Hushbabies which was started in 2009, operating in baby-products and parenting category was acquired by Lapis last year. Recently it has also received investment from Indo US Venture Partners and it has grown from 100 orders per day to 1000 orders per day in six months. Iamwire interacted with Sridhar Seshadri, CEO – Hushbabies who has earlier worked with Google, ICICI, RangDe, and TCY and joined the Board of Hushbabies this January. Below are the excerpts of the interaction.
Tell us more about the acquisition of Hushbabies last year and formation of Lapis?
Lapis was created last year, and operations were started August 1, 2011. What we did is we took over two brands; one was Hushbabies, which was a startup. We also approached Jasper, the company behind Snapdeal and took over a brand of theirs called Babybox. Essentially that brand had a similar objective of parenting needs and we merged the two brands and are now running them as a single company. Together they are helping strengthen the reach of Hushbabies on both online and offline space in Hospitals.
Hushbabies recently raised funds so where you are planning to use it?
We have completed our first round of funding from Indo US Venture Partners. The funding will focus on three aspects. We would look at investing in several key areas – enhancing our customer support, strengthening logistics and on technology that enhances consumer’s online experience.
What is the current relation of Lapis with Jasper?
We are largely held by Venture Capitalists, we are two separate companies.
We see there is huge amount of traction building up among consumers for this category, is the demand really high?
Baby care products market has been witnessing an exponential growth of late. Demand is growing in leaps and bounds with triple digit annual growth. We now cover almost 600 cities. I really think for customers outside non metro, just the availability of the wide variety of products is a big boon.
What are your order economics; are you doing positive contribution margin?
We are currently in a growth stage, from last six months we have grown our business almost 10X from Jan till now and now we are currently doing almost 1000 orders a day. The opportunity to grow from here on itself is tremendous; customers like the ecommerce experience in this category so I expect the momentum to continue like that. In this growth stage we are still investing in growing our momentum so for path to profitability I think it is too early to say about that.
What metrics are you using to measure your growth?
We at Hushbabies.com have a unique strategy in which we focus on the growth of our business with repeat customer purchases. We believe that customers come to us not just for the variety and quality of products we have on offer, but also for the information and knowledge we offer them. We also work on creating a number of WOW experiences (for example, sending personalized greetings during the baby’s first birthday). Combined with strong customer support and on time delivery, we believe that customers would stay loyal to us. Each of these key metrics determines the health of the business and is best used to evaluate the company’s growth.
How are you reaching your TG, what marketing channels are providing good ROI
For hushbabies.com, we use multiple means to target audiences online and offline. We have been reaching out to our target customers through Hospitals and maternity clinics and thus initiate relationship with them. Special HushBabies Gift Box containing many useful samples is being offered to new parents to make them feel special. Moreover we track the ROI of every customer and then decide whether to invest in a particular marketing campaign or not.
How is the competition in this category coming up?
There are a number of players offering a range of products targeted towards parents with young children. What makes HushBabies unique is the 360 degree approach to becoming a partner, rather than just a seller of goods.
Tell us more about female to male shopper’s percentage in your category and the repeat purchase behavior.
While a majority is women, men dominate in the main metros. We believe that this is reflective of the way buying decisions are made in today’s world. Majority of our consumers are mother’s to be and parents of children in the age group of 1-5 years. We have good repeat purchase metrics and work hard on delivery to our customers.
So what is the customer acquisition cost in this category right now?
Customer acquisition actually varies very significantly across categories and across various channels of acquisitions. We have multiple forms of customer acquisitions, we have an offline customer acquisition channel, we have 4-5 different online acquisition channel, we have phone based acquisition channel as well. For us all customer acquisition channels across these entire put together is about just in class.
What categories are people buying?
In terms of products we most frequently sell diapers, shampoos etc. In any given month we have almost 6000 different items that are sold. Also, demand for Indianized products is rising.
Are you planning to expand in more categories?
On our website we now have more than 10000 products across various categories. What we want to do is to bring high quality products in the marketplace. We have quality check partners and every product goes through it before we decide whether we put it for sale for our customers to buy or not. We also have a rating system on the basis of which consumers rate their experience with products. So I think for us expanding the portfolio is critical where it is has to be a very thought out process of expansion through quality check or through continuous quality check on the products that has been already there.
How is COD working for you?
More than 80% of all our orders are prepaid while the rest are postpaid in the form of COD. We have been able to optimize the cost of COD and also to keep our return rates on COD orders very low at below 1%. So for us I don’t see a challenge in COD.
How has your experience been in e-commerce since you joined Hushbabies and what have been your key challenges & learning’s?
I joined in early January this year and my experience has been pretty fantastic. The industry itself is growing in three digits every quarter, so it is a very interesting opportunity.
I think the biggest challenge is to take learning from the large well established companies and using it in running a small startup. One of the things that we have done is to offer call centre support in 6 different Indian languages. So for example a customer calls up and speaks in Kannada, it is recorded and next time the call is made from the same number it is routed to the call centre executive that speaks in the same local language.