What makes Indian D2C brands unique : The Fireside View
Vinay Singh of Fireside reveals why he became a VC and leaves you with a few tips to build a great brand.
Just a decade ago every Indian knew that they were brand starved. There were very few brands and the market was dominated by Raymonds, ITC, Unilever and Britannia. However, everything changed with e- commerce becoming the cornerstone of the Indian economy from 2015, finally entrepreneurs who had no experience of physical distribution could list their products online on a Flipkart, Snapdeal and Amazon to sell products that mattered to a new generation of Indians.
This was also a period when Fireside Ventures was born. Vinay Singh, the partner and co-founder of Fireside Ventures met theupstreamlife.com and told us that the future was only getting interesting because entrepreneurs today don’t have to go through finding tens of millions of consumers in order to build a large brand. All these brands need to know is the target audience and ensure that micro-segment is large enough to build a large business. Fireside has invested in boAT, Kapiva, Slay, Slurrp Farm, Mama Earth, Gynoveda and many others. Here are the excerpts of the interview:
What has worked in the favour of brands over the last five years?
Vinay Singh: The last five years have been great to build brands in India. Many things have come together for this changed to have happened. There is a consumer who is ready to experience new brands. The GDP per capita has gone up to $1000 and then digital technologies have played a massive role in allowing for distribution of product and content. People are using digital commerce regularly now and the Covid-19 only propelled this change towards digital adoption of buying brands.
I am curious to know the past, what made you become a VC?
Vinay Singh: If you talk about my past I want to divide it in to two parts. I am the first person who received a Masters degree in my family. Even then my family members would only know large companies and were very keen that I joined HUL, now Unilever. I ran coffee categories, personal care and several other categories. While I was in Unilever I also travelled a lot. It was my experience in America that changed everything in the last decade. Over there, I saw that brands were using digital marketing to reach out to customers and they were listening to what the consumers were saying and using. That’s when I realised that India will very soon see this happening and as a marketing person I had to learn the impact of digital. I quit my job, in the USA, and came back to India. The change was already here with ecommerce companies raising money and reaching so many households. In 2016, I met Kanwaljit Singh, before he became founder of Fireside Ventures he was already well known in the industry for all the angel investments that he had made in young brands such as Epigamia and Paperboat. When I met him and discussed the future of brands he was more than excited as it would match his hypothesis. His hypothesis was - how digital commerce can run several supply chains with one operating company. I was fascinated with what he had just said and I conceded that it was a great idea to think about and that’s when he popped the question – “let us start a fund”.
Give us advice on how should a person build their digital business?
Vinay Singh: The math of a big brand, back then, was to distribute to several outlets and get in to several households. You make more households aware of your proposition with the brand story. This is how we grew for decades. Today the math is simple, say your target is two million households digitally, you make each consumer buy four times a year at Rs 1000 per order, right there you have a Rs 800 crore brand. This is all that is required, you don’t have go the penetration route to reach 20 million households. Now it does not matter what the channel is. You have to, very fast, understand your customer and price it right. The first step is to strengthen the content so that people may discover your brand. Once this is done you need to create a great experience and figure out delight moments. The best delight moment is when you can deliver a product in forty eight hours. You must plan to get these things right. The third moment of truth is the consumption of the product itself. It needs a “wow” moment for consumers to start referring the product to others. In this playbook you have to constantly track reviews, repeats, referrals, returns and the virality along with renewal rates. These new entrepreneurs that I meet understand the playbook and are extremely focused on pushing the product on the internet. Those who track this and get the data right, will grow fast.
In the old days, just a decade ago, people released newspaper advertisements and there were no metrics for the investment other than the reach. For most categories newspapers would never work, the entrepreneurs need to look at cost per relevant reach. This is where digital media changes everything because you will provide a targeted experience to the consumer. The ads I get shown in the phone are very different to what my family members see. Entrepreneurs can micro-segment by age group, location and by gender. This is how a modern brand’s capabilities are built. Brands that will rise up from being labels to understanding the consumer’s needs will win. Digital brands should discover their cohort of consumers at a very early stage.