Transcribe
I'm good great. So welcome and open talk. And today we are going to be going to talk about the fires Adventures ultimately. How are you building the distal branch in India? And what is the concept behind digital brand? I would like to talk first about yeah, I mean basically if you look at Brand building 1.0 submit, it used to require entrepreneurs to first base. Build physical distribution in India and especially in India. There's not too much of organized retail. So, you know store by store Mom and Pop Shop distribution, which takes a lot of capital and makes a lot of time and once they did that physical distribution and made their products available in various Outlets, then they had to go into mass media to create awareness and brand equity for their brands and that typically is a very high capex and high Still be off making people aware because there's lots of wasted media and now with brand-building 2.0. What is really happening is over the last decade there has been a given billions of dollars that has been poured into building the digital infrastructure of India. So if on the distribution side, you have vertical e-commerce players like Nikon big basket for groceries first cry for for baby products. Then you have the key Pharmacy product key Pharmacy grow retail for nutraceuticals wellness products Etc. Like Farm easy that made some midlife Etc. Then you've got your social commerce channels that have really taken off me show shop 101 Walnut even Etc Bulbul Guru, then there's obviously the horizontal e-commerce, which is Flipkart Amazon Etc. And then This coupled with the media side, which is your Ott platforms like hot star. Let's say YouTube which have 300 plus 10 million plus users on them. You have the social media channels like Facebook and Twitter and Instagram share chat Tick-Tock, which have a couple of hundred million people logging in I think this infrastructure of of District you distribution and E Media or digital media actually makes it a very exciting time to build Brands because a you don't have to do that Mom and Pop store store by store building of the distribution. So you can access multiple millions of consumers at the click of a button and make your products available for them to buy either through vertical e-commerce social commerce or horizontal Commerce. And you can use digital media in a very sharp targeted micro segmented pay per click basis, which does not waste too much of media money. And therefore you're much more sharply accessing your customer and creating awareness for your brand. I think this makes it an exciting time to build brands in a very different way from where what brands were building brand 1.0 and what fire at Fireside we are doing is enabling this entire Coast to come together, obviously. SLI with the entrepreneur at the heart of it to enable Brands 2.0 to be created faster and with lesser cavity, right? Right. So what is it that you are seeing when a in terms of the magnitude of order of magnitude when you talk about the capital required and the time taken so with digital brand or the brand to doto thing coming in what have you seen that cost required and the time required to build a brand? I didn't come on the time. For example, if you look at brands in the Brand's 1.0 error, if you looked at, you know, how long did it take to get to go from inception to let's say the first hundred crores of Revenue. We were seeing timelines of anywhere between four to seven years got required. Multiple City distribution. You need to acquire to get through at least, you know a couple of Thirty forty fifty thousand Outlets to make your products available. So on and so forth today with the Brand's 2.0. We are seeing Brands getting built to from 70 to 200 crores in 18 to 24 months in terms of capital efficiency Brands 1.0 had a capital efficiency of anywhere between 1.5 to 2.5 x that means for every Rupee you put in at Max you'd expect two and a half rupee of top-line to come into the brand. So if you are a hundred proof brand you have to at least put in about 40 50 crores Capital, but with the branch 2.0 raising Capital efficiency is rising up to about three to three and a half weeks. So almost like a 2X movement in terms of the path and almost three xox Improvement in terms of time to kill absolutely and then when you kind of combine these two the cost of capital because time is also a factor has a multiplier effect rate. So it is almost 4 to 5 x kind of difference that we are seeing create any problem. It is also increase the possibilities of the brand side earlier. You would not probably assume more A brand to come in a very niche market, but because the cost has come down so significantly you can expect probably a Brands to come in a micro segment in a category, which probably was were underserved earlier. So there two or three new ones points here and you're absolutely right, but they're totally wants points here assume it. So I think one what is happening is that I think entrepreneurs see opportunities before investors to right and therefore we are seeing a Groundswell of entrepreneurs. It's kind of creating very interesting brands in a lot of categories that span the entire consumer wallet. So we've seen for example Brands getting created in the electronic space in the fashion space Beauty Personal Care their brands getting created for Home and Decor and Home Interiors is brands for for example fresh produce as well Licious for example in the meatspace there. Is getting produced in apparel accessories. There are a lot of brands that are coming into for example Sports Fitness Wellness nutrition. So there's a lot of aspects of the consumers