
Lingerie has always been talked about in hushed voices in our country. It has always been an uncomfortable experience for women to shop from physical stores as they were mostly run by men. Both Neha and Pankaj Vermani felt that the evolution of this category in India had not kept pace with the fast-changing outerwear fashion. Talking about the idea behind launching Clovia, Pankaj Vermani, its Founder and CEO says, “We realized that there exists a major gap in intimate wear for women in India. Upon deeper research, we found that the prevailed distribution channel restricts the flow of customer feedback back to the brand and therefore, there was a lack of innovation and variety. To bridge the existing gap in the lingerie business, we decided to take the plunge into this business. At the same time, we were joined by our co-founder Suman, a lingerie expert, and Clovia happened!” Clovia has further combined fashion with tech where they use smart technology to monitor the sales trends and patterns on the website, app, offline stores, marketplaces and then manage the inventory basis the consumption patterns and decisions of the customers. Their proprietary Clovia Curve Fit Test has helped almost 600k women so far to understand the right size for them. The brand recently started retailing through offline channels but 85% of Clovia sales still come from online channels.
Despite the ongoing dip in businesses across sectors, Clovia witnessed great inclination in casual and comfortable clothing in the last few months due to the prevailing work-from-home scenario. “We have noticed a 100% growth in FY'20 over FY'19 with our own online store now almost 15% month on month. We grew our sleep and loungewear line multifold, doubled down on innerwear in the last three quarters. We observed a 9X scale in sleepwear and loungewear, a 6X scale in Maternity lingerie and feeding nightwear, and a 2X scale in Clovia's customer partnership program,” shares Vermani. With improved margins and repeat business from existing customers, the brand achieved profitability post lockdown with a double-digit EBITDA.
Sharing the current revenue run rate, Vermani says, “Clovia is currently at a run rate of 250 crores selling 1 piece every 3-4 seconds.” Clovia recently forayed into the personal care category – Botaniqa – an entire range dedicated to the needs of new moms and has come with 18 new products. Talking further about the expansion plans Vermani says, “We are planning to see Clovia’s presence in at least two more international geographies. Meanwhile, we plan to triple our offline store count in the coming year.”
- Team size: 200 people in HQ + 400 women staff on ground
- Biggest sales channel: Own brand website
- Revenue: ARR of 240 cr+; 100% growth in last 6 months itself
- Units sold: 1 unit sold every 3 seconds
- Data enabled: 140 mn data points across 3 mn women crunched to perfect the product/service
The King of Grooming
Shantanu Deshpandey, Founder & CEO, Bombay Shaving Company
A stray conversation with a friend who was then interning at Hipster New York shaving brand Harry's regarding blades, shaving creams, and men’s grooming solutions got Shantanu Deshpandey thinking if there could be an opportunity in India? “I spoke to family, friends and general consumers about their shaving habits and one thing became clear – nobody really wanted to shave. In fact, many men hated the daily ritual and, if given the option, would not shave. I realized that an opportunity existed in India – and that men grooming as a category was a large, underserved, and monopolized market that needed a brand disruptor,” shares the Founder & CEO of Bombay Shaving Company. The aim was to introduce a brand that offers fuss-free grooming solutions to men and encourages them to invest time and money into personal grooming.
Bombay Shaving Company (BSC) is among the first of the 'D2C brands' and built its D2C skills across content, technology stacks, data analytics, and performance marketing. These skills have attracted global giants like Colgate and Reckitt to invest in the brand. BSC is now the #2 shaving consumables company online in India and there are early signs of it being a serious challenger offline too. For e.g., they have a 15% share in Metro Cash and Carry in the shaving category. “We are taking on large organizations in deep consumer categories and reinventing the way the category has operated till now. We have started to create an independent category of solutions for women’s hair removal, which till date has been relegated to a subsection with products copied from men’s solutions,” shares Deshpandey.
