As the Indian startup ecosystem supports the Thrasio model that has led to substantial funding into the firms linked to the model in the past couple of months, Walmart-owned ecommerce giant Flipkart has now launched ‘Flipkart Boost’, an integrated, service-fee based programme for D2C brands, which is a similar model.
The company said it will offer end-to-end support covering planning, advertising, cataloguing, logistics, quality control and mentoring to homegrown brands.
In partnership with investors including A91, DSG, Fireside Ventures, Matrix, Sequoia and Stellaris Venture, Flipkart will also assist brands secure potential funding. The programme which began inviting brand participation in September 2021, will select 100 ‘Make in India’ D2C brands to set up and nurture them based on the following criteria: Growth potential, Sustainable revenue run rate, Focus on quality, Commitment to building a long-lasting brand, Product mix, and Customer orientation.
As per the firm, it piloted the programme earlier this year with participation from F&B, baby care, lifestyle, beauty and home improvement brands, including Bikaner-based foodtech Delight Foods and Mumbai-based D2C beauty brand Pilgrim.
“With the Flipkart Boost Programme, we aim to build and nurture these growing customer-focused businesses by providing them relevant mentoring that covers access to a network of investors, market intelligence, scalability
programmes, and marketing engagements,” stated Ravi Iyer, SVP and corporate development head at Flipkart, adding that digital-first brands and the onset of the pandemic have demonstrated strong potential in the D2C market.
The Thrasio-styled model will support brands leverage the ecommerce giant’s expertise across functions with value-driven business insights, digital visibility, and geographical expansion.
Founded by Joshua Silberstein and Carlos Cashman in 2018, Thrasio is a US-based company that invests and then acquires third-party private label businesses on Amazon. The startup collaborates and buys them.
Typically, it buys brands for everyday products from small business owners for a purchase price of more than $1 million. Once it acquires the brand, it upgrades its marketing, product development and supply chain management.
Some famous brands competing for a piece of the acquiring and nurturing market space include Mensa Brands, GOAT Brand Labs, FirstCry’s GlobalBees, Evenflow, Powerhouse91, UpScalio, and 10club – all based on the Thrasio model.
While there has been no mention of acquiring such brands, Flipkart looks to be on toying with the same plan.
The ecommerce platform has been an active participant in the growing startup ecosystem. Flipkart Leap, the company’s accelerator programme, helps new and upcoming startups in partnership with Startup India, a government think-tank for the ecosystem.
Flipkart Ventures financially enables digital startups to bring their ideas to fruition. The company also holds minority control in 12 startups in India. Dubbed as Flipkart Mafia, ex-employees of the company have founded more than 250 startups.
Today, with more people shopping online than ever before as 2.14 Bn people are likely to buy goods and services online globally in 2021. The D2C sector in India is currently worth $44.6 Bn (end of FY 2021) and is expected to be worth $100 Bn by 2025, as per a report by Avendus Capital in October 2020.
Further, the Indian D2C segment has seen significant investor activity for the past few years as ecommerce market conditions have matured and evolved. In the first seven months, Indian D2C startups raised $783.7 Mn across 66 funding deals, as per Inc42+ Analysis. With 139 deals, a total amount of $833.5 Mn has been raised since 2014 by D2C FMCG startups.