We will have 100 offline stores in India by the end of this year: FirstCry CEO Supam Maheshwari
FirstCry.com is a leading hybrid online-offline baby & kids retailer in India. Run by Pune-based BrainBees Solutions Pvt Ltd, FirstCry recently netted $15 million in its third institutional funding round led by Vertex Venture Holdings, the VC arm of Singapore's sovereign wealth fund Temasek. This round also saw participation from existing investors SAIF Partners and IDG Ventures. Founded by Supam Maheshwari and Amitava Saha in 2010, FirstCry is operating around 70 offline stores in the country through the franchisee model where its partners make most of the investment in setting up but the firm also pitches in with some commitment. Techcircle.in spoke to Maheshwari to know more about the firm's future plans. Here are the edited excerpts:
You raised $15 million funding from Vertex to take the total external funding to $33 million. How are you using the fresh capital?
The capital is being used mainly to enhance our technology, product and operations. A portion of the money is also being used to open more offline stores in cities across the country. We currently run 70 stores across 58 cities and continue to add four-five stores a month. We will now look to open more stores in Bangalore, Pune, Chennai and Delhi, among others.
By the end of this year, we will have 100 offline stores across the country to beat lifestyle apparels and fashion e-tailer Myntra.com to have the most number of stores from an e-com player in India. By the end of 2017, we aim to have 400 stores across 250 cities.
Some of our offline stores are integrated with our online channel. These stores have exactly the same features that our online stores do. I don't think any other player in the country today has integrated both.
Those who prefer buying via our physical stores are eligible to get the deals offered by our online platform. It allows the consumer to book an order on the screen in a kiosk set up at the stores. The product will be placed on our franchise's behalf, and the consumers can pay there and pick up the items in two-three days.
This integration is working great for us, and the conversion of footfalls has increased dramatically. We are now extending this to all other stores.
We understand that you are shipping 6,000-10,000 orders per day at an order value of Rs 1,000. Can you disclose the exact figures?
I cannot comment on the numbers strictly for competitive reasons. In terms of revenue, we have been doing almost 100 per cent growth year on year and we will continue this rate for some more years.
In an interview with us last year, you had said that you would look at profitability in a year. Have you already achieved the target?
We had certain trajectory in mind when I made a comment on profitability. However, it has changed now, and we are now focusing more on growth rather than achieving breakeven or profitability. It is now the function of growth versus profit. We are improving our business continuously and we are reinvesting the money back to the business. So, it will take some more time before we become profitable.
Can you share revenue breakup? What per cent of the revenues come from online and what per cent from the offline business? How significant are sales coming through mobile?
I cannot share the exact revenue break-up. All I can say is that it's a healthy mix. That said, our online segment contributes a major chunk of the revenues.
Almost 30 per cent of our total viewers come through mobile. In terms of sales, mobile contributes around 25 per cent.
There are a few players in the country like Babyoye and Hopscotch. How do you look at them as competition?
We are not getting any kind of competition from these e-com players. Indeed, Babyoye is on the verge of a shutdown, as it could never raise its Series C funding. I think that it is just matter of few months before it shuts down. E-commerce is a cruel world; you either perform or perish. You need backing of investors to sustain here. Thankfully, we have enough cash to sustain our operations.
Hopscotch is a very insignificant player, as it has barely raised $1 million so far. We don't worry too much about them.
How about expanding the product basket?
We recently added kids' washing machine to our products category, and this product sells like a hot cake. We are also planning to innovate on some more items going forward. But I cannot talk about it now.
Are you looking at global markets?
Currently, we are focusing on India. There are millions of babies born every day in India, and their parents plan what products to be bought for their kids even before they are born. This is where we are seeing huge opportunities. Additionally, India is a very complex world, with different states, taxes and varied tastes. Once we become even more sizeable, we will look at overseas markets.
Large e-com players like Amazon, Flipkart and Snapdeal are innovating on last-mile delivery to acquire more businesses. How are you positioned on that front?
In fact, we do next-day delivery in 10-12 cities free of cost while Amazon and Snapdeal charge a fee for the same. This service is available in certain cities like Mumbai, Pune, Delhi-NCR, Chennai, Hyderabad and Bangalore. We will pan to expand next-day delivery to 12 cities.
Are you looking at more funding?
Right now, we have enough cash in reserve and are not looking at raising capital anytime soon. However, since it is a capital-intensive business, we will require money to take larger steps. If we come across someone who shares our vision with their financial might, I would rather keep my doors open. But fundamentally we are not in the market to raise money.
How do you read the current trends in the e-com market for baby and kids products?
After a year or so, more than 50 per cent of the total transaction will happen on mobile. Also, behavioural changes are happening in this space. Parents have now become tech savvy and they conduct extensive research online before buying baby products.
The most significant point to be noted is that contrary to the popular notion, Indian consumers are becoming less price-sensitive, especially in the baby and kids products space. Parents want best quality products for their kids. Although there are people across both the spectrum, it's not lopsided toward cheaper products.
(Edited by Joby Puthuparampil Johnson)