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The Science Behind Building Beauty Brands | Anurag Kedia (Pilgrim)
153 Plays3 years ago
"What does it really take to build a D2C brand from zero in today's market?"
This episode unpacks the challenging yet rewarding journey of building a D2C brand with Anurag Kedia. Go beyond the headlines and learn about the grit, strategic decisions, and relentless execution required to take an idea like Pilgrim from concept to reality.
Anurag Kedia is the Co-Founder of the D2C beauty brand Pilgrim. With over 20 years of rich experience spanning marketing, strategy, and entrepreneurship, Anurag is an alumnus of prestigious institutions like IIM Ahmedabad and IIT Bombay. His track record includes achievements like scaling e-commerce businesses with 100% year-on-year growth, tripling customer bases, and significantly reducing customer acquisition costs in his previous leadership roles.
Key Insights from the Conversation (Based on likely topics):
- The Grit Required: Navigating the founder's journey from zero to one.
- Building Pilgrim: Translating vision into a tangible D2C reality.
- Finding Product-Market Fit in the competitive beauty landscape.
- Key Levers: Marketing and operational strategies for scaling D2C.
- Building Moats: Creating sustainable advantages in D2C.
- Lessons from a diverse career journey across multiple sectors.
Chapters:
00:00 Introduction: Anurag Kedia & The Pilgrim Story
01:41 Growing Up & Early Influences in Bilaspur
04:48 IIT Bombay & IIM Ahmedabad Journey
10:31 First Venture: Ideation & Founding Four Fountains Spa
13:51 Funding & Building the Spa Business
24:02 Scaling & Exiting Four Fountains
30:19 The 'Why' Behind Starting Pilgrim
44:50 Finding a Co-Founder & Building the Team
50:01 Raising Funds: Angels & Fireside Ventures
59:03 Launching Pilgrim Amidst Lockdown & Rapid Growth
1:04:10 Pilgrim's Strategy: Global Beauty & Niche Focus
1:26:33 Anurag's Advice: Marathon, Not Sprint
Hashtags:
#AnuragKedia #Pilgrim #FounderThesis #D2C #DirectToConsumer #BeautyBrand #StartupIndia #Entrepreneurship #MarketingStrategy #Branding #Scaling #IIMAhmedabad #IITBombay #Podcast #BusinessPodcast #MakeInIndia #ZeroToOne #IndianStartups #D2CBusiness
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Transcript
Introduction to Founder Thesis Podcast
00:00:00
Speaker
Let's take a look at the video. Hi, I'm Akshay. Hi, this is Aurob. And you are listening to the Founder Thesis Podcast. We meet some of the most celebrated sort of founders in the country. And we want to learn how to build a unicorn.
From Day Spa to Pilgrim: Anurag's Entrepreneurial Journey
00:00:25
Speaker
Hi, I'm Anurag Khidya. I'm the co-founder of PilgliP.
00:00:30
Speaker
Anurag Kedya is the type of entrepreneur that learned the basics of running a business in the era when there was virtually no VC who would fund a bunch of young entrepreneurs based on an idea on a paper napkin. He started a day spa train with his friends from IIMA, and they made multiple mistakes before learning how to acquire customers and scale up revenues. While running the spa, Anurag was responsible for all the products used at the spa and also for their private label products.
00:00:59
Speaker
He took the learnings from that to start all natural D2C beauty brand, Pilgrim. Pilgrim is bringing the approach of fast fashion to beauty products. They launch two new collections each year and each collection is inspired by the ingredients and traditional beauty practices of a region. So far they have launched a Korean beauty collection and an Italian collection.
00:01:21
Speaker
This approach sets them apart from all other players in the field, giving them the ability to create a year-long buzz and engage customers with a steady pipeline of new and exciting products to try. Here's Anurag telling Akshay Dutt about Pilgrim.
Growing Up and Family Influence
00:01:36
Speaker
Anurag, what is home for you? Like, where did you grow up? Akshay, I come from a town called Bellaspur in Chhattisgarh. I live in India. I live in B-Spice, Pachisa, Logan.
00:01:53
Speaker
Otherwise, while I'm a Marwadi, everybody in Blaspur just speaks phenomenal Hindi. It's a delight to kind of hear the Hindi we speak at Blaspur. Fairly well-to-do city.
00:02:13
Speaker
But small town, I don't know, but small town, I don't know, but small town, small town, small town, small town, small town, small town, small town, small town, small town, small town, small town, small town, small town, small town, small town, small town, small town, small town, small town, small town, small town, small town, small town, small town, small town, small town, small town, small town, small town, small town, small town, small town, small town, small town, small town, small town, small town, small town.
00:02:49
Speaker
So like, you know, when you were a teenager,
00:03:02
Speaker
My mother was always a studious kind, so she's an MA in Sanskrit. She was this Bihar-Bodga state-topper. So her college life was full of studies, school life, college life. She was like, throughout Ranku and Vesavala. And my father was never the studious kind. So my parents were like, I'm the first one. I'm not the first one. I'm not the first one.
00:03:36
Speaker
A lot of his college buddies, he also fought an election at some point of time, which he didn't. The local elections, he was very active in the local politics for a very long period of time. But that was the, he's an entrepreneur himself otherwise. State out of college when he was 21, 22, he said, he didn't want to do anything.
00:03:56
Speaker
So he's an engineer. He studied in Jabalpur Engineering College.
00:04:00
Speaker
That is the only thing he said. He has done various businesses, kept changing with time and he is now 72, 73, but even today he is working and he works probably harder than me. So I am unlike many other founders you will be speaking to who are in the early 20s, late 20s.
Academic and Networking Experiences
00:04:26
Speaker
So I studied in a missionary school in Bhatmei D.A.B. Public School, which was sponsored by SCCL. So we had given a lot of funds. 97 for IIT students was a very special year. You cracked IIT Bombay, it's like a pretty big deal. And what happened in this interesting change,
00:04:54
Speaker
It was a small town because it was a small town. It was a small town because it was a small town because it was a small town because it was a small town because it was a small town because it was a small town because it was a small town because it was a small town because it was a small town because it was a small town because it was a small town.
00:05:17
Speaker
Because then you saw, there was a 10x better look than the 10x. And I'm not even talking like studies, right? That is the kind of talent I came across and I said, yeah, you have to fight to survive.
00:05:44
Speaker
But then you find your feet. Because I came from a small town while we studied in an English medium school, that was also something which pulled me back for a considerable period of time. I used to hesitate speaking in English almost my entire engineering.
00:06:08
Speaker
My interviews were very similar to my English and English compared to the other kids who were there in the world. And you cracked again the top B-School in India, IMM, the world. Again, I had some very good friends and mentors, I will say. So I want to specifically recall one of my friends who has a very complex name. Hopefully I'll get it right. Auguste Diabrooz. He was my senior at IAD Bombay.
00:06:38
Speaker
And he was a walking dictionary. He really coerced me and mentored me on the areas I was not very strong in. And then I had a couple of other friends who were preparing for GMAT, all of that.
00:07:01
Speaker
And I am Bangalore. I think that because I am Bangalore, I give a lot of weightage to the experience, work experience which you have. But thankfully, I can't convert my job. But because I am in the form of a sector, I went to the company. Your job was in Bombay only? My job was in Bