How Mensa built a ₹8000 Crore Ecommerce Empire in 6 months | GrowthX Wireframe

Summary

Mena Brands, India's first e-commerce rollup company, has rapidly become a unicorn in just six months, making over 500 crores in revenue. Founded by Anan Narayanan, the company acquires promising DTC brands and scales them using a unique rollup model. Mena focuses on Indian brands, leveraging the country's growing consumption and internet penetration. It also targets offline channels and global markets, aiming to create household names. With a strategic approach to branding and expansion, Mena is poised to disrupt India's e-commerce landscape.

Takeaways

• 🔥 Mena Brands became India's fastest unicorn in just six months, achieving a billion-dollar valuation and profitability within its first half-year.
• 🌟 Mena Brands is India's first e-commerce rollup company, acquiring and scaling DTC brands in categories like apparel, home, personal care, beauty, and content.
• 🚀 The company's founder, Anan Narayanan, has a strong background in e-commerce, with previous roles at Medlife and Myntra, providing him with valuable industry insights.
• 🛍️ Mena Brands follows a 'rollup' business model, similar to US-based THG, acquiring promising e-commerce brands and taking them from one to ten on their growth journey.
• 📈 Mena Brands aims to acquire 40 to 50 brands, with a goal of scaling 20% of them to over 1,000 crores in revenue, leveraging their expertise in product, marketing, and supply chain.
• 🌐 The company sees potential in the growing Indian consumption market and the increasing internet penetration, which are key drivers for the success of online-first brands.
• 👕 Mena Brands targets larger product categories like Fashion, Beauty, FMCG, and home, focusing on creating brands that can become household names in India.
• 🌍 Mena Brands has a unique global strategy, with 30% of its revenue coming from international markets, capitalizing on India's strength as a manufacturing hub for apparel.
• 📚 The company's approach includes an offline and content play, understanding the importance of physical presence and content platforms for brand discovery and trust-building in the Indian market.
• 💡 Mena Brands' success is built on a combination of strategic acquisitions, a deep understanding of the Indian market, and a global outlook, positioning it as a disruptor in India's e-commerce space.

Q & A

How long did it take for Zomato and Zerodha to become unicorns?

It took Zomato and Zerodha 10 years to become unicorns.

What is the significance of Mena Brands becoming a unicorn in just six months?

Mena Brands is India's fastest ever company to reach a billion-dollar valuation in just six months, highlighting its rapid growth and scalability.

What is unique about Mena Brands' business model?

Mena Brands is India's first e-commerce rollup company, acquiring promising DTC brands and scaling them, rather than building each brand from scratch.

Who started Mena Brands and what is his background?

Mena Brands was started by Anan Narayanan, who has a background as a former McKinsey consultant, ex-co-founder and CEO of Medlife, and ex-CEO of Myntra.

What is the rollup model in e-commerce?

The rollup model involves acquiring and consolidating multiple brands under one company to leverage economies of scale and expertise across the portfolio.

How does Mena Brands differ from the rollup model popularized by THG (The Hut Group)?

While THG focused on acquiring hot-selling products, Mena Brands focuses on acquiring brands, particularly in larger categories like Fashion, Beauty, FMCG, and Home.

What are the two main reasons behind the growth of Indian brands according to the script?

The two main reasons are the growing Indian consumption and higher internet penetration, which have created a favorable environment for brand growth.

Why is the offline channel important for Mena Brands?

The offline channel is important because it helps build trust and allows customers to experience products, which is crucial for value-conscious markets like India.

How does Mena Brands leverage content companies in its strategy?

Mena Brands acquires content companies with large audiences to facilitate product discovery and promotion, leveraging lifestyle-focused platforms for effective marketing.

What is Mena Brands' approach to international markets?

Mena Brands has a global outlook, with 30% of its revenue coming from international markets. It leverages India's manufacturing strength to sell products at higher rates in foreign currencies.

How does Mena Brands benefit from economies of scale?

Mena Brands benefits from economies of scale by having multiple brands share resources, such as suppliers and talent, which allows for better price negotiation and optimization of scaling strategies.

