Abstract
On May 17, 2010, Supam Maheshwari and Amitava Saha founded BrainBees Solution with a seed capital of US$39.01 million, which led to the launch of the e-commerce site FirstCry.com. An online e-commerce website that offers all kinds of baby and kids-focused products from diaper pins to strollers.
The global and Indian baby care market has seen huge growth in the last few years. It is estimated that by the year 2020, the projected growth of this market will be over 17%. The rising birth rate and disposable income of young parents have also favoured the growth of baby care products.
In a country like India, the mortar and brick stores held the major share of the baby care products market. Supam Maheshwari was in the midst of a major decision, but he was faced with some questions. Would he be able to design a unique hybrid model? Would this model help them compete with mortar and brick stores? Would FirstCry be able to build an ecosystem to provide solutions to parents? What strategy should FirstCry adapt for long-term success?
Discussion Questions
Q.1. What are the competitive advantages of FirstCry?
Q.2. FirstCry is India’s biggest baby care product website. Should they go for global expansion?
Q.3. What marketing strategies should FirstCry adopt in the long run?
Q.4. Should FirstCry be threatened by Hopscotch.in, BabyOye.com and MyBabyCart.com?
Early Beginning: Coming of Age
As a co-founder of Brainvisa Technologies Pvt. Ltd., Supam Maheshwari enjoyed the winds of change in Pune. As a young man he spent most of his time in the capital of India as his university was situated there, but when he returned to the small city of Pune, he was pleasantly surprised to see the developments that had happened in his absence. As a first-time parent, he regretted the lack of variety in baby products in the city, so he used to bring toys for his daughter whenever he travelled to the United States and European cities for business purposes.
Fast-forward to the year 2010, a decade had passed with all the significant developments, with Brainvisa becoming one of the world’s best e-learning companies. It was then sold to Indecomm Global Services. Supam had become one of the youngest pioneers of e-learning solutions from the Indian sub-continent.
With all this success, Supam was still not contented. He wondered how a parent in Pune could fulfil their kid’s demand for toys that provided them with fun and learning. He always reminisced about the time when he used to bring his daughter toys from abroad and the big smile he used to get in return.
Building FirstCry: Company Origin
One day Supam called his friend Amitava Saha, whom he knew from his days at Brainvisa, and discussed how he could solve the availability of children-focused brands in the city of Pune. They discussed in detail the demand–supply gap in the domestic market for these products. It was not difficult for both alumni of Indian Institute of Management to develop a solution for this issue. They understood the need to fulfil the gap.
They launched BrainBees Solutions, which led to the launch of the e-commerce site FirstCry.com in December 2010. An online e-commerce website that offered all kinds of baby and kids-focused products from diaper pins to strollers.
The main motto of FirstCry was to change the philosophy of how Indian parents bought toys and other products for their kids. They believed that the parents should order online so they are able to stay home and spent more quality time with their children rather than roam the market for hours to find the right product (Exhibit 1).
FirstCry Leadership
Supam always had an entrepreneurial zest in him from a young age and was always the one to initiate things and come up with new innovative ideas. As a true leader, he would never back out from a challenge. He did the designing and execution of the long-term and short-term plans of the company. He was always there when the team needed him, directing and guiding them to achieve targets (Table 1; Figure 1).
FirstCry Organization Chart.
Global Baby Care Market Scenario
There was a boom in demand for baby care products worldwide. The global baby care product market encompassed various segments, ranging from babies and kids’ diapers, clothes, baby gears and care products, toys, feeding and nursing accessories, etc. The revenue in sales for this market on the global front was US$44.7 billion in the year 2011 and was steadily increasing. The overall estimated increase in total sales, for the baby care product market, by the year 2017 would be around US$66.8 billion (Euro Monitor International Ltd., 2014).
The demand in this sector was on a rise as the population of infants born in developing nations was rising. These countries saw a considerable increase in the disposable income of the new parents. Parents wanted the best quality of products for their children and were ready to spend a hefty amount on baby care products. Parents also demanded products with organic ingredients which would not harm their baby’s health. This led to the rise in the buying trends of baby cosmetic products.
Indian Baby Care Market Scenario
India had the largest population in the world and was only second to China. The birth rate in the country was 51 births a minute. India had more than 21% of the worldwide population of children in the age group of 0–3 years. Hence India had a huge unexploited market for baby care products. The reports generated by the research analysts at TechNavio forecasted that the Indian baby care market would grow at a compound annual growth rate of 17.38% in sales in revenue until 2019 (Sandler Research, 2015).
