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Online to offline platform: A case study of firstcry.com

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 International Journal of Economic Perspectives, 2017, Volume 11, Issue 3, 424-430.

Online to Offline Platform: A Case Study of Firstcry.com

Anupriya SAXENA*
Amity Business School, Amity University, Uttar Pradesh, E-mail:
anupriyasaxena88@gmail.com. Mobile: 9417647512.

Sachin Kumar SRIVASTAVA

Amity Business School, Amity University, Uttar Pradesh, E-mail:
contact2sachinsrivastava@gmail.com. Mobile: 9415317597.

ABSTRACT

Innovation has become the key rationale behind any business success today. Baby care market is still untouched
and niche. Firstcry.com has bridged the demand and supply gap in baby care market, through shifting scurry brick
and mortar stores to click and purchase model, which is conceptualized as an innovative business strategy.
Primarily due to the exponential growth of E-commerce in India, the company has made the balance between
online and offline stores to attract more customers. Integration and synergy between click and brick model cover
overall market: Tier I by click model and Tier II/ Tier III by franchisee brick stores. Establishing the common
pricing system for both click and brick model makes this more acceptable to customers towards both spaces. This
study is intended to conduct a case study on Firstcry.com. The study provides a detailed view of company’s
foundation concept, integration of click and brick, innovative pricing and franchisee model and market coverage
strategy. Primary and Secondary data sources are used to get in-depth knowledge of the case. The results show
that The Increase in per capita income has made towns a desirable market. Captioning of all types of cities has
given Firstcry.com a wide recognition and revenue growth.

JEL Classifications: L86; M31; P42.

Keywords: Click to Brick; Market Coverage; Innovative Concept; Franchisee; Pricing Idea.

*Corresponding author.

1. INTRODUCTION

Online-to-offline commerce is a business strategy that draws potential customers from online channels to physical
stores. Online-to-offline commerce, or O2O, identifies customers in the online space, such as through emails and
internet advertising, and then uses a variety of tools and approaches to entice the customer to leave the online
space. This type of strategy incorporates techniques used in online marketing with those used in brick-and-mortar
marketing. O2O e-commerce mode is a combination of offline business opportunities with the Internet. O2O e-
commerce platforms attract customers online, but the real consumption of services must be experienced by
consumers offline. This mode puts high request forward to offline service quality. Offline service quality will not
only affect offline entity shops, but also will affect O2O platform. The development of O2O platform cannot leave
the collaboration with offline entity shops. Only with the efforts from both “Online” and “Offline”, O2O mode
will develop well in the future. Although O2O platform can not control the offline service directly, it can help
improving offline service quality by strengthening the qualification review mechanism, conducting field
investigations, cooperating with offline entity shops and adopting the consumers’ advice. Only in this way, it can
help improving the consumers’ loyalty to O2O platform and finally promoting the healthy development of the
O2O platforms (Du & Tang, 2014).

The Indian e-retailing industry is expanding and diversifying at a very high rate. According to recent reading, the
market has expanded from $600 million to $2.3 billion in last two years. Now we are at same flexion point on
which China was ten years before. It is just a starting of a new era. The e-retailing market will expand $32 Billion
by 2020 expectedly. As stated by Matrix Partners that India is going to be a work land for many Billion dollar e-
commerce companies. According to the present scenario, only three e-retailer Indian companies are in billionaire
club: Flipkart, Snap deal and Paytm Not, particularly these three but other large subdued and foreign companies
have joined this heated war.
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 International Journal of Economic Perspectives, 2017, Volume 11, Issue 3, 424-430.

Companies like Amazon, Shop clues, and eBay have preferred to accept Horizontal Market Model. In a dynamic
market, all companies are offering identical product and similar user experience which started a competition for
Market share while new entrants are coming up with generative ideas by concentrating on Vertical or Niche
category they are taking their share of the market. Examples are as follows:

FirstCry.com, Hopscotch.in and BabyOye.com are the three big players of the baby care products (niche) market
in which Firstcry.com has established dominance in baby care market since last four years. Hopscotch follows
flash sales model in comparison to the inventory based model of Firstcry.com.Hopscoth.in, which was founded by
Rahul Anand in 2011. The third Big company BabyOye built both an inventory storage model and a just-in-time
arrangement with its distribution partners. Mahindra has acquired Babyoye in February 2015. Due to high market
share and intrinsic reach, big Horizontal players like Flipkart and Amazon have wiped out much small emerging
niche mushroom business. At present, only a couple of e-tailers, Firstcry.com and Hopscotch.in, has sustained
themselves from a dozen of players who have entered five years back and vanished. Supam Maheshwari, an
engineering graduate from Delhi College of Engineering and an IIM-A management alumni, has projected an
innovative idea into a real business success story. He started working with a project for Brainvisa technologies,
one of the largest e-learning company, in 2000 and was there for 7 years.