wallet is being touched by Branch 2.0 and entrepreneurs are looking at this opportunity from various angles and we are seeing new brands getting created almost in every aspect of The consumers consumption basket the second thing that's happening in parallel is and it's a blessing in disguise for entrepreneurs is because of the India's because labor reform has not really happened in India a lot of the larger company than this is I'm talking I'm going to go back in time about 10-15 years a lot of the larger companies like the L'Oreal's unilever's the png's of the World created a lot. Of third-party manufacturing infrastructure because they did not want to have all of the manufacturing in house. Now. This has created a whole ecosystem of third-party manufacturers across categories again in India, for example, in apparel is always been an export-oriented Market this always manufacturing infrastructure and spare capacity available. So for new entrepreneurs to come in I think a the market access is there because like I said the whole digital ecosystem And then on the supply side, you have a third-party manufacturing infrastructure. So there is not too much of capex also involved in, you know, putting up your own manufacturing and supply chain Etc. All of that is also already present. So I think that makes it the combination of those two makes it really interesting and therefore like you said entrepreneurs are looking at each category and saying, okay. What is the consumer Trend in this category, which part of this category is currently under served by the current? Incumbent brand let me create a brand. So for example in the baby space while we have very large companies and large Brands like Johnson & Johnson Amalia Kiko Mimi Etc, but nobody was really looking at the baby space from toxin-free or natural standpoint. And that's when for example Mammoth looked at it from that standpoint said he while the a lot of baby products, but if I want a toxin-free certified, Natural ingredient products for my baby. There's nothing out there. So let me go ahead and create that and then he found the manufacturing infrastructure to help him manufacturer low back to small quantity batches and we found to go to market infrastructure in both the digital media and the digital go-to-market e-commerce to really turbochargers group. That's really beautiful. I think it's like what Amazon web service right probably had done to the internet and like people don't really have to set up their servers and stuff like that and it kind of gave the opportunity to all of people to actually understand the problem and solve the problem instead of kind of boiling the ocean and try to do everything on their own. So using the launching a brand in this to Road, oh era is kind of I would say a lot more about the brand and lot lesser about things which were probably not directly related to the brand earlier. That's the reason it probably is leading to a lot of entrepreneurs are probably exploring starting to launch their consumer brand which used to be probably a big daddy's business last decade. Absolutely. I think if it's almost the way we are looking at this is the infrastructure is already laid out. So for example, if somebody in the last decade the like the big daddy example, you took they had to create The old infrastructure from scratch both at the front and at the back end they had to create their own manufacturing their own warehousing their own Supply chains at the back end and the front end they had to create their own sales teams their own go to market channels their own, you know distribution channels Etc now at that was the Big Daddy play today, all of that is available on tap. So what the con what's the real problem that the entrepreneur has to solve for is? What is the consumer insight? So what is the consumer sub segment that they're going after and how are they going to build the product story which is a differentiated highly beneficial product and the Brand Story which is the whole emotional narrative around the brand to really capture the imagination of the consumer. So I think that's the core problem that the entrepreneur today is focusing on and all of these quote-unquote infrastructural problems have already got involved. Great, Minnesota on the finer the on down the closing note. I would like to ask you few domains or few areas, which you think are still banned staffed and you were looking for the grid brands or I'm sure that you're looking for Brands across the categories, but I'm sure some categories have gone ahead. You have probably invested in certain brands and stuff like that. What are the categories choose things are Brands travel where you're looking skin best actually actively. So I thank you, but I'll answer your question in particular has been submitted. I think you've hit the nail on the head saying, you know, we are looking for interesting brand stories interesting brand narrative across categories because I think every category is going to get disrupted but specifically for example, we remain very excited about for example the whole food 2.0. So if you look at in the last decade people have got much more. Has active they are more conscious about what they put in the body. So, you know and Indian diet is anyway protein deficient. So what can be done around the protein space what can be done on the superfood space what can be done around the alternate to Dairy alternatives to meet. I think there's a lot of disruption in the food that can happen and we continue to be really excited around that we continue to be really Around the whole Personal Care space as well. I think both and when I say personal