Outlines

00:00

🚀 Mena Brands: India's Fastest Unicorn

Mena Brands, India's first e-commerce rollup company, became a unicorn in just six months, making over 500 crores in revenue in FY23. Founded by Anan Narayanan, an ex-McKinsey consultant and ex-CEO of Medlife and Myntra, Mena focuses on acquiring promising DTC brands and scaling them up. The company has adopted a unique business model inspired by US-based THG, but with a distinct approach tailored to India's e-commerce market. Mena has successfully scaled over 20 DTC brands, including Myntra, Willen, Dennis, and many more, aiming to acquire 40 to 50 brands and scale 20% of them to over 1,000 crores in revenue.

05:00

🌟 Insights Behind Mena's Success

Mena Brands' success is driven by several key insights. The first is the potential for creating Indian brands, fueled by growing consumption and higher internet penetration. India's private consumption makes up 60% of its GDP, and with the internet penetration rising from 41% to 55% in just four years, the e-commerce market has accelerated, allowing online-first brands to emerge. Mena targets larger categories like Fashion, Beauty, FMCG, and Home, focusing on both online and offline channels. They also leverage content platforms to enhance product discovery and conversion. The company's strategy includes going global, with 30% of revenue coming from international markets, capitalizing on India's strength as a manufacturing hub to sell products at higher rates in foreign currencies.

10:02

🌐 Mena's Global Expansion and Market Strategy

Mena Brands is not just focused on the Indian market but has a global outlook. They list their products on e-commerce platforms in countries like the US, UAE, and Canada, leveraging the positive reviews and ratings from Indian platforms to boost their international presence. This global expansion is a strategic move, considering India's position as a significant apparel manufacturer. Mena's scale allows them to negotiate better prices with suppliers and reduce the cost of goods, which is a significant advantage. Additionally, their expertise in performance marketing across multiple brands enables them to optimize strategies effectively. Mena's unique approach to building a house of brands with a focus on both domestic and international markets positions them to disrupt India's e-commerce space.

Keywords

💡Unicorn

A 'unicorn' in the business world refers to a privately held startup company valued at over $1 billion. In the video, the term is used to describe the rapid growth of companies like Zomato, Zerodha, and Mamaearth, highlighting their success in achieving high valuations in a short period. Mena Brands, the focus of the video, is noted for becoming a unicorn in just six months, showcasing the exceptional growth in the Indian startup ecosystem.

💡DTC Brands

DTC stands for 'Direct-to-Consumer,' which means brands that sell directly to consumers without a middleman. The video discusses how Mena Brands scales more than 20 DTC brands, emphasizing its role in the direct retail market. Examples of DTC brands under Mena include Myntra, Willen, Dennis, and many more, illustrating the company's broad reach in the consumer market.

💡E-commerce Rollup

An 'e-commerce rollup' is a business strategy where a company acquires multiple smaller e-commerce businesses to consolidate them into a larger entity. Mena Brands is described as India's first e-commerce rollup company, which acquires promising brands and scales them up, as opposed to building each brand from scratch. This model is central to the video's discussion on Mena's unique approach to scaling brands quickly.

💡THIO

THIO is a US company that pioneered the rollup model in e-commerce by acquiring third-party sellers on Amazon and scaling them. The video uses THIO as a reference point to explain Mena Brands' strategy, highlighting the similarities and differences in their approaches to acquiring and scaling e-commerce brands. THIO's success and subsequent challenges provide a backdrop for understanding Mena's strategies.

💡Indian Consumption

The term 'Indian Consumption' refers to the spending habits and consumption patterns of Indian consumers. The video discusses how the growing Indian consumption market, driven by a large population and increasing internet penetration, presents a significant opportunity for brands like those under Mena. The potential for creating Indian brands that can scale and become household names is a key theme in the video.

💡Internet Penetration

Internet penetration refers to the percentage of a population that has access to the internet. The video highlights the increase in internet penetration in India as a key factor enabling the growth of e-commerce and DTC brands. With more people coming online, especially in rural areas, there is a larger audience for online brands to target, which Mena Brands is leveraging through its portfolio companies.

💡Organized vs Unorganized Market

In the context of the video, 'organized' refers to sectors where businesses operate in a structured, branded manner, while 'unorganized' sectors lack formal branding and regulation. The video points out that large categories in India like food, apparel, and personal care are still largely unorganized, presenting an opportunity for Mena Brands to create and scale brands that can capture market share as these sectors become more organized.

💡Offline Channel

The 'offline channel' refers to traditional brick-and-mortar retail spaces where products are sold face-to-face. Mena Brands is noted for its strategy of not only focusing on online sales but also leveraging offline channels to build trust and brand recognition. The video explains how the offline presence can complement online sales, especially in a value-conscious market like India.

💡Content Companies

Content companies in the video refer to platforms that create and distribute digital content, often with a focus on lifestyle and entertainment. Mena Brands' acquisition of content companies like MenXP and IDAT is highlighted as a strategic move to leverage their audience for marketing and product discovery. This approach aligns with the trend of online discovery leading to offline conversion.

💡Going Global

The term 'Going Global' in the video refers to Mena Brands' strategy of expanding its brands beyond the Indian market to international markets. With 30% of its revenue coming from global markets, Mena is leveraging India's strength as a manufacturing hub to sell products at higher rates in foreign currencies. This strategy is unique compared to other e-commerce rollup models and underscores Mena's ambition to become a global house of brands.

Highlights

Mena Brands became a unicorn in just six months, making over 500 crores in revenue and reaching a billion-dollar valuation faster than any other Indian company.

Mena Brands is profitable from the first six months of its journey, showcasing exceptional financial management.

Mena Brands scales over 20 Direct-to-Consumer (DTC) brands, including MyFitness, Willen, Dennis, Lingo, and more.

As India's first e-commerce rollup company, Mena Brands has a unique approach to the e-commerce market.

Founded by Anan Narayanan, Mena Brands leverages Narayanan's extensive experience in the Indian e-commerce sector.

Mena Brands follows a 'rollup' business model, acquiring promising brands and scaling them up, rather than building from scratch.

The company acquires a majority stake in e-commerce companies with revenues between 25 to 35 crores, aiming for long-term collaboration.

Mena Brands' strategy includes acquiring and scaling brands in various categories such as apparel, home, personal care, beauty, and content.

The company has a goal to acquire 40 to 50 brands and scale 20% of them to over 1,000 crores in revenue.

Mena Brands capitalizes on the growing Indian consumption market, which is set to become the third-largest consumer market by 2026.

India's internet penetration has risen significantly, enabling the e-commerce market and online-first brands to flourish.

Mena Brands focuses on creating brands with high potential for brand value and household recognition.

The company's strategy includes an offline channel, understanding the importance of physical presence in a value-conscious market like India.

Mena Brands also focuses on content companies, leveraging platforms with large audiences for better product marketing and discovery.

The company has a global outlook, with 30% of its revenue coming from international markets, showcasing its 'Going Global' strategy.

Mena Brands benefits from economies of scale, allowing for better supplier negotiations and cost reduction in the long run.

The company's unique strategies and insights position it as a strong house of brands with the potential to disrupt India's e-commerce space.