Amitava Saha, an IIM-I alumni joined hands with Supam in 2010 and gave a hard hit to traditional unorganized
baby care market by introducing online portal Firstcry.com. BrainBees Solutions was founded by Supam
Maheshwari and Amitava Saha in late 2010, which owns the brands: FirstCry.com. FirstCry.com is a company
with 1000 heads as of now. Firstcry.com is an online and offline brand which provides us a huge range of baby
care, kids, and to-be-mom products. It was established in 2010 to address parents’ desire, to give access to best
brands, new products, and superior quality. Firstcry.com is Asia’s largest online portal today for baby and kids
product, having an inventory of more than 2,00,000+ articles from over 2000 best international and national brands,
which includes Ben10, Pigeon, Hotwheels, Pampers, Disney, Barbie, Fisher Price, Mee-Mee and so on.
Firstcry.com has a large number of stock keeping units in its basket, which includes maternity wear to baby
accessories, pre to post-delivery needs, diapers, apparel for 1 to 9 age group, toys, play school gears, baby prams,
strollers, car seats, etc. All items stored at Firstcry.com warehouses have been approached by reliable
representatives and sources.

Talking about their funding; the company has so far raised a total funding of about $69 million from various
investors including New Enterprise Associates, Valiant Capital Partners, IDG Ventures India, SAIF Partners,
Vertex Venture Holdings and Temasek Holdings. These rounds include $4 million (2011), $12 million (2012),
$15 million (2014) and $36 million (2015). The company revealed that it has a stock of more than 2, 00,000 items
on its online platform and there is a stock of around 15,000 - 20,000 articles in their offline stores. Firstcry.com
has managed to get an undisclosed amount of investment from Ratan Tata, (Chanchani, Madhav., 2016, January
21) which is his fourth investment since the start of 2016. By this, company feels high morale and is eager to learn
from his wisdom and it is a vote of confidence. Presently, Firstcry.com has 180+ franchisee owned offline stores
in 90+ cities and would cross the mark of 200 stores by Dec2016. These would be in cities where they already
have stores as well as new ones in Tier II and III towns. Here it is a SWOT analysis of Firstcry.com.

The present study explains this novel design. Innovation (Bessant & Tidd, 2007) is the key ingredient for the
success of Firstcry.com. Following objectives of the study are outlined:

- How they come up with a niche market idea? (Dalgic & Leeuw, 1994)

- What factors influence them to choose online and offline platforms both?

- How an innovative franchisee pricing system opted?

- What strategy in opening retail stores in Tier II and III towns will be followed?

In the following section, these objectives will be explained by details.

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Table 1. Results of SWOT Analysis

Parent Organization BrainBees Solutions Pvt. Ltd.

Category Ecommerce and Retail both
Online and Retail-To be mom apparel, baby products, diapers, baby fashion
Sector and much more
Tagline/ Slogan Asia’s Largest Online Baby & Kids Store
USP An ample number of products at your doorstep

Segment New parents who need exclusive products for their babies
Target Group Middle income and upper-class income parents
Positioning A wide range of product coverage for a new parent
SWOT Analysis
1. Brand visibility with online and 180+ offline stores
2. 2, 00,000+ products from 2,000 + national and international brands
3. Alliance with brands like Pigeon, Farlin, Mattel, Pampers, Disney etc.
4. Four rounds of fund raising from investors like Saif Partners, Valiant Capital
Partner, IDG Ventures India e
5. Asia’s No1 Baby care online portal
6. One price strategy for online and offline both customers
7. Kiosk box concepts which are gifted to new mothers in collaboration with
Strengths hospitals. It increases customer footfall.
1. A niche market is very specific which is very risky and not fully developed
in the nation
2. Extensive marketing strategies used by companies like Flipkart and Amazon
Weaknesses 3. Market coverage of big e-tailers
1. Globalization
2. Can also opt for Horizontal Market Model
Opportunities 3. Emphasize on its own personal label trade Babyhug
1. Mahindra group has acquired BabyOye.com. Mom and Me have renamed as
BabyOye.
2. Online rivals are gaining funds from foreign investors like Helion Ventures,
Velos Partners.
Threats 3. Babyoye.com takes over Hoopos a rival.
Competition
Competitors BabyOye, Hopscotch,Flipkart,Amazon