Being a homegrown brand, BSC is steadily going back to its Indian roots to bring in products that are great for the health of customers and for the planet. As an Omni-channel brand, it has disrupted both digital commerce alongside modern-trade shelves by bringing men’s grooming products that are powered by Superfoods like Turmeric, Charcoal, Coffee, Aloe Vera, and Onion. All these solutions are big category disruptors and unique to the brand.
Currently, BSC generates most of its revenue from online channels, as compared to offline channels. Within the online channel, the company generates a significant percentage of revenue from marketplaces such as Amazon, Flipkart Nykaa Big Basket, Myntra, and others. The remaining revenue is generated from the company’s own D2C website. When questioned about the retail strategy, Deshpandey says, “We are striving to strengthen the company’s offline presence and retail expansion. As of February 2021, Bombay Shaving Company is present across 15,000 retail touchpoints. Also, BSC has diversified geographically, and is now available in four countries in Southeast Asia.”
As the COVID-19 pandemic and subsequent lockdown confined people to their homes in 2020, the rapid acceleration in the adoption of digital platforms by consumers for personal care product purchases helped Bombay Shaving Company witness strong growth trends. Not only did they manage to reach INR 8 crore a month in terms of revenue during the year, they also raised INR 45 crore from British multinational consumer goods major, Reckitt.
- Established in: 2015
- Team size: 150
- Current turnover: gross ARR of 100 cr and aiming to hit 150 cr in next 3-6 months.
The Doting Fathers making children learn through play
Vivek Goyal and Dinesh Advani, Co-Founders, PlayShifu
Dinesh and Vivek have been longtime friends since their IIT Kharagpur and P&G days. Back in 2016, when they met after a few years, both discussed their concerns about how inseparable children and technology/screens are today! Dinesh’s son was four and Vivek was a new dad. The duo discussed a few ideas of how they could merge tactile and digital play. Together, they pulled a team of five and after extensive research, zeroed in on Augmented Reality! Talking about the idea behind what we today know as PlayShifu, Vivek Goyal its CEO and Co-Founder says, “A child's brain development in the early years (3-11 years) is centered around play and entertainment. But today, children spend over four hours every day on screens (mobiles, tablets, and laptops). And that’s when it became clear that screen time had to be more hands-on.” This idea opened up unlimited possibilities to merge learning and play. Today, PlayShifu operates at an intersection of three industries: Toys, Gaming, and Education. Their first product and also the bestseller is Orboot Earth – the first-ever Augmented Reality globe for kids. The team did a very successful Kickstarter campaign that gave them backers from 100 countries and $100k to start their journey with Orboot. “Nine months and several iterations and upgrades later, our team of nine people finally brought the magic to life in 2017. We were able to place ‘the whole world’ in the hands of children - for them to explore all its secrets, from cuisines and culture to inventions and fantastic facts,” shares Goyal. Children could scan the globe and bring to life all the wonders of the world, in 3D! After Orboot, they launched Plugo, an AR-powered gaming system to build STEAM skills through story-based challenges. Soon, they will be launching their third flagship, Tacto, which is the first-ever phygital board-game system that turns any tablet into an interactive board to play with real figurines.
Talking about their split between offline and online sales, Goyal mentions, “On a typical day, our US sales are 60% online and 40% offline. With the lockdown and pandemic, there has been a drastic shift in favor of online sales.” While COVID-19 disrupted many businesses, it had a positive effect on PlayShifu. They saw a 300% surge in demand for educational tech products after lockdown and grew 600% in April 2020 vs. 2019. Emphasizing the growth, Goyal adds, “We started the year with being present in 15 countries and ended 2021 on a high note of being present in more than 35 countries. Our number of users has also gone up from 250K to 600K in the same period.” Going forward the plan is to expand the product range from 12 to 30 products to cover over 20 early-learning skills by 2022.
