We Currently Have 1,063 Stores, Will Add 350 More Stores Over Next Few Years: FirstCry | CNBC TV18
Summary
TLDRIn this interview, Su Maheshwari, MD, and CEO of BrainBees Solutions, the parent company of FirstCry, discusses the company's IPO and growth outlook. With the organized baby care market growing at 20% annually, Maheshwari highlights FirstCry's multi-channel business model, strong online and offline presence, and unique community-driven app features that differentiate it from competitors. The company aims to expand its offline stores and improve profitability, capitalizing on India's digital-savvy millennial mothers.
Takeaways
- 📈 First Cry is going public with an IPO that opens for subscription today, aiming to raise up to 2,500 crores through the offer for sale of up to 54.3 million equity shares.
- 💼 Super Maheshwari, the MD and CEO of BrainBees Solutions, the parent company of First Cry, discusses the company's IPO and growth outlook in the interview.
- 👶 The overall market for childcare in India is approximately $34 billion and is expected to grow to $66 billion by 2029, with only 16% of it being organized currently.
- 📊 The organized segment of the market is growing at a rate of 20%, faster than the overall industry growth rate of 13-14%.
- 🛒 First Cry operates a multi-channel business model, with 75% of its GMV coming from online sales and 25% from its 1,063 stores across 533 cities in India.
- 🌐 First Cry has a strong online presence, but also values the offline market, planning to add 350 more stores in the next two years with the proceeds from the IPO.
- 👩👧👦 The company focuses on young mothers and fathers, building competencies over 13-14 years to cater specifically to their needs.
- 🤰 First Cry has a large parenting community within its app, providing support and resources for mothers throughout pregnancy and post-pregnancy.
- 🔍 The app offers personalized experiences, with different homepages for mothers of children of varying ages, ensuring a tailored shopping experience.
- 📊 First Cry's core business has shown an increase in adjusted EBITDA margins, rising from 5.9% in FY22 to 8.8% in FY24, indicating a path towards profitability.
- 🚀 The company aims for steady expansion and profitability, with a roadmap that includes improving margins and growing both online and offline segments.
Q & A
What is the size of the overall industry mentioned in the script?
-The overall industry size is close to $34 billion as of today and is expected to become $66 billion by FY 2029.
What percentage of the industry is currently organized?
-Currently, 16% of the market is organized, while 84% is unorganized.
What is the expected growth rate of the organized industry?
-The organized industry is growing at a rate of 20% CAGR.
What is the total addressable market (TAM) for Brainbees Solutions by FY 2029?
-The total addressable market for Brainbees Solutions is around $120 billion by FY 2029.
How does FirstCry differentiate itself from other apps and platforms?
-FirstCry differentiates itself by being a specialist in child care, offering a multi-channel business model, running the largest parenting channel on YouTube, and providing a parenting community within its app with various tools and personalized experiences.
What is the mix of GMV for FirstCry between online and offline segments?
-75% of FirstCry's GMV comes from online channels, while 25% comes from offline stores.
How many stores does FirstCry currently have, and how many more are planned?
-FirstCry currently has 1,063 stores and plans to add 350 more stores in the next two years.
What are the advantages of FirstCry's multi-channel retail model?
-The multi-channel retail model allows mothers to shop both online and offline, providing convenience, variety, and a trusted retail platform with significant presence in both areas.
What are some unique features of FirstCry's app for parents?
-FirstCry's app includes features like a parenting community, evolution tracker, growth tracker, vaccination tracker, baby names, and parenting GPT, all integrated within the shopping app.
What is the current EBITDA margin for FirstCry, and what is the expected trend?
-The current EBITDA margin is about 4%, with the core business segment already at 8.8%. The company expects steady expansion in EBITDA margins as the business grows.
Outlines
🛒 First Cry's IPO and Market Overview
The video script discusses the upcoming IPO of First Cry, an e-commerce platform focused on childcare products, with an offer for sale of up to 54.3 million Equity shares. Super Maheshwari, the MD and CEO of BrainBees Solutions, the parent company of First Cry, is interviewed to provide insights into the IPO offering and the growth outlook. The conversation highlights the size of the overall market, which is approximately $34 billion and expected to grow to $66 billion by 2029. Currently, only 16% of the market is organized, with the organized segment growing at a rate of 20% annually. First Cry operates in four segments with a total addressable market of around $120 billion by 2029. The discussion emphasizes the importance of the organized sector and the potential for growth in the childcare market in India.