2. DISCUSSION

The Indian population has seen tremendous growth since the independence in 1947. As per Indian population
survey, numbers were 1.31 billion by the end of Feb’16. After China, India is having the second largest men power.
As while you are reading this, 51 births are happening per minute. What idea do these numbers generate? It is a
good time to be in the business that promotes baby care products! The essentiality for baby products is not going
to decline soon. According to data collected by ResearchMoz in 2015, baby care market will consistently grow by
17% within the time period of 2014-2019. The increase in dual income group in nuclear families and the need for
baby products due to high birth rate are inciting the growth of the baby care market in India every day (Figure 2).

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 International Journal of Economic Perspectives, 2017, Volume 11, Issue 3, 424-430.

In 2012, the baby care product market business was approximately $ 2-3 billion in India. Presently, the Indian
baby care market has reached $11-12 billion and keeps growing. If you examine product prices range in this
market, the daily routine products range falls within the INR 100-200 range which is non-inclusive of shipment
fees.

Approximate of March 16-May16

98.00%
96.00%
94.00%
92.00%
90.00%
88.00%
86.00%
84.00% approximate of last 3 month
82.00%

Note: By SimilarWeb.
Figure 2.
Desktop Traffic

Eight years ago, when Supam, CEO of Firstcry.com, used to travel abroad in his earlier jobs, he used to pick up a
lot of stuff for his child, because the quality of presents' products abroad was more trusted and there was much
variety than the Indian market. Because of cultural aspects in most Indian families, hand weaves are a common
practice. Baby clothes, toys, and accessories of the elder children are to be transferred to the younger siblings or
relative kids. Looking at this traditional lag as a business opportunity, they conceptualized Firstcry.com. The
shortage and approachability of high-quality baby care products in India is the key reason, which prompted Supam
to come up with Firstcry.com, who always wanted to try a hand in the retail fashion industry. The company says
that their progress has been phenomenal. When they had started, people were not even aware that Firstcry.com or
a baby care company existed, but today they are the leading player in this segment, with 10-15% growth month-
on-month basis. The basic clause is to keep innovating, improving and adding money value at each ladder of
customer experience. Staying relevant in the minds of customers is imperative.

Nowadays, the Indian E-commerce industry is one of the world’s fastest growing platforms. In 2016, it is expected
to jump over by 67% of $23 billion in 2015. According to ASSOCHAM, out of all E-commerce categories in 2015
baby care segment will grow up by 53%. This puts this segment in third place, right after apparel (69.5%) and
electronics (62%).

Firstcry.com
Babyoye.com
Hopscotch.in
Mybabycart.com

Note: By- SimilarWeb

Figure 2.
Baby Care Product Specific Platforms

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 International Journal of Economic Perspectives, 2017, Volume 11, Issue 3, 424-430.

E-commerce is a modern trade in urban living, by which most people not only find it easier to shop online but also
a cheaper platform (Anukrati, 2013). New parents find it more informative, easier, and comfortable in comparison
to the unorganized market. Then there is the belief that online retail platform has a better and wide variety. In
today’s era, the maximum population is educated about internet usage and handling. Expecting mothers are taught
about the nutrition and hygiene of their babies, which are required to have strong healthy lives and this gives them
priority towards online shopping.