- Team size: 120
- Raised $17 million in Series B in April 2021
- Turnover (Rs. in crores) in 2020 - 132
- Business Growth Rate y-o-y - 150%
- Over half a million children use PlayShifu products
The Superfood Specialist
Suhasini Sampath, Co-Founder, YogaBar
With the fitness market booming and new brands popping up with an array of products, YogaBar stands true to its ideals of giving a “Healthy Snack”. While the focus on D2C has primarily happened because of the pandemic owing to the consumption shifted online, the nature of products for YogaBar has always remained more or less healthy products like oats or peanut butter. Conveying the same, Suhasini Sampath, Co-Founder, YogaBar says, “The focus was primarily like an FMCG company. With the D2C focus we were at 10% for online sales but now that ratio is significantly greater.”
When YogaBar started its journey six years ago the founders used to go to retailers and ask them to stock their products. Fast forward five years from then, healthy food is probably the fastest-growing category amongst all marked categories in health. Being an early mover in the niche, they were the only player who had the cleanest ingredients, being a nutrition label. “We’ve seen a lot of benefit of being very early in that game because till date we don’t even have a marketing team but we’ve been able to grow fairly large and all of our new product introduction come under mainstream categories,” shares Sampath. “Earlier, we couldn’t have imagined taking on Kellogg’s but we are now, equally or more popular than them today,” she adds.
Sampath got welcoming support from the retail industry. Talking about the encouragement she got as a woman entrepreneur, Sampath says, “You wouldn’t believe like the really big retailers including Godrej Nature’s Basket, a lot of buyers gave us a lot of support and that is how we started and I actually think being a woman entrepreneur has played to our advantage because then people are more ready to help.” It was a natural pivot given the fact a lot of offline retailers weren’t able to sell and online retailers upped their game and started reaching customers really quickly during the pandemic. “The change was driven by what was happening in the economy naturally,” admits Sampath. They started selling a lot on Flipkart, Amazon, BigBasket and alongside built their own website. Currently, YogaBar sells its products 60% offline and 40% online. When asked if this split is going to reverse in the future Sampath mentions, “I feel until the next year the ratios are going to remain like this, post that it remains to be seen what happens with things settling down with Covid.”
For Yogabar, the offline model is an extremely profitable model. It is extremely easy to start an offline business. You also understand repeat. It is easy for customers to see the brand. Online is very expensive but online you can reach your competitor’s customers by targeting them right. When asked about the comparison Sampath says, “India is a traditional economy in which FMCG businesses are being largely driven by offline, I would say that is a trend that is here to stay for years. I think at least 80% will still be driven by offline.”
- The individual bars sell more offline
- 200 people crew
- Targeting 100 crore revenue in a couple of months
The Homeware Innovator
Ayush Baid, Founder, Ellementry
On analyzing his family's export business while pursuing a data analytics program at UCL (University College of London), Ayush Baid saw an untapped opportunity for elevated kitchenware and dinnerware in the Indian market. “The existing, largely unorganized market paid little attention to design and food safety leaving a gap that could be filled with branded, handcrafted products centered on sustainable design, product multifunctionality, and aesthetics,” mentions the founder of Ellementry.
The availability of his family business' extensive manufacturing facilities, his data analytical skills, and knowledge of changing consumer spending trends online ensured the growth of Ellementry. “That is how I thought of Ellementry in 2018. Today with an e-commerce website, eight retail stores, various SIS locations, and numerous boutique stores, we reach our many loving customers and 1.57 lakh Instagram followers,” adds Baid.
With this Ellementry is providing full-time employment to more than 4000 artisans. The beauty of their hands, combined with the knowledge passed down from the ages, makes the products soulful. “We can go from concept to end product in a span of a fortnight. Through our in-house manufacturing facilities, we can not only control our products' quality and standards, but we directly pass on the cost benefits to our customers,” states Baid.
Ellementry encourages basic sustainable living in people, promoting handmade products made of earth-friendly products while reviving cultural roots with a modern silhouette and adhering to international food safety standards.