Evolution of E-Commerce
According to the latest paper of the Associated Chambers of Commerce of India (ASSOCHAM), the oldest and largest Apex Chamber of Commerce and Industry of India revealed that the overall e-commerce market in India would have a 67% jump over last year’s revenues and was likely to reach the US$38 billion mark by the year end of 2016. The industry emerged as the fastest-growing sector in the country. The trends in the report showed that many consumers were shopping through their smartphones, which led to the shift from desktop to mobile devices (The Associated Chambers of Commerce & Industry of India, 2016).
ASSOCHAM, secretary-general, Mr D. S. Rawat believed that the impulse buying by the consumer in India through smartphone devices had increased, and there was a gradual evolution of e-commerce into mobile m-commerce. This was growing rapidly and added as an extra supplement to boost the e-commerce industry. Out of every six customers, at least two preferred to shop online through mobile devices or tablets since they trusted online payments and convenience.
The ASSOCHAM paper added that this evolution of e-commerce was predicted to contribute about 70% of the total sales in revenues. This would prove to be a game-changer.
Building FirstCry
BrainBees Solutions Pvt. Ltd. owned the FirstCry.com and GoodLife.com brands, exhibiting over 5,000+ items from 250+ top international and Indian brands. It was a one-stop destination for personal care and lifestyle essentials. FirstCry was able to grab the opportunity that the baby care product market in India offered products for kids, baby care and maternity care.
With the dynamic leadership of the Supam and Amitva, FirstCry collaborated with over 300 international and national vendors. They stocked products from maternity wear to accessories for nursery, clothes for kids, diapers, strollers, toys, school gear, etc.
Supam Maheshwari was happy with the rise in the customer base of FirstCry. He believed the main competition for FirstCry was from the mortar and brick retail stores. To counter the competition, he knew he had to come up with some unique strategy. After a lot of research, he decided that FirstCry should start an offline store. In June 2011, FirstCry launched their first mortar and brick store. This made them the first e-commerce company to be recognized as a hybrid store. The subtle planning and execution of this hybrid store helped FirstCry.com get over 70,000+ items and over 400+ top international and Indian brands viz. Hot wheels, Ben10, Zapak Pigeon, Funskool, Nuby, Farlin, Medela, Pampers, Disney, Barbie, Gerber, Mattel, Mothercare, etc.
The Store Strategy
The offline store was spread over an area that ranged from 1,000 to 2,000 square feet, with 32” touchscreens. The policy of the FirstCry was to offer the same pricing for a product. The touchscreens gave information about the product in the offline store and its subsequent price on an online portal to the in-store customer. Thus, it created a unique integrated working hybrid model and provided a flavour of the online experience to the customer. This was possible because of the robust logistic model at FirstCry. The warehouses worked around the clock across all major cities in partnership with their own logistics arm, XpressBees. It ensured prompt order processing, delivery and delight to its customers. This helped FirstCry save 13% of an individual customer order.
FirstCry had stores in major cities all over India and planned to reach up to 400 stores by 2017. This expansion was only possible through franchise routes, and FirstCry had a dedicated team involved in screening, selecting and setting up the franchise stores. This dedicated team did all the rigorous work, including Point of Sale software, training the staff, stock selection and the design of the store (ET Retail Bureau, 2014). By providing the overall assistance and ammunition needed to set up and run the store, FirstCry made sure that the franchise owner did not have to work with many vendors (Table 2).
FirstCry Operating Metrics.
The Brand Strategy
Along with the various international and national brands in their wagon, FirstCry launched its own apparel and footwear viz. Babyhug and Cutewalk. These two brands contributed over 20% to the revenue. The products sold under these two brands had a good recall capacity among its customers, and the founders were confident enough that these brands will raise around ₹350–400 crore in the coming years.
FirstCry did not believe in spending a single penny on mass media advertising which they initially did. They realized that spending heavily on mass media channels of advertising was a costly affair with a very low return. Most of the advertising at FirstCry was through word-of-mouth and some amount of online advertising.
FirstCry’s biggest form of advertising and marketing was that they would directly reach parents-to-be by giving them a FirstCry box. It was given to the mother before going to the hospital. The box was beautifully crafted and contained a sample of products of different brands. The overall range of this box was around ₹700–1000 of the sample products. The FirstCry box also contained coupons that the customer could use at its offline stores for only their first purchase.