The increase in nuclear families has declined the traditional concept of baby care. With dual income and more of
disposable income in new families, innovative quality care products are affordable for newborns. Due to more
socialization and urbanity, people are more conscious about their living standards, which give space for superior
and expensive products. Time is changing, women are joining the world of salaries and some are single mothers
too. It is tough to up-bring babies with traditional ways. Making a balance between two full-time jobs is difficult.
Hence the presence in E-commerce shopping ends the need for physical shopping at baby stores. Firstcry.com
realized that about 85 per cent market is thriving to remain offline even after five years of E-commerce regime.
Online shopping is effortless and customer friendly but it does not provide that touch and feel experience, which
customers in baby care segment would especially want to get secure for baby products. Within six months of their
operations, after September 2013, they started building their offline presence. Firstcry.com has developed a mobile
app which is on the go. This gives them a presence to all touch points, said Anuj Jain, senior vice-president
marketing, Firstcry.com. Firstcry has combined all three platforms of business to understand buyers. It allows them
to cover all types of customer platforms according to their preferences.

2.1 Market Coverage Through Unique Hybrid Plan

As internet penetration is growing, young educated parents are inclined towards buying baby products online, but
still, in cities, having less awareness towards the internet and limited computer uses, retail stores come out to be
the best option to baby care products market. Firstcry.com has come up with a solution to this problem, with its
mix of the click-and-brick model (Schramm H., Swoboda B. & Morschett D., 2007), while focusing on Tier-II and
III towns over metro cities, a wide assortment of products and a precise last-mile delivery model. The company
has accounted half of his revenue from both of the platforms approached by small town parents. Each branded
store of Firstcry.com follows franchise model which are opened in small towns and cities to assist consumers to
deal with their restrain to shop online. At the outset, what sets Firstcry.com ahead of their competitors is that it has
180 stores (2 or 3 are added every month) across 90+ cities and towns, the greater number of these in Tier-II and
III towns. These include towns such as Faizabad, Kota, Malegaon, Karnal and Raichur and cities such as Surat,
Jodhpur, Varanasi, Allahabad, Patiala, and Coimbatore.

Firstcry.com strongly believes in franchisee model of business. The minimum size required to open a store is 1000
sq ft. These physical stores also work as warehouses or mid centers for nearby cities online orders. Retail stores
focus on contributing efficiency in supply chain, in terms of product sourcing and diversity, warehousing and
logistics. Concentrating on mobile industry evolution, FirstCry.com has developed a mobile app for Android and
iOS users, which provides everything your baby care needs. So, by applying this theme: ‘big store for little ones
always handy on mobile’ is executed. The company offered purchase flexibility, seamless experience for new
parents via mobile/the web. The company plans to amplify its offline stores to reach 400 stores by the end of the
year 2017 (Priyanka, 2016).

The brand pursues what is known as the 'kiosk innovation model', where buyers can browse through the inventory
at offline stores screen and order online as a part of its Omni-channel strategy to tap small towns. Kiosk innovation
at Firstcry.con stores to tap small cities, is a innovative concept, which acts like a catalogue open for customers,
to look around 2,00,000 products and above and order online as a part of Omni-channel strategy, on a 32 inch
touch screen like television in stores, order online on spot, and get the product available at the store in next 2-3
days. This model has enabled to increase conversions up by 10%. CEO of Firstcry.com said in a statement that
low offline presence of baby products in untapped markets makes them more optimistic about their company’s
growth and success, as present shoppers exhibit mixed behaviors while purchasing online and offline. The
company needs to offer solutions in both platforms and parallel build on both of them.

2.2 One Price Strategy

The boom of branded online apparel and fashion industry is very much driven by huge discounts given by online
portal which is not available in retail stores and mall. If these discounts reach to retail stores, they are the season
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 International Journal of Economic Perspectives, 2017, Volume 11, Issue 3, 424-430.

or specific occasion based. So, a person tends to check product offline, end up with purchase online due to having
same product with lesser prices. Many companies are using this as a strategy to give special discounts on online
shopping either their own or some specific portal. For instance, one renowned laptop brand is offering the same
laptop without taxes online and with taxes on the retail showroom. Firstcry.com has come with the solution of this
consumer mindset which is a big hinder in branded retail store having an online platform too. They are having
same pricing software for both online and retail stores.

Whatever is the discount shown on online Kiosk screen (Baby Care Product Market- A Niche Worth The Risk
(2016), is given by retail counters, which attracts both online and offline customer to retail shop. The company has
started a unique strategy of directly reaching parents. Firstcry is reaching out to 1,00,000 parents each month at
present in 189 cities, with the box as a token of congratulations on the birth of their child. This box has samples of
products of different brands; coupons of international brands for offline store purchase which the parents can
redeem immediately after the baby joins the members in the home. It is the beautiful box of products with an
amount of around Rs.700-1000. They have tied up with over 8300 hospitals across 189 cities working closely with
famous chains like Apollo, Aditya Birla group and Columbia Asia and others. With the great response, this zero
pricing strategy has became fruitful for high customer footfall and awareness.

