MENSA THE HOUSE OF BRAND
Mensa
brands is one such start-up that has taken the Indian start-up ecosystem by
surprise. In just six months, this company raised $300 million to become the
fastest-growing unicorn in Indian business history. In these six months, Mensa
has already acquired 12 consumer brands like Villain and Karigari, and in the
month of October itself, these brands seem to have hit a growth of 250 % and 140 %, respectively. And what is even more mind-blowing is that while
every other start-up in India is engaged in a cash drain, incurring millions of
dollars in losses, Mensa has claimed to become profitable within these six
months
The question is, "What exactly is Mensa
Brands all about? How does their business model work? And, most importantly,
what are the opportunities that Mensa Brands is creating for small scale
entrepreneurs? "The answer to this question lies in a new-age business
model called the Thrasio model; this name became popular because of the
meteoric rise of an American start-up called Thrasio.
It’s a company that was founded in 2018
and within just two years it hit a billion dollars in valuation and become one
of the fastest growing unicorns in the world the question is what do they
do and how does the business model of Thrasio work so let's start from the
basics If you look at the Amazon market place you will see that Amazon operates
through two types of sellers first party sellers and third-party sellers in
case of first party seller relationship, If Amazon understands that your
product is doing insanely well Amazon itself invites you directly to establish
you as a first party seller and this means that you sell your products directly
to Amazon and then Amazon sells those products to customers taking care of
everything from shipping product details listing pricing and even returns your
role as a vendor you just have to fulfil the purchase order send by Amazon and
ship the products to Amazon ,basically you just make your product and let
Amazon sell it and pay you whatever Amazon thinks is best whereas in a
third-party relationship with Amazon anyone and everyone can sell on Amazon's
marketplace and this way you get way more control over your operations in this
arrangement you sell your products directly to the consumers on the Amazon
marketplace but the catch over here is you have to take care of everything
starting from your product listing advertising pricing and even logistics and
returns and in order to make this process a little bit easier Amazon offers
something called Amazon's fulfilment service that is called as FBA
(fulfilled by Amazon) this is a shipping program to send your products to the
customers through the logistics of Amazon This is what you call the
direct-to-consumer model, and in the past 20 years Amazon's third-party
sellers have done so well that in 1999 only 3% of the gross merchandise sales
came from third-party sellers, but as time passed the contribution of the
third-party sellers accelerated at such a pace that as of 2019, these
third-party sellers made up 58% of Amazon's gross merchandise sales, which
means Amazon's third-party sellers contributed more to Amazon than Amazon's own
first-party sellers. Because of the visibility and accessibility of Amazon,
even people like you and me have been able to sell our products across the
country, and according to rough estimates, close to If you look at the
on-ground reality, it’s actually being run by small-scale entrepreneurs who
manage everything from marketing, listing, manufacturing, packaging, and even
shipping. This is both extremely tedious and costly. Process especially in a
place like Amazon where there is cut throat competition it becomes extremely
difficult for small-scale brands to bring new products and scale their brand
therefore in spite of having a great product these small-scale entrepreneurs
reach a saturation point in fact market research even states that Amazon
sellers in most cases reach a saturation point when they are close to three to
five million dollars in revenue and If they want to grow any further they either
have to take in hefty loans or worst case they have to take up a personal debt
and this saturation of growth is where Thrasio comes in It’s a company that was
founded by the veterans of different industries who have both the credibility
and insight on how to grow these small skill brands and using their credibility
they raised a million dollars in funding and started offering an exit strategy
to these great Amazon sellers and once these third-party sellers got acquired
by Thrasio the company uses its scale capital and expertise to further grow
the operations a classic example of the same is a company called Angry
Orange after extensively serving through the Amazon marketplace
Thrasio found Angry Orange which is a company that makes pet older eliminator
spray they had excellent customer rating and were clocking in an annual revenue
of $2 million but then after four years of running the company it was taking a
lot out of its founder Mr Adam both in terms of capital and management and
taking the risk of growing the business any further did not look so lucrative