📈 First Cry's Business Model and Expansion Strategy
This paragraph delves into First Cry's business model, emphasizing its multi-channel approach, which includes both online and offline sales. The company has a significant presence in both sectors, with 75% of its GMV coming from online sales and the remaining 25% from its 1,063 stores across 533 cities in India. The strategy involves expanding the offline segment by adding 350 more stores in the next two years, leveraging the preference of Indian consumers for both online and offline shopping. The discussion also touches on the company's margins, which are currently at 4%, and the roadmap for steady expansion and profitability. The company's core business has demonstrated an increase in adjusted EBITDA, reaching 8.8% in the most recent financial year, indicating a positive trajectory for future growth and profitability.
Mindmap
Keywords
💡IPO
💡Equity Shares
💡MD and CEO
💡Organized vs. Unorganized Market
💡GMV
💡Multi-Channel Business Model
💡Parenting Channel on YouTube
💡Curation and Personalization
💡Growth Outlook
💡Profitability
💡Digital Savvy
Highlights
First Cry's IPO opens for subscription with an offer for sale of up to 54.3 million Equity shares.
The company's focus on the primary market and its growth outlook is discussed with the MD and CEO of BrainBees Solutions.
The overall industry is large, estimated at around $34 billion with a projection to become a $66 billion market by 2029.
Only 16% of the market is organized, with the rest being unorganized, presenting a significant opportunity for growth.
The organized sector of the industry is growing at a rate of 20%, faster than the overall industry growth of 13-14%.
First Cry operates in four segments with a total addressable market of around $120 billion by 2029.
The company differentiates itself as a specialist and vertical retail player focusing on young mothers and fathers.
First Cry has a multi-channel business model with both online and offline presence across 533 cities in India.
The company runs the largest parenting channel on YouTube and has a strong community within its app.
First Cry provides a range of services within its app, including pregnancy and post-pregnancy support, and a parenting community.
The company's app offers personalization and curation, providing different homepages for mothers of different aged children.
First Cry's GMV mix is predominantly online, but the company is also expanding its offline segment by adding more stores.
The strategy includes increasing the number of stores to 1063, with plans for 350 more in the next two years.
The company's online business is expected to continue growing due to variety, convenience, and digital savviness of millennial mothers.
First Cry's core business has demonstrated an increase in adjusted EBITDA margins, reaching 8.8% in the current financial year.
The company aims to achieve double-digit EBITDA margins and become profitable at a net level as its business segments mature.
Viewers are encouraged to watch a detailed interview with the management for more insights on the company's IPO and business strategy.
Transcripts
let's focus on some primary Market
action now well um first cries 4,200 CR
IPO opens today for subscription the
issue comprises of an offer for sale of
up to 54.3 million Equity shares or
2,500 crores to discuss this in detail
on the IPO offering and the growth
Outlook we have super maheswari the MD
and CEO of brain be solution uh you know
that is a parent company of first cry
that joins in here in the studio Su
thanks a lot for joining in and you know
at the onset I must say that being a
mother I think first cry was an app that
I have used endlessly there was a point
in time when I was only using you know
first cry for my baby but um uh
congratulations on you know your um sort
of move towards Dalal Street and the
impending listing but just wanted to
start by asking you about the industry
itself right What proportion of the
industry is unorganized currently how
much do you expect the shift will be to
organ to the organized sector sure first
of all thanks uh for having me here and
uh good to see that you were our
customer as well uh uh so and and you
trusted us um so to answer your question
Sonia I think look uh the overall
industry is very very big which is
around close to $34 billion as of today
it's going to become 66 billion dollar
by close to fi 29 and within that only
16% of the market today is organized
that's 84% of the market is unorganized
the overall industry is growing at a 13
14% ker where the organized industry
which is 16% is growing at 20% K so this
is like a very very sort of a massive
time as far as I'm talking about India
child care for brain bees overall I
think we are uh our overall Tam total
addressable Market will be around $120
billion so that's even bigger because we
operate in four segments uh if you put
together all of the total address Market
is around $120 billion by f529 so you
know just I mean as a consumer right
I've realized that of course there are
apps and platforms like first cry which
is concentrated on child care and then
there are a whole other set of apps as
well where you get everything including
child care so how do you um
differentiate how do you combat this
kind of competition so look no it's a
great question um so fundamentally um
you have to look at uh we are a
specialist uh and a vertical uh retail
player which we have is we have built a
over last 13 to 14 years certain set of
Competency uh to only focus on young
mothers and fathers uh as our DNA and uh
all the solutions that we have built so
let's say for example I'll enumerate few
of them the first of all is that we are
a true multi-channel uh business model
which essentially means Although our
large part of our gmv 75% of it comes
from our online in India multi Channel
retail and 24 25% comes from our
1,63 uh uh uh you know uh shops that we
have across 533 cities in the country so
in this particular category mothers
