FirstCry Business Model: How does FirstCry Earn Money?

FirstCry, established in 2010 by Supam Maheshwari and Amitava Saha, has evolved into India’s leading omnichannel retailer specializing in baby and children’s products. The company’s business model is multifaceted, encompassing various revenue streams that have contributed to its significant growth and market presence.

Online Product Sales

The cornerstone of FirstCry’s revenue is its extensive e-commerce platform, which offers a vast array of products, including baby gear, clothing, toys, and essentials. Customers can browse and purchase from a selection of over 200,000 items sourced from more than 5,000 brands. Revenue is generated through direct sales of these products, with FirstCry earning profits by marking up the cost price to the selling price.

Offline Retail Stores

Complementing its online presence, FirstCry operates a substantial network of physical stores across India. These brick-and-mortar outlets function under a franchise model, allowing the company to expand its reach with reduced capital expenditure. Revenue from this channel is derived from:

• Franchise Fees: Franchisees pay an upfront fee and ongoing royalties to operate under the FirstCry brand.
• Product Sales: Both private label and third-party products are sold in these stores, contributing to the company’s overall revenue.

This hybrid model enhances customer engagement by providing a tangible shopping experience alongside the convenience of online shopping.

Private Label Brands

FirstCry has developed its own private label brands, such as BabyHug, offering products like clothing, toys, and baby essentials at competitive prices. By manufacturing and selling these products directly, the company captures a larger share of the revenue and increases its profit margins, as it eliminates intermediary costs.

Advertising and Promotions

Leveraging its extensive customer base and platform traffic, FirstCry generates additional revenue by offering advertising opportunities to brands. This includes:

• Sponsored Listings: Brands pay to feature their products more prominently on the website and app.
• Seasonal Campaigns: Paid collaborations during festive seasons and special occasions.

These advertising services provide brands with targeted exposure to a niche market, while contributing to FirstCry’s income.

Subscription Services

FirstCry offers subscription services that provide customers with exclusive benefits and discounts. These services generate recurring revenue and foster customer loyalty by encouraging repeat purchases.

Hospital Outreach Program

An innovative customer acquisition strategy employed by FirstCry involves distributing gift hampers to new mothers in over 70,000 hospitals across India. These hampers include product samples and vouchers, introducing parents to FirstCry’s ecosystem from the outset. While primarily a marketing initiative, this program indirectly drives revenue through increased brand loyalty and repeat purchases.

International Expansion and Diversification

FirstCry has ventured into international markets, including the United Arab Emirates and Saudi Arabia, broadening its customer base and revenue streams. Additionally, the company has diversified through its subsidiary, GlobalBees, which contributes significantly to its overall income.

Financial Performance

FirstCry’s financial trajectory reflects its strategic initiatives and market expansion:

• Revenue Growth: In the fiscal year 2024, the company’s revenue from operations increased to ₹6,481 crore from ₹5,633 crore in FY23. Notably, its subsidiary GlobalBees contributed ₹1,209 crore to this income.
• Profitability: The company has been focusing on reducing losses, with reports indicating a 34% decline in net loss ahead of its initial public offering (IPO).
• IPO and Market Debut: In August 2024, FirstCry successfully debuted on the National Stock Exchange of India, with shares surging 52% on the first day of trading. The IPO raised $501 million, reflecting strong investor confidence in the company’s business model and growth prospects.

Conclusion

FirstCry’s diversified business model, encompassing online and offline sales, private label products, advertising, and strategic expansions, has established it as a dominant player in the baby and children’s products market. Through continuous innovation and adaptation to consumer needs, the company has built a robust revenue framework that supports its ongoing growth and profitability.