The lockdown saw increased consumer focus on home and home-cooking plus increased online spending, and Ellementry was uniquely positioned at the intersection of these elements. Talking about the split between offline and online sales, Baid says, “There is a 40:60 split in our offline sales and e-commerce channels, respectively.” They capitalized on this opportunity with focused product offerings, social media outreach, and customer engagement.
Through its e-commerce site, Ellementry is entering the US markets through an online presence on Amazon and tie-ups with boutique stores. Sharing more on this, Baid says, “We are also inking a solid presence in the Middle East, Southeast Asia, and Europe markets. Due to our clean and functional designs, we are also getting many inquiries from the Scandinavian countries.” Another goal for 2021 is to make Ellementry, one-stop solution for all your home improvement.
- Team size: 80
- Turnover: Ellementry earned revenue of INR 24Cr in the last financial year.
Staying true to Food
Puru Gupta, CEO, Co-Founder & Sreejith Moolayil, COO, Co-Founder, True Elements
The story of True Elements stems from personal tragedies and is related to lifestyle health issues faced by both the founders. In a span of three years, while Puru lost his father, Sreejith lost his father-in-law due to lifestyle-related issues. That drove the duo to think about food and health in India. For close to six years, they spent every waking hour thinking about a brand that was 100% dedicated to the cause. “It took us no less than five years and a solid background of working with not one but two fitness brands to bring together a team of nutritionists, food technologists, industry thought leaders, and food scientists – people who could work on products, technology, sourcing, and instituting method-driven processes that could bring consistency to our production line. But that was only one part of the story, the other was finding farmers growing or willing to grow ingredients that were part of our home-grown list. We rooted for ingredients such as jowar, ragi and bajra and, of course, seeds like sunflower and chia that were native to Maharashtra, as our sourcing area was confined within the state limits,” recalls Moolayil. The only ingredient that they got from outside India was oats given the branding needs.
“By providing food that ranges from "nashta" to "tiffin" (depending upon which part of the world you are in), we aim to be India's most trusted Whole-food plant-based Nashta brand,” shares the duo. In terms of sales, 70% is currently through E-commerce and 30% is through offline. With the recent round of funding, they aim to create more awareness about the brand and visibility. With the objective of bringing transparency and a clean process, currently, they process 100% of products at their own facility based out of Pune.
This financial year, True Elements will be entering few new categories with a lot of innovative products. In terms of channel, they are chasing a 10000 store offline reach beyond going deeper in current eCommerce channels. Talking about the business changes during Covid, the founders say, “We didn't have any disruption due to covid in operations and the challenge was meeting increased demand due to supply issues. We launched industry-first food traceability during covid to build trust amongst consumers for packaged food. We also launched few products with immunity in mind during this time.”
- Clocking 70Cr ARR
- The team strength is 200+
The Coffee Man
Bharat Sethi, Founder, Rage Coffee
The journey of Rage Coffee started with a simple thought to solve a personal problem - How to get a great tasting coffee at a reasonable cost, without shelling out too much money in cafes or spending much time brewing one. “I started conducting surveys and identified that the coffee market had huge potential and many unserved gaps. In fact, there was hardly any lifestyle aspirational brand built around such an emotional subject that is ‘coffee’. As the category remained largely underserved, was devoid of any real innovation, and underpenetrated online, it provided us with a unique opportunity to strike a balance between affordability, consumption, and quality that was missing,” shares Bharat Sethi, Founder, Rage Coffee. That is when he decided to focus on ingredients, formulations, manufacturing techniques, packaging, and direct-to-consumer distribution to bring a premium quality product with a unique coffee experience to everyone. He used feedback, data and engaged in extensive R&D to deliver a premium quality coffee for all.
