Thanks for sharing this. What was the reason to exit ? (more so at a loss)
I looked at Brainbees because of the sharp price correction it has had since its IPO, I thought I would find a neglected high growth e-commerce company, but here’s what I found:
Startups tend to prioritize growth over profitability, as evident from last few quarters Brainbees has none of them, it is growing revenue at 10-11%, proftiability remains restricted to adjusted EBITDA only.
India (Multi-channel): 69% of Rev, out of which 80% is online and 20% is offline
International: 11% of Rev
Globalbees (D2C Brands): 21%
On India business and International business, Firstcry’s business model seems to have high competition from vertical e-comms like Amazon, Flipkart and Quick comms like Zepto, Blinkit and these competitors seems to offer better price, delivery times and service to the customers. Thus the core online business is at risk!
Market leaddership in terms of Revenue is there, but it is again growing very slow as evident from the last few quarters.
International business losing money, which again is growing at very low pace, citing competitive pressures from 2 horizontal e-comm companies.
Business from fashion category (52% of Rev), especially from own brands can give them an edge, but these brands, its goodwill and value to the customers needs to be evaluated.
Firstcry looks similar like a Myntra, with say a vertical e-commerce in multiple categories with multiple brands and no significant competitive advantage over vertical e-commerce and good D2C brands.
On Globalbees (D2C Brands): These looks like random brands in unrelated categories, company has spent ~1500 crs on these brands in the past, the current revenue from these brands is around 1500-1700 crs. These brands has no relation to product category of Firstcry, no competitive advantage, brand value of its own as such, they are just popular and top ranking on various horizontal e-commerce platforms, that is where the revenue comes from.
Verdict: Avoid as of now, look for strong signs of high growth and clear path profitability.
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