Ananth Narayanan, Founder and CEO of Mensa Brands, believes it’s impossible to build a digital-first brand in India.
“Unless people can touch and feel your product, it doesn’t become real,” he noted, emphasising the importance of diversifying sales channels for direct-to-consumer (D2C) companies.
In a fireside chat with YourStory Founder and CEO Shradha Sharma at TechSparks Bengaluru 2024, Narayanan explained that in an ideal scenario, at least 40% of total sales should come from multiple ecommerce platforms. Further, about 10% of sales should come from quick commerce, 20% from the D2C channel, and 30% from offline channels.
“The cost of traffic for an individual D2C brand is always going to be greater, so you need to be able to play the ecommerce channel,” Narayanan said, clarifying that brands shouldn’t swing the pendulum the other way either by only focusing on the ecommerce channel as that will affect the repeat rates.
The serial entrepreneur, who was the co-founder of healthtech startup Medlife, emphasised that effective brand building demands a strong focus on product differentiation. He noted that in today’s landscape, digital branding is highly democratised, making it challenging for early-stage D2C brands to maintain a competitive edge as the barriers to entry are low, leading to an influx of new entrants.
He further noted that a large total addressable market brings in larger players and competition scrutiny, adding that companies should look at niches rather than crowded markets.
“Being a 30-50% market share player in a small space…you can be profitable and if you take it global, you actually have a large market and you can build a Rs 200 crore-Rs 1,000 crore business,” he explained.
On the changing quick commerce ecosystem and changing consumer behaviour, he noted that all planned purchases are turning into unplanned purchases. He expects the unit economics of the quick commerce channel to stabilise as density builds up.
Grocery, general merchandise and utilitarian electronics are larger categories that are ideal to be built on quick commerce but Narayanan shared his doubts on developing fashion as a category on quick commerce channels.
Mensa Brands, which operates on a house of brands model, currently boasts a portfolio of 25 brands spanning beauty and FMCG, fashion, home and garden, and content. Founded in 2021 by Narayanan, who previously served as CEO of Myntra—Flipkart Group’s fashion vertical, Mensa Brands has secured $201 million in equity funding, according to data research platform Tracxn.
The company last raised $40 million in debt from EvolutionX in October 2023.