They produce, manufacture and distribute different varieties of coffee, without using any chemicals and all products are gluten-free, vegan-friendly, and nature-considerate. The company has also created craft coffee that is instantly consumable, affordable - ready to mix - and is convenient to carry in PET recyclable tube shots. Every 3.25 gms tube shot contains 275 mg of all-natural plant extracts for that perfect kick.
Rage Coffee employs an omnichannel approach, selling 50% online, and the rest offline. For online, about 75% of sales are through its website and 25% through e-commerce platforms. Rage Coffee is available on all major online platforms in India. Along with Delhi-NCR, Hyderabad, Mumbai, Pune, Bangalore, and Chennai being the main hubs for online sales of Rage Coffee, the brand is clocking its maximum offline demand coming from tier-II cities such as Jaipur, Ahmedabad, Kochi, North-Eastern States, etc. The products are available in more than 600 retail outlets. Moreover, the company has recently entered the US market through Amazon. It also has a small amount of distribution to the UAE and Australia. During Covid, they experienced a 300% surge, registering a 4X increase in both offline and online sales during the lockdown.
Since its inception in 2018, Rage Coffee has been speedily scaling up to new geographies while expanding its offline network (from 5 to 20 distributors) and covering more than 600 retailers pan-India. In fact, if we look at their offline demand, it is coming from tier-II cities such as Jaipur, Kochi, Ahmedabad, North-Eastern States, etc. In addition, Delhi-NCR, Mumbai, Pune, Hyderabad, Bangalore, and Chennai are currently the main hubs for online sales of Rage Coffee.
Rage Coffee’s target is to clock 3X revenue growth from US$2million up to US$ 6million by the end of 2021.
- launched in: 2018
- over 500k products sold
- total of 35 full-time resources
- The current turnover is clocked at US$2 million.
The Man Who Made it Easy to Clean Up and Sit
Vikas Bagaria, Founder, Pee Safe
With the first product Toilet Seat Sanitizer, Vikas Bagaria wanted to make sure that no woman has to suffer from the fatal disease of UTI and other toilet infections, and he was adamant about starting it himself; he also wanted to ensure that he took responsibility for reaching out to the masses and making a difference. This is what led to the start of the D2C journey of PeeSafe.
Talking about his entrepreneurial start, Vikas Bagaria, Founder, Pee Safe says, “While driving from Gurgaon to Gujrat with my wife Srijana, we came up with the idea for the first product, a toilet seat sanitizer. Srijana contracted a potentially fatal infection known as a Urinary Tract Infection while on the trip. To me and Srijana, it was obvious that a toilet seat sanitizer was important in combating these deadly infections. That is where the first product, Toilet Seat Sanitizer, and the company name 'Pee Safe' were born.”
Currently, the retail split between offline and online sales is 50-50, and the e-commerce section includes their own website, which generates a significant number of orders across the country. When asked about getting the initial product right, Bagaria says, “In 2013, we launched our first product - Toilet Seat Sanitizer. Technically, we continue to look for ways to improve personal hygiene in order to provide the public with a healthy lifestyle. We were the first to develop a toilet seat sanitizer to assist people in having a germ-free/UTI-free toilet experience, and our popularity has only grown since then. It was, in my opinion, the right identification of a need at the right time.”
In the last year, Pee Safe has significantly broadened its horizon. From opening its first retail store in India to having their personal hygiene products present in approximately 15 other countries, they have been focusing on more ways to reach as many people as possible with a sense of being unique and innovative through the products they curate and through social media presence. Going forward, Bagaria’s plan is to expand Pee Safe's current reach to approximately 10,000 stores, primarily in Modern Trade across Metro and Tier II cities in India. He wants Raho Safe’s presence to be expanded to 50,000 stores, mostly in general merchandise, across Tier III and beyond in a few states.
- Best performing online sales channel – Own website
- Best social media app for marketing – Instagram
- Best selling products – Menstrual Cups, Toilet Seat Sanitizer, Intimate wash and wipes
- No. of employees - 150
- No. of products- 40+