Niches make Riches 🤑

All things noteworthy in the D2C space

👋 Hey!

Welcome to this week’s edition of GlobalBees D2C Pulse where we curate content around the direct-to-consumer (D2C) ecosystem in India - new start-ups, funding, acquisitions, partnerships, and more. If you missed our previous editions, check them out here!

Diwali is just around the corner and we are so excited about the decorations, colours, and diyaas…we gonna put so many of them (as we try to make up for the last year). Aren’t we glad that our Diwali diyaas don’t have to bear the brunt of the hike in matchbox prices that is set to double from December, a price revision after 14 years! Wow, inflation finally got to the matchbox industry.

Continuing the fireworks in e-comm space after Amazon banned 600 Chinese brands from its platform for review abuse, the Consumer Protection Authority has issued notices to 202 e-comm players for violation of 'country of origin' norm. Warning bell for others - Straighten up your act, fellas!

What’s in the news?

🤑R For Rabbit gets R for Rich

R for Rabbit, a baby product company, gobbled USD 5.3 mn from private equity firm Xponentia Capital Partners. R for Rabbit is a niche player offering baby-centric gears including ride-on seats, strollers, feeding range, and toys.

The Indian baby care market is booming right now and is expected to reach over USD 5 bn by 2027. VCs aren’t the only ones cuddling with the sector: B-Town A-listers like Alia Bhatt invested in a sustainable kids clothing brand called Ed-a-mamma last year, which has already grown 10x to become a USD 20 mn brand; Dia Mirza recently became the brand ambassador for a wooden toy-making company called Shumee, keeping up the eco-friendly investment streak after Beco. Read on for our trends coverage on the Indian toy industry in this issue!

🎒Get ready for some revenge travel

Be it friend-cation or solo-moon, people are eager to travel again! Fashion brands are luring people to #GoingPlaces in style. Last week saw investment in comfort fashion brands:

1. Chupps, a youth-focused footwear brand, has raised USD 1.1 mn from Venture Catalysts, Gunavanth Vaid from 4G Capital, and Kaushal Vora from Genesis Packaging. It offers eco-friendly (100% natural rubber, no plastic) flip-flops in 800+ variants and in reimagined avatars (Nazarbattu, Mummy Ka Pyaar, Marvel). Its competitors in the USD 11 bn Indian footwear industry include Solethreads, Flatheads, Neeman’s, and Caucho. Another comfort footwear brand called Trase received investment from the house of brands, Upscalio last week.

2. Upscalio also invested in travel and trekking bags maker Polestar. Polestar is a top-selling knapsack brand across multiple online marketplaces and plans to launch more products in affordable segments for the Indian masses in the future using the new funding.

Indian aggregators have finally gained momentum and are busy chasing unicorn valuation. Meanwhile, the roll-up king Thrasio has taken the bar even higher with a USD 1 bn funding led by Silver Lake at more than USD 5 bn valuation.

🚀Niches makin’ riches for marketplaces

Here are a few funding updates on the D2C marketplace front:

1. The Slate Plate satiates regional foods cravings of people living outside their hometown by creating a marketplace where it hand-picks the best flavours of India and facilitates their pan-India delivery. With Slate Plate you can order childhood favourite sweets any time at your doorstep. The Slate Plate plans to double down on its private-label offering with the recent funding.

2. Purplle, an online beauty store, has raised USD 45 mn from Sequoia Capital India amongst others

3. Vanity Wagon, an online marketplace for clean beauty products has raised USD 734K in a funding round led by Inflection Point Ventures.

   While we are on the BPC segment, Soon to IPO Nykaa has acquired a 51% stake in the skincare brand Dot & Key for about INR 95 cr. and is becoming a roll-up giant. PS: Today’s the last day to apply for the IPO shares.

   GlobalBees has acquired a majority stake in the millennial-focused skincare brand Prolixr.

Brands that caught our eye!

🌻This scent’s secret is better than Victoria’s

If you thought Indian perfumery is all about single-note white florals and desi Gulab, think again, please!

Bombay Perfumery is harnessing the potential of India’s rich heritage and creating fragrances that allude to elements that are inherently Indian. Their perfume range includes Calicut (scent of nutmeg, black pepper, and cedarwood), Chai Musk (a whiff of adrak chai) and Madurai Talkies (homage to Madurai’s jasmine flowers). Their scents are genderless and convey a story centered around ingredients indigenous to India. They also offer scented candles (that are almost too good to light) like Pondicherry Yellow (with the essence of turmeric, coconut, and sandalwood).

🙏Niche Alert: Your one-stop spiritual destination

We mentioned a niche marketplace The Slate Plate earlier that provides access to local-ethnic foods across states. Well, Onlineprasad.com is a marketplace that’s a niche within a niche and enables devotees to get prasad from more than 50 temples across India delivered to their homes. The site now boasts over 2,500 daily visitors.

With travel still not being completely safe for the elderly and the kids, this is a master idea! The company also offers ancillary services like delivery of spiritual items, pooja services, darshan booking etc. You now have a fix for every time you are trying to make up to your grandparents for not visiting them enough!

Trend of the week: India’s Toy Story🧸

“To Infinity and Beyond” - Buzz Lightyear

Toys have been an integral part of Indian culture and heritage since time immemorial (we’ve all seen the Harappa civilization toys in or History textbooks). The market is currently estimated at USD 1 bn and poised to double itself by 2025.

While the toy industry in India is still dominated by imports (China mainly), there are many tailwinds pushing the growth of local players with better and niche offerings (eco-friendly wooden toys, STEM toys, subscription boxes). These tailwinds include quality control regulations by the government to restrict Chinese imports, higher import duties, conscious customers, and government incentives. Here’s our list of niche local players in the Indian toy industry…

Reads & Recommendations

1. How to optimize product pages for high conversions by Nik Sharma

2. What's new on Twitter and Instagram by Indie Hackers

3. Ways to get attention for your product by Lenny Rachitsky

   Lenny Rachitsky @lennysan

   Seven ways to get attention for your product Read on for 60+ examples 🧵

   

That’s all for this week!

Stay tuned for more insights about the D2C start-ups in India.

We wish you a healthy and prosperous Diwali! 🪔 🪔 🪔

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