3. CONCLUSION

The following sentence is all about to say for an innovative idea generation, incubation and incorporation of
Firstcry.com. Only a risk taker will be a beginner, which stands proved in Baby care product like a niche market.

“If You Are Determined, No Hurdle Is Big Enough To Stop You from Achieving What You Want”

This study is intended to conduct a case study on Firstcry.com. The study provides a detailed view of company’s
foundation concept, integration of click and brick, innovative pricing and franchisee model and market coverage
strategy. The emergence of online shopping portals was ringing a death knell for retail, but multi-channel concept
has come as a savior. Firstcry.com has begun trying to apply the sophisticated approach that goes on from their
websites to brick and mortar retailing to squeeze even more revenue out of their business. The present customer is
having all convenience at his/her place ‘from searching products and reading a review in making a transaction and
getting parcels returned’ the entire shopping journey. The same pricing strategy does not woo them away from any
platform instead gives them chance to try both platforms. There is a saying 'India lives in towns'. Therefore, the
results also showed that market coverage of a baby care product company would not be complete without towns.
The increase in per capita income has made towns a desirable market. Captioning of all types of cities has given
Firstcry.com a wide recognition and revenue growth. The purposes of teaching plan are presenting as follows:

• To identify an innovative niche market and how to generate business idea out of the need of customers.

• To understand business launch tactics in the present scenario.

• To explore medium as much as possible, to cater more customers.

• To integrate both traditional and modern platforms to customers for business success.

• To minimize the cost of all modes of purchase and sale.

• To evolve new ideas for advertising and customer base expansion.

The Key Learning Points/Take-away are proposing below:

- Recognition of Niche market

- Click and brick model

- Kiosk model

- Omni- channel strategy

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- Gift Box Concept

- Identification of Intended Courses

- Business idea generation, Market coverage, Business strategy, marketing

Recommendation
Based on the results that mentioned above, this study recommends the further researches that the case study should
be given to students as a home assignment for reading and analysis purposes. However, the case study can be
discussed in 100 minutes with these proceedings:

1. What is the understanding of students regarding niche market of baby care products?

2. What are the strategies used to build success path for the company?

3. Give your analysis on click and brick model?

4. Do you agree with the approach of company’s franchise model?

5. Any other suggestion can be given for growth of the company?

REFERENCES

Anukrati, S. (2013), A Study on E-Commerce and Online Shopping: Issues and Influences, International Journal
of Computer Engineering and Technology, Volume 4, No. 1, pp. 364-376.

Baby Care Product Market- A Niche Worth The Risk (2016), Retrieved (fromhttp://browntape.com/baby-care-
product-market-a-niche-worth-the-risk/).

Bessant, J. & Tidd, J. (2007). Innovation and entrepreneurship England: John willey & sons.

Dalgic, T. and Leeuw, M. (1994), ‘Niche marketing revisited: concept, applications and some European cases’,
European Journal of Marketing, Vol. 28, No. 4, pp. 39-55.

Du, Y. & Tang, Y. (2014), Study on the Development of O2O E-commerce Platform of China from the Perspective
of Offline Service Quality, International Journal of Business and Social Science, Vol. 5, No. 4, pp. 308-312.

Madhav, C. (2016, January 21), Firstcry.com becomes Ratan Tata’s Fourth investment in 2016.Economic Times.
Retrieved (fromhttp://economictimes.indiatimes.com/small-biz/startups/firstcry-becomes-ratan-tatas-fourth
investment-in-2016/articleshow/50661686.cms.

Priyanka, S. (2016,January 8), Firstcry.com to ramp up store count from 150 to 700.Economic times. Retrieved
from http://articles.economictimes.indiatimes.com/2016-01-08/news/69615460_1_idg-ventures-india-firstcry-
com-supam-maheshwari.

Schramm, H., Swoboda, B. & Morschett, D. (2007), Internet VS. Brick and mortar stores analysing the influence
of shopping motives on retail channel choice among internet users. Journal of Customer behaviour, Vol. 6, No.1,
pp. 19-36.

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