to him and this is when Thrasio approached him and offered him an exit plan and
within just one week Thrasio acquired the Angry Orange brand with a 100 pay out
to Mr Adam and then they started the process of acceleration they rebranded the
entire angry orange product line up and revamp the packaging to give it a
premium look they presented a better brand story did some excellent copywriting
and brought in professional photographers and videographers to shoot
world-class commercials and then started promoting it on Amazon furthermore
Thrasio's marketing team took it one step forward and instead of just focusing
on Amazon sales channel they invested heavily in to other digital marketing
channels and started generating leads through Facebook and Google all thanks to
their million dollar funding they were even able to do influencer marketing and
celebrity endorsements to gain more brand value and visibility to the Angry
Orange brand and lastly the Thrasio team built an extensive supply chain to get
the product into retail shelves like target Walmart ,Ace hardware and True
value this is how Angry Orange which was once a small skill brand now became a
national brand of the United States and the result well first of all the
founder Mr Adam got a 100 pay out secondly the average monthly pay-per-click
sales increased by 1860% from 2019 to October 2021 and most importantly the
revenue of the company sky rocketed from just $2.5 million to a trailing
12-month revenue of $23.1 million this is how by leveraging a world-class team
to tell a brand story by backing it up with extensive digital marketing
initiatives in multiple channels and most importantly by strategically
investing into an efficient supply chain management system Thrasio turned Angry
Orange into a national brand in the U.S., and now that the brand has gained
enough traction, it has invested heavily in product innovation and started
creating new products like the ready-to-use spray for stain removal or even a
bathroom spray, adding to the umbrella of the Angry Orange brand. Similarly,
they took up a company called Trail Buddy and increased their
e-beta by 300 since acquisition; they took up a company called This
Workx and increased its training 12 month revenue by 785 percent since
acquisition; and lastly, they even acquired a brand called Crafts
for All to increase the repeater by 148% within just two years of acquisition.
Until today, Thrasio has orchestrated more than 150 acquisitions worth 600
million dollars and has over 22,000 products from 200 brands in its portfolio,
turning it into a giant company with a variety of brands under its umbrella.
This is how the Thrasio model works, and it is very similar to how Mensa works,
just like Thrasio.
Mensa brands first survey the market to understand the gaps
that can be capitalised upon. After that, they survey to find small skill
companies that have a digital first approach, quality founders, loyal
customers, and between 1 and 10 million dollars in annual revenue.
"Digital first" means companies that have largely built themselves
over a digital ecosystem, so after identifying a great product with immense
potential, they start negotiations to acquire these brands. Here's where
there's a slight difference between how Thrasio and Mensa work: while Thrasio
gives the founder 100% exit Mensa still keeps the founders in the game with
just a major stake in the company and they intend to fully acquire these brands
gradually in the next five years after that just like Thrasio ,Mensa uses their
digital marketing specialization sales channels and supply chain expertise to
scale these brands both domestically and overseas this includes organization
and optimization of all of their inventories in all popular marketplaces and even
their official website and once the foundation is set they then invest heavily
into product innovation to launch new product lines within the canopy of the
brand and as of now Mensa has 12 brands across three key categories which are
fashion home decor and beauty and personal care.
The fashion space is completely untapped,
presenting a huge market opportunity for Mensa brands, and the most amazing
example of this acquisition is the story of a perfume brand called Villain,
which has now become a leading men's fragrance and accessories company
according to Mensa. Villain has grown by over 250% in October 2021 itself and
then we have another brand called Karigri which is a high-end
designer sari brand that grew by 140% in October similarly according to Mr Ananth
Narayanan the founder of Mensa brands ,a vast majority of Mensa brands have
grown over 100% and in the next five years Mensa intends to grow these brands
by another 1,00% this is how in the past six months through technology and
digital marketing Mensa has been able to grow their brands at a staggering rate
of 100 and in the next one year the company plans to double down on its
existing verticals by partnering with 30 more brands and what's more surprising
is that 30% of Mensa's revenue is already coming from overseas which clearly
states that Mensa is not building a brand for India but for the world itself
this is the story of an iconic Indian Start-up Brand Mensa.
No comments:
Post a Comment