Many of the niche players in this space have either shut shops, got acquired or are struggling to survive. Once Mom & Me and BabyOye used to be the strongest and largest niche competitors of FirstCry, but both merged and later on, this combined entity got acquired by FirstCry. Today, FirstCry is India’s largest omnichannel (web, mobile, and offline) retailer focused on the needs of babies, kids, and mothers. I was curious to know how FirstCry became a market leader in such a competitive market.
Debayan: Tell me a little about how FirstCry got started?
Harsh: In the year 2001, Supam Maheshwari, an alumnus of IIM Ahmedabad, was blessed with a baby girl. During this period, he used to run Brainvisa Technologies, an eLearning company, and his work required him to travel a lot to the U.S. and Europe.
He used to bring back a lot of products for his daughter because many of them were not available locally. As he began researching further, he figured that the baby and kids' products industry in India is a multibillion-dollar industry, but it is highly unorganized and extremely fragmented. Even though many customers had the spending capacity, they didn't have easy access to world-class brands and good quality products.
After exiting his previous venture in 2009, Supam decided to create a platform that could give parents easy access to quality baby and kids products. In 2010, he co-founded FirstCry along with his friend Amitava Saha.
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Debayan: Can you tell me about one of the marketing strategies that contributed to the growth of FirstCry?
Harsh: I have covered many interesting strategies in my book. Let me share with you about one of them – the FirstCry Box program. To set the context of this program, I would like to talk about Google’s two-sided network business model. In this model, one side is users, who get free access to search and another side is advertisers, who pay to Google to reach out to their targeted users. Similarly, FirstCry box program also has 2 sides – parents and baby products’ brands.
FirstCry has partnered with baby products’ brands that want to reach parents at the earliest stage of their customer lifecycle. Brands give their gift products and share a program cost with FirstCry. To reach out to young parents, FirstCry has partnered with maternity hospitals. FirstCry packs products from various partner brands into gift boxes along with its high-value gift coupon. These gift boxes are delivered to hospitals on the basis of the number of monthly baby births at these hospitals. Nurses gift these boxes to mothers within 2 days of the baby's birth.
When parents get these gift boxes with the samples of necessary items required during early days of birth, they feel good, get connected with the brands present in the box, and willingly fill feedback forms with their information such as their contact details and baby's birth date. Through this data, FirstCry tracks and analyzes the buying patterns of these parents on its website. FirstCry also remains in touch with these parents by sending weekly mailers covering relevant stories and up-to-date information on products they are likely to need in the immediate future. Moreover, these boxes create recall value in the long run also as mothers use these boxes to keep various baby items.
This 100% targeted program has a lower customer acquisition cost and a higher conversion rate as compared to other marketing models. At a very basic level, the program has a customer acquisition cost that is almost one-tenth of an average TV campaign. In terms of conversion, around 25 to 30% of the parents who've been gifted the box have become FirstCry's regular customers. In terms of benefits for partner brands, a few of the brands have seen a fourfold increase in customers from amongst the parents compared to when they were not gifting. Many of the brands have been able to increase retail penetration of their newly launched products due to the demand generated in areas around the hospitals where the gifting happens. Because of impressive results, FirstCry Box has become a preferred sampling channel for many established and emerging baby brands in India.
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Debayan: Can you please share a few traits that have helped FirstCry to become a winner?
Harsh: In my view, the leadership team’s focus on speed in all areas of business such as ideation, decision making, experimentation, execution, and creating new competitive advantages has helped the company to scale up fast. Also, the team’s focus on low cash burn without compromising on quality has helped the company in removing unwanted expenses. To emphasize on my point, I would like to share about the evolution of FirstCry's logistics business.
In e-commerce businesses, the big part of customer loyalty is dependent on order fulfilment. Initially, the company partnered with third-party logistics companies to manage its customers' expectations of on-time and safe delivery of products. But with time, the team realized that this model of outsourcing deliveries to third party logistics service providers was expensive and even uncontrollable. FirstCry was not able to commit delivery timelines to its customers, and it had no control over last mile customer experience. To overcome the above-mentioned challenges, in the year 2012, FirstCry started an in-house logistics division. In parallel with external courier companies, this internal division started handling deliveries of both online and franchisee business.
Soon, this division grew from handling deliveries to a few cities to whole regions to multiple regions all over the country. With time, this division started delivering orders of a few other eCommerce companies. Over time, this division grew up to become a separate business entity called - Xpressbees. Xpressbees is considered as one of the leaders in e-commerce logistics space. As per media reports, around the start of 2018, Alibaba, one of the biggest and most valuable companies in the world, invested in Xpressbees.
Debayan: Can you share one piece of advice that Supam Maheshwari shared with you for Booming Brands’ readers?
Harsh: Supam has given multiple advice in the book. One of them is, test your concepts first as pilots, get convinced, and then scale up.
Harsh Pamnani with Supam Maheswari
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