prefer to buy both online and offline
and that gives us a very unique power
that we have a one trusted retail
platform which has both significant
online and significant offline presence
across uh 1,63 that's number one number
two we have a very we' run the largest
parenting Channel on YouTube and we have
a parenting community uh you know uh
within our app and this app allows a
mother when she conceives a baby uh she
goes through pregnancy post pregnancy
all the time till the time that kids
become a certain age she's very anxious
she's very inquisitive during that phase
of that physiological chain that goes on
with her she wants validation of oral
queries and answers and we have provided
all of that through help of gynecologist
pediatricians uh other fellow Ms who
have been through the Journey who are
answering those questions like a Kora
platform on this is all happening within
our app and provide things like you know
you uh Evolution tracker to grow tracker
vaccination tracker baby names parenting
GPT all kind of stuff is embedded within
the community and this community resides
had all this back here it was not five
six years seven years ago that's correct
all of it is now live kicking running
into the app and this is Within part of
the shopping app so some of these things
are not going to be provided by anybody
because we are true to that moment uh in
the parenting Journeys so this is like
the second and and we have built a whole
lot of curation
personalization like on our app you will
see a mother of a four-month-old or a
4-year-old or 8-year old will see a very
different homepage okay that is very
unique very different than what you will
see in a different typical you know app
or any other Marketplace all right
talking about uh parents of four and
five well I have a three-year-old and a
5-year-old so I think you know that I
would be a customer I've seen the bills
around the house but let's focus a
little bit on business because you know
a lot of viewers would want to
understand I'm looking at your gmv you
know if I look at the mix most of it is
offline right is online right now yes
but you're looking at you know even
upping the offline segment because
you're adding stores tell us what is the
strategy out there my understanding
would be when you set up stores it
requires a lot of more working capital
and things would be very very different
so what is the strategy with regard to
this mix of gmbb online versus offline
sure so look um when we started our you
know business back then in 2010 and uh
we we always had believed that we will
also solve all the solutions that we are
building we will solve for offline as
well because India you know back then in
2010 we believe 10 years 20 years later
it'll be still a offline market and we
are here after 14 years it's still an
offline Market e-commerce penetration
still in single digits correct uh having
said this uh we have built 1063 stores
uh and in in that if you look at it we
are putting 350 more stores uh on the
use of proceeds in the next 2 years yes
uh our online will continue to grow of a
very simple reason because of the
variety and because of the convenience
that it offers and the curation and
personalization that it offers okay and
more importantly the millennial mothers
that are out there are far more
digitally savy than what we had 3 years
back 5 years back 10 years back and that
will continue to compound because more
and India is one of the most digital
savviest country in the world and
therefore Millennial mothers will come
to us first online and they will also uh
you know you know transact offline in
the vicinity of their home that's what
will continue to happen and therefore
being the largest organized player in
the Market within you know a large time
and and and although we are still very
small as a company only 6,480 crores but
we will still continue to have a
Headroom without really not too much of
both offline and online will continue to
grow got you know we I think you did a
detailed interview with Rema uh earlier
and I'd encourage our viewers are
thinking of applying into the IPO to
sort of go watch that entire interview
but because for the POS of time I want
to get a few things uh out of the way
you're a bit of margins are at about 4%
only MH uh what what what is the road
map I mean are we looking at steady
expansion sure absolutely uh look uh how
it will actually happen if you look at
our past track record for we have four
business segments you're talking about
4.2% fi 24 adjusted ABA that's at a
console level in this there are two new
businesses which are less than three
year old uh and these are typically all
so four goes to what I'm sorry I'm
pressing you
but just take a minute uh if you look at
our India multi Channel alone uh we were
at 5.9% for f522 6.2 in fi23 and in uh
f524 we already become 8.8 so our Core
Business which is the largest piece of
our business has been in the making for
13 to 14 years is already delivered 8.8%
disted AA so this will continue to
expand as what we have demonstrated in
the past because all the things and all
the strengths and modes that we have
built you have to get a double digit
look others have done it we should be
able to do it there's no doubt and
question in our mind and when do you get
when do you take profitable when do you
become profitable at a net level uh it's
it's uh as we you know as all our four
business segments continue to deliver uh
better results over a period of time
because they're relatively new some of
them are relatively new uh all of this
will translate into uh a sort of a
pattern a pbd performance absolutely uh
thanks very much apologies sort of for
pressing you POS time thank you very
much and good luck uh with the IPO and
once again to all our viewers who
thinking of sort of wanting to know more
about the company I encourage you to go
online to the website the CNBC website
and watch that detail interview uh with
suum and the first crime management well
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