Inside the Success Story of FirstCry: Dominating the Online Babycare Market

In the past, Indian parents faced challenges in sourcing high-quality baby products. With limited options available and unreliable online shopping experiences, finding the right products was a daunting task. This frustration sparked the inception of FirstCry.

Supam Maheshwari, a father himself, experienced this struggle firsthand. Unable to find satisfactory options in India, he resorted to purchasing baby products from abroad. Teaming up with Amitava Saha, they envisioned a solution: a platform where Indian parents could effortlessly discover and purchase top-notch baby products. Thus, FirstCry was born, revolutionizing the accessibility of baby care essentials in the country.

Who Founded FirstCry?

FirstCry’s inception owes to the collaboration of Supam Maheshwari and Amitava Saha, the innovative minds behind the venture. Maheshwari, a graduate of IIM Ahmedabad and Delhi College of Engineering, and a former co-founder of Brainvisa Technologies, brought his entrepreneurial acumen to the endeavor.

Meanwhile, Saha, equipped with a master’s degree from IIM Lucknow and a BTech from IIT Varanasi, contributed his extensive expertise to complement Maheshwari’s vision. Together, they embarked on the journey of establishing FirstCry, driven by their shared determination to address the gap in the Indian market for baby care products.

The Origin Story

In 2010, Maheshwari and Saha embarked on a journey driven by the vision of an online platform catering to Indian parents’ needs for top-tier global baby care brands. Their venture kicked off with an inventory-based model, dispatching products from warehouses situated across key Indian cities.

Evolution brought about a transformation for FirstCry, transitioning into an omnichannel retailer. Seamlessly intertwining online shopping with brick-and-mortar outlets, the platform expanded its offerings to encompass a diverse array of baby care essentials. With a catalog boasting over 90,000 items from approximately 1,200 renowned brands, both domestic and international, FirstCry became synonymous with comprehensive parenting solutions.

Central to its ethos is a commitment to delivering a frictionless shopping experience, underpinned by swift delivery and attentive customer support.

Presently, the platform boasts a network of more than 350 franchised stores spread throughout India, embodying its steadfast dedication to serving parents nationwide.

Revenue Model and Financials of FirstCry

FirstCry boasts a diversified revenue model, harnessing product sales across its online platform and brick-and-mortar stores alongside franchise fees. The company innovates its marketing approach with initiatives like the ‘FirstCry Box,’ catering to new parents’ needs and preferences.

Despite achieving substantial revenue growth, reaching Rs 5,632 crore in FY23, FirstCry grappled with the task of harmonizing rapid expansion with escalating expenses, resulting in heightened net losses.

FirstCry’s Expansion and Mergers

FirstCry’s journey of expansion is punctuated by strategic mergers, notably with BabyOye and Oi Playschool, bolstering its market reach and product portfolio.

In the face of competition from online giants such as Myntra and Amazon, alongside local vendors, FirstCry persevered with its robust foothold in the baby care segment, leveraging its diverse product spectrum and omnichannel strategy.

Financial Growth of FirstCry

In FY21, FirstCry witnessed remarkable financial strides. The company’s operating revenue surged twofold to Rs 1,603 crore from Rs 815 crore in the preceding year, indicating a robust growth trajectory. FY21 marked a pivotal year for FirstCry, achieving a profit of Rs 216 crore, a noteworthy turnaround from a loss of Rs 191 crore in FY20.

Furthermore, there was evident enhancement in cash flow, with the deficit shrinking to Rs 67 crore from a substantial Rs 300 crore in FY20. This fiscal year showcased strategic expansion and operational efficiency for FirstCry, reflected in its enhanced profitability and cash management.

Transitioning into FY22, FirstCry sustained its growth momentum, with operating revenue scaling up to Rs 2,401 crore. However, the year posed challenges, with total expenses surging to Rs 2,568 crore, resulting in a loss of Rs 79 crore after the previous year’s profit.

The deficit in cash from operations widened to Rs 142 crore again. The escalated expenses were primarily driven by increased costs in materials consumed, rising to Rs 1,572 crore, and substantial investments in employee benefits and advertising, underscoring FirstCry’s commitment to expansion and market outreach despite financial setbacks.

In FY23, FirstCry witnessed significant shifts in its financial landscape. Revenue from operations skyrocketed to Rs 5,632 crore, more than doubling from the previous year, primarily propelled by product sales contributing to 98% of the revenue.

Despite the remarkable revenue growth, the company encountered a staggering six-fold increase in net losses, totaling Rs 486 crore. This surge in losses was attributed to substantial rises in expenses, particularly in the procurement cost of materials which escalated 2.5 times to Rs 3,935 crore, alongside substantial growth in employee benefits and advertising expenditures.

Shareholders and IPO Details

Brainbees Solutions, the parent company of FirstCry, a leading omnichannel retailer of childcare products, took a significant step in December last year by submitting its DRHP to the Securities and Exchange Board of India (SEBI) to initiate an initial public offering (IPO).

The IPO entails a fresh issue of shares valued at up to Rs 1,816 crore and an Offer for Sale (OFS) featuring up to 54,391,592 equity shares from existing investors.

Key stakeholders such as SoftBank, Mahindra & Mahindra (M&M), and US private equity fund TPG are participating in the offer for sale (OFS). SoftBank, holding a 25.5% stake, intends to sell 2.03 crore shares, while M&M plans to offload up to 28.06 lakh shares. Noteworthy divestments include Ratan Tata, Tata Sons Chairman Emeritus, selling his entire stake of 77,900 shares, and FirstCry Co-Founder and CEO Supam Maheshwari divesting 18.24 lakh shares.

The capital raised through the IPO is earmarked for various purposes including establishing new modern stores and a warehouse, lease payments for existing stores, sales and marketing endeavors, technology and data science investments, funding acquisitions, and strategic initiatives. Furthermore, a portion of the funds will be allocated towards market expansion in Saudi Arabia.

SoftBank, Mahindra & Mahindra (M&M), and US private equity fund TPG are prominent participants in the offer for sale (OFS), with SoftBank set to sell 2.03 crore shares and M&M planning to offload up to 28.06 lakh shares. Ratan Tata, Tata Sons Chairman Emeritus, and FirstCry Co-Founder and CEO Supam Maheshwari are among the notable sellers, with Tata divesting his entire stake of 77,900 shares and Maheshwari selling 18.24 lakh shares.