Deepak's Musings #160: ♨️ Political hot potato - Is Qcom eating away at Kiranas?

💚 Why are consumers drawn to household products from brands like Beco, Koparo and Bare Necessities?

Young consumers, particularly millennials and Gen Z, are fueling a surge in eco-friendly home and personal care products.

🪴 Urban gardening brand Ugaoo closes new funding round

Urban gardening startup Ugaoo has secured ₹47 crore in funding from V3 Ventures, DSG Consumer Partners and RPG Ventures. This capital infusion will support Ugaoo's expansion plans, including establishing hubs in Kolkata, Guwahati, Ahmedabad, and Lucknow and opening new retail stores in Hyderabad and Delhi by December 2025. Together, we will continue to make India greener, one plant at a time 💚💚💚

👵🏼 Focusing on an underserved but wealthy segment: The Silver Generation.

Vulcan Post speaks to Niv Venkateish, founder of Aire, a company dedicated to creating high-quality adult incontinence products. Inspired by her grandmother's struggles with discomfort and stigma surrounding incontinence, Niv sought to offer a better solution for seniors facing this challenge.

DSG Consumer Partners is privileged to partner with NIv on her mission to destigmatize incontinence and improve the lives of caregivers and their loved ones.

📊 Wearables brand BoAt lays the groundwork for its IPO

I am a big fan of how they have built their brand and engaged with their consumer. They are aspirational and have built trust across segments. Let us see how the markets view the business as they work towards a 2025 listing.

👀 People don’t buy better, they buy different - Rajiv Bajaj

Fascinating session at CNBC TV18’s Global Leadership Summit in Mumbai. The session with Rajiv Bajaj, MD of Bajaj Auto, has many lessons for entrepreneurs building consumer brands. He shared insights into why many brands falter in the market. He emphasized that consumers often seek different products rather than merely better, highlighting the importance of differentiation and innovation in product offerings. Bajaj also discussed the challenges companies face when they launch products to serve existing markets instead of creating new ones, underscoring the need for strategic market creation to achieve success.

Many things resonated with me, and these are the strategic issues I debated with the DSG Consumer Partners founders. For example, when Rohan Mirchandani decided to enter India’s yogurt market with Epigamia, we had two prongs for the GTM:

1. Greek yogurt is a different product - texture and taste; it also focuses on the protein content and other health benefits and

2. Create a new occasion - Indians have always consumed yoghurt as a meal (breakfast, lunch, and dinner). Epigamia wanted to position its products as snacks.

💡 Learning from others: What lessons can insurgent brand founders take from Mamaearth’s latest results?

The Arc does a great job distilling lessons from the latest numbers, and the Mamaearth management team deserves full credit for acknowledging these issues and looking to correct them.

Many DSG Consumer Partners portfolio brands have faced the same problems in their GTM playbook. Three mistakes that many brands, including those in my portfolio, make:

1. Chasing unsustainable top-line revenue and stuffing channels. Guess what? The inventories will come back as returns and have to be written off.

2. Do not bite off more than you can chew. Most founders do too much too soon. More categories, more geographies, more adjacencies.

3. Not being capital efficient. No matter how big you become, always be frugal. Keep costs low so that when revenue takes a hit, you can navigate, rebase, and resume growth when ready. If you run out of cash (not the case for Mamaearth), you will not survive. DSGCP’s portfolio has many tombstones of brands that died because of poor cost management, which does not allow them more time to evolve.

🛡️ What is a brand if not a custodian of trust

As a consultant at Bain & Company in the 1990s, I remember James Allen, a partner at the London Office, telling me, "Trust: The Heart of Every Brand." That phrase stuck with me, and we at DSG Consumer Partners emphasise it when we work with our brands.

UK-based baby food brand Little Freddie is in the spotlight, given claims that many of its products are not compliant with EU regulations. Nine out of 12 Little Freddie’s stage one fruit pouches for babies aged six months and upwards contained more sugar than the declared value on the label. The company responded, “Our independent nutritional testing results are exactly as we reflect on our packs”. It is unclear how this will play out at this stage, but it's an excellent segue to what a brand is, but it's a custodian of trust.

TLDR: Brand trust takes decades to build and can be lost at the blink of an eye. Take care of it!!

♨️ Political hot potato: Is Qcom eating away at Kiranas?

We are hearing contradictory things from different camps. Zomato’s Goyal says Qcom is not hitting Kiranas but taking market share away from Ecom giants. In a recent interview with The Economic Times, Delhivery’s Barua stated that Qcom services primarily affect Kirana stores rather than the broader Ecom market. At GLS 2024, Uday Kotak highlighted that the swift expansion of Qcom poses challenges to these traditional retailers and could become a significant political issue.

📰 Other consumer-related news: deals, funding, branding and more

Consumer funding and deal news that caught my attention