FirstCry was working in collaboration with almost 6,000 hospitals all over the country. This marketing model had a very high return on investment.
The Acceleration
With a great team at their disposal, Supam and Amitava led FirstCry to new heights. It all began with SAIF Partners trusting the idea of the co-founders. They had invested US$4 million in the company back in 2011. SAIF Partners again equally participated in series B investment along with IDG Ventures India and helped BrainBees Solutions Pvt. Ltd., which owned the FirstCry.com and GoodLife.com, to raise another US$14 million (IDG Ventures India News, 2012).
Slowly but steadily, FirstCry.com was becoming Asia’s largest online portal for baby products and toys. They further helped achieve their vision when they raised US$36 million from New Enterprise Associates, Valiant Capital and existing investors in 2015 (Adarsh, 2015).
With the constant high shifting of gears, FirstCry became Asia’s top e-commerce platform for baby care, kid’s products and maternity care items. It raised US$69 million over multiple rounds from marquee investors, including IDG Ventures India, SAIF Partners, Vertex Ventures, Valiant Capital and New Enterprise Associates. The Chairman Emeritus of Tata Sons, Ratan Tata, invested an undisclosed amount into BrainBees Solutions, which owned the FirstCry.com brand (Figure 2).
Chief executive officer Supam Maheshwari’s vision was to simplify parenting by developing the required ecosystem. He believed that a positive nod from India’s biggest business tycoon was a great vote of confidence that was needed for continuous growth towards its profitability (Press Trust of India, 2016).
Making the Waves
FirstCry.com was creating all the right waves, as stated in the report generated by FreeWebsiteReport.com. It estimated FirstCry.com for a valuation of US$717,536. It is ranked #6,501 worldwide and generating 327,642 page views daily. Its popularity in India was very significant and 95.9% of customers came from this geolocation. The repeat customer base was an essential for any company, and FirstCry, with over 50% of the customer repurchasing, had proven to be on the top in the Indian e-commerce industry (FreeWebsiteReport.com, 2016).
Key Competitors and Challenges
As the Indian baby care product market was booming, the rise of the threat from competitors was also there. FirstCry, being the first company with a hybrid model of online and offline stores, had competitors who were slowly and steadily trying to snatch the apple pie. The major competitors who could prove to be a threat to their online market share were BabyOye.com, Hopscotch.in, MyBabyCart.com and the e-tailers like Flipkart and Snapdeal who also added baby care products to their site. Along with this, they also competed with the likes of more than 1,000 small brick and wall retailers who sold kids and baby products in their stores.
BabyOye.com, taken over by the Mahindra Group last, specialized in infant care and maternity products for women. Along with the online presence, they had over 100 offline stores all over India.
The former employees of Diapers.com established Hopscotch.in which provided exclusive baby and kid’s brands from all over the world at their doorstep. It created a wave in the baby care product market of India by landing a US$13 million investment from Eduardo Saverin, the co-founder of Facebook. One company in the online baby care product marketplace was doing things differently. MyBabyCart.com had a variety of products for babies, infants, children and mothers, but it provided a unique platform for women entrepreneurs to sell their products online. This encouraged women entrepreneurs to pursue their business dreams (Figure 3).
For any organization to survive in the baby care product market, was a challenge. Organizations had to be spot on in terms of the quality and safety of their baby care products, as every mother was very sensitive about the kind of products they used for their child. The retail experience the brand could offer was another challenge the organization faced. They had to get the right product range and the right retail format (Tanwar, 2016).
The main challenge facing the sector of baby care products was the low global fertility rates. This rate across both emerging and developed countries would impact the future growth of this sector.
The Next Step
The baby care product market was not small anymore, with many competitors entering the field. The recent rounds of investment had gone well for the FirstCry. Supam was extremely happy to see that his hybrid store strategy model was working positively. But he knew that it would be an uphill task to launch the model in various cities across India. With the rising competition, what more should he do to make the hybrid store model a success? What strategy should FirstCry develop to become the ultimate destination for baby care products in India?
Footnotes
Declaration of Conflicting Interests
The authors declared no potential conflicts of interest with respect to the research, authorship and/or publication of this article.
Funding
The authors received no financial support for the research, authorship and/or publication of this article.
Appendix
Company Profile.
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