care and going to include Beauty in it, which is cosmetics and because the beauty used to be like a female oriented stuff last decade but the lot of men grooming absolutely. I think the Genji consumer the Gen Z Millennial man or the middleman with the Genji boy. As they grow up and become consumer consumption audiences in the next three to five years I think are looking to put their best foot forward are very conscious of how they kind of groom themselves. So I think that that's right Trent that you've picked up but I think even beyond that I think Beauty was defined as you know, one idea of beauty as propounded by mass media in the last decade. I'm referring to Brands like fair and lovely, right Buddy, look at today media has got completely disintegrated there. Lots of consumers sitting on the mobile phones having very different habits and attitudes towards Beauty and Catering to those sub segments. So maybe using natural products may be using Beauty for I mean if somebody doesn't have fair skin doesn't mean she doesn't want to look beautiful. Right? And what are the beauty products specifically catered for that? I think there are lots of sub-segments a tree. Up to then Beauty based on this video disintegrate this intimidation. I think that is another interesting area that we continue to be excited about I think what is also interesting is that earlier? It used to be everything used to be one size fits all up Koger shampoo chair yet. You will have like a shampoo for dry hair oily hair and normal here that's about it. But what if I have a problem where you know, my hair is oily, but I have My hair is Curly but I also have dandruff. I don't want to apply to products so can can somebody customize that and give it to me now? There are lots of because using Tech using D to C. I can diagnose those issues for you when it's your skin with your hair with whatever it is and provide a customized solution to you. Let's say if I go into a store. I have a certain foot size that doesn't match the profile sizes of the shoes that Liberal in the store because there's a certain length to breath ratio there certain aspect ratio. So therefore if I have very broad Suite I end up wearing slightly longer shoes than require now can somebody customize that now in a normal retail it is not possible because there's so much of inventory lying around but it D to C. It is possible during this whole customization personalization is a big team across categories that we are also very very excited about I think beyond that. I think the whole home space right whether it is the appliances you use in the kitchen the the the utensils that you use in the kitchen or the or the Furnishing that you use at home. I think that hasn't kept in line with how we use our home in 2020 the way we use. Our home is very different from the way we used to use our home 20 years back. So I think there's a lot of disruption that is possible there as well. Okay, and probably I will take a minute and try to understand when you say it has changed the way we use our home one thing. I understand probably we have got smarter. We talked about smarter homes iot and stuff like that. What are the large label to three points which you think have changed considering our use of Actually, I wasn't even going in that direction and I'm assuming you're a techie I can see where this is coming from. But but just think about it 20 25 years ago Sunday morning 9:00 a.m. What were you doing? all of us Reality, I think that is something that one needs to think about second. I think from a food eating habit. It used to be a very Community thing lunch except hang it in Eric's I think a joint family meringue it today. It is nuclear families may be only one meal will have together. All the other means are separately done. And even that one meal that we have together. A lot of the meal is being ordered in from delivery platforms like figgy so matter Etc. So how does therefore the Kitchen change to take care of this new reality. Do we need the four burner gas stove. Do we need electric to come in there? I think those are questions that we keep asking ourselves. So we keep meeting very interesting entrepreneurs who are reimagining the entire home space and then creating brands in product categories within the home. For example, a lot of our homes today are temperature-controlled. So the kind of quilts the kind of bed linen that He was a very different from before earlier used to have a summer heat and a winter blanket now. It is one quilt that we use throughout the years. So I think a lot of those habits of how you use the home at changing and that is the more interesting piece for us. That's right. When I see you are option of consumer insights and knowledge, and I think we can probably talk for hours. Please not finished classic. Now I think that the feeling is mutual. So so I think what we should probably do that thing in a subsequent open dogs. And and yeah, it was really a pleasure talking to you and I can tell you that I had a lot of fun and I don't know about the value we created and other might want to listen or not. But I think I had a lot of fun talking to you. Yeah. Yeah, me too. I mean as always and you know, we should do a reverse open-top because we would like I would like to understand from you. The tech that you guys are building is going to impact how consumers communicate with the next decade and I would love to get your thoughts on it and, you know, try to learn from that into and get those learnings into how we are thinking about building our brand specific job. Sure. Great been a pleasure talking to you and have a great day. So to thank you so much. Bye.