Transcripts

10 years the time that zomato and zeroa

took to become a unicorn 6 years the

time that Mama or took to become a

unicorn 6 months that's all it took Mena

Brands to become a unicorn a company

that made more than 500 crores in

Revenue in fi23 and is India's fastest

ever company to reach a billion dollar

valuation in just six freaking months

and they were even profitable in the

first 6 months of their Journey but you

might not even have heard of them a

company that is scaling more than 20 DTC

brands at once which includes Brands

like my fitness Willen Dennis lingo and

many more it's India's first e-commerce

rollup company and have cracked

something super unique in India's

e-commerce Market that you must know of

so what is the secret Source here and

what has Mena Brands cracked we'll get

into that but if you're new to the

channel and wondering what growthx is we

are an invite only community of over

3,000 Founders and product and marketing

leaders from Top product companies you

can check more about us from the link in

the description coming back to the first

inside that they cracked which is the

thasu Insight see Mena was started by

Anan Narayanan who has literally

witnessed the Eco wave firsthand in

India he's an ex- meening consultant ex

co-founder and CEO of medlife and ex CEO

of mintra so the question is what does

the company do see Mena is a company

which is a house of Brands but they

don't build each brand from 0 to one

instead they're acquiring promising

Brands and take them from one to 10

Journey the company has followed a thio

business model but what is that see thio

is a US company started by these two

guys in 2018 who noticed a stockling

trend on Amazon the rise of third party

sellers look Amazon has primary two type

of sellers one is the first party

sellers or vendors and second is the

third party sellers in the case of first

party relationship Amazon acts is a

wholesaler for you and it's an invite

only program and Amazon only invites few

big Sellers as they are sure of the

frequency and reputation of these

sellers for these sellers Amazon takes

care of everything beat shipping

products details listing figuring out

the pricing and even returns so the role

of the vendor in this relationship is

just to fulfill the purchase order sent

by Amazon and ship the product to Amazon

the next one which is the third party

relationships are what most of the small

businesses get when they enroll as an

Amazon Seller here Amazon becomes only

the marketplace for you in this you sell

your product directly to customers on

Amazon being the marketplace but the

catch here is that you have to take care

of everything starting from pricing

product listing optimization advertising

and even Logistics and returns but now

Amazon has made the logistic part easier

through their service of fulfillment by

Amazon which takes care of the

deliveries tasio which is the US company

that we talking about notice the rise in

third party sellers on Amazon this

number went from 26% 2007 to 61% 2024

the space for third party sellers was

getting really competitive and many good

brands would reach a threshold of $3 to5

million in revenue and would get stuck

there and wouldn't scale post that and

to expand they would either take debt or

raise funds so thaso would come in here

and acquire these Brands to give

Founders a good lucrative exit and then

they would fix everything for the brand

be product portfolio packaging online

strategy Performance Marketing and even

supply chain with the strategies they

increased sales by 30% within 2 months

from many of these Brands and got over

200 Brands under the folio in fact they

even reached a p valuation of $10

billion and raise funds from Big

investors like these but today things

are not going super great for them

because of their bankruptcy situation

but that's for some other day what's

really important here is that this model

of acquiring and bringing multiple

brands or acquiring companies under one

company is known as the rollup model and

thasu made it popular in the e-commerce

space this became the Genesis for Mena

Brands by the way Mena is still very

different from thio and we'll cover this

in detail in the video but what's

similar though is that Mena also

acquires a majority stake of minimum 51%

in fast growing e-commerce companies in

various categories like apparel home

Personal Care Beauty and even content

these companies would idly have a

revenue of 25 to 35 crores and founder

would work with Mena for 5 years at

least so all these 20 plus companies

that you see here are nothing but the

acquired companies of Mena by the way

this model has obviously been replicated

by other players in the country as well

like Global bees UPS scalo code brand

labels and even flow you can check the

investors backing each of them in this

graph by pausing the video but Mena's

goal is to acquire 40 to 50 Brands over

time and scale 20% of them to a revenue

of more than 1,000 crores and just see

what Anand feels about this we have 20

brands that we bought I would say seven

of those brands are now 80% of our

revenue and they are the breakout breads

right there is another seven that I

think have the potential to be a

breakout and then there are others that

we will consolidate into these 14 now

let's talk about the second Insight the

Indian brand Insight but before we get

into that I'm super excited to tell you

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to the Insight see what made Anan super

bullish was the possibility of creating

Indian Brands and this one because of

two reasons one was the the growing

Indian consumption and the second was

the higher internet penetration and

we'll discuss both if you look at the

consumption side we are the fifth

biggest consumer Market in the world and

we are supposed to get to the third spot

by 2026 in fact India's private

consumption is so big that it makes

massive 60% of our entire GDP which is

almost twice of what it does for a

similar big country like China so we are

a country where private consumption

basically drives our economy but what is

private consumption it is basically the

expenses consumer make for basic stuff

like food housing clothing health and

even Leisure communication and education

and this data is as for the Blue menes

Valley report it's a great report by the

way and if you want to access this we

have shared the link in the description

by the way interestingly if you go deep

you would see that 10% of India

contributes to 50% of consumption as

India has three different economies

within itself which is Poland Singapore

and Mexico where each is significantly

different from each other and this is

from the theory of Kishore bani who is

an Indian retail Legend and the guy

behind big Bazar but yeah let's keep

that for some other day when we'll only

talk about India's economy in detail so

what's important to understand is that

while one major Tailwind for the

business was growing consumption the

next one was India's internet boom see

our internet penetration has risen from

41% to 55% in just last 4 years in fact

we have now more internet users in rural

India than we have in urban India a

situation which took some time to happen

and this has just accelerated the

e-commerce market and made it possible

for online first Brands to exist and

there are many big examples like Mama

Earth boat lens card and many more but

what un unnoticed here is that this is

just the tip of the ice work because

some of the biggest categories like

clothing Personal Care food are highly

unbranded if you look at Food 50% of the

market is unorganized if you look at

apparel 65% of the market is unorganized

but as these sectors get more and more

organized and as people spend more on

these sectors with increasing per capita

incomes India would see more people

spending more on the basis of brand

value and this pattern is something that

all of us have observed around us we are

happy to pay a premium if we like a

brand and these brands are what Mena is

aiming to go for the company wants to

create a few brands that became

household names in 10 years because they

know that this is not a single winner

takes all Market but a market where many

winners can coexist now the third

Insight offline and content play look

the thasu model and Mena model might

look similar from hindsight but they're

different how is that see even the

category of products both brand Target

are very different thio was more focused

on acquiring hot selling products than

acquiring brands for example one of the

companies that they acquired is a

company called this works this company

only makes one product which is vacuum

cleaners and there's another one called

chalk tastic again this company makes

paints and sketch pens that's all Mena

on the other hand is going for Brands

rather than going for hard selling

products Brands which can be thousand CR

brands in India they're focusing on

bigger categories like Fashion Beauty

fmcg home and even content they're also

different from thasu and the sense that

they're going also for the offline

Channel because as for them every brand

requires different levers to be pulled

as per different stages for example from

0 to 20 crores the company should focus

obsessively on product and get good

reviews and good repeat rates from 20 to

100 crores the company should get

effective with Performance Marketing and

expand its skus from 100 to 500 crores

the company should start opening offline

stores and build effective campaigns and

do effective community building and

offline makes a lot of sense in India

because we are a very value conscious

market and to build the trust we need to

see the product in our hands the more we

see a product offline the more we think

of trying it out and it is even more

important in categories like food and

touch and field categories like clothing

that's why they even got on board nanjan

tandul varer who had great experience of

taking care of the offline operations at

adya builda Fashion the giant that owns

some of the biggest lify brands in India

including saari van Hussein and Forever

21 another Super unique thing they have

done is going for Content companies like

men XP and Ida at the time of the

acquisition both of these companies had

roughly 35 million monthly active users

a big audience right away for them to

Market and promote their products better

this again is a very smart move because

these platforms are very lifestyle

focused platforms and the process of

discovery which is basically when you

see the product for the first time can

happen really well on these platforms

because we know that products now are

discovered online first and then the

conversion happens later in offline so

the easier the discovery becomes easier

the conversion becomes this brings me to

their fourth unique strategy which is

the Going Global Insight this again is

very different to what thio did sheim

Mena is not looking at the population of

just 1.3 billion people they're also

looking past that in fact right now they

have 30% of the revenue coming from

Global markets including us UAE and

Canada this again is a very unique

approach that they have taken in fact

50% of all their brand portfolio is

available outside now you must be

thinking how do they do that see they

list their products in the e-commerce

platforms of these companies too for

example in the case of UAE they listed

their products like willin Pebble and

for culture on Amazon of UAE and other

e-commerce platform which is nonon which

is pretty famous in UAE by the way

Amazon becomes a lot easier for them

because the the ratings and great

reviews that their products get here

also get translated and reflected in

other countries and the Going Global

Insight is a master stroke because India

is one of the biggest apparel

manufacturers in the world so making

something here and selling it at outside

at higher rates in the foreign

currencies is just a great idea by the

way this is not something that any brand

can do and Mena has an advantage of

scale here just imagine many Brands out

of them could have the same suppliers

like they might be getting the cotton

from suppliers from multiple brands at

once this just gives them the power to

negotiate better prices with their

suppliers and reduce the cost of goods

in the long run plus their optimization

for scaling becomes easy because they

now have the advantage of economies of

skill by the way this benefit of skill

also applies to talent because they have

a team of experts working on specific

function for 20 brands at once for

example a performance marketing team

that is obsessively working on

Performance Marketing of 20 Brands can

figure out what strategies works and

what does not and iterate accordingly

every little thing that we have

discussed so far combined makes Mena a

strong House of brands that can disrupt

India's e-commerce space so these were

the main insights that made Mena a very

unique startup story if you like this

video do check out the video we did on

whole truth I'll see you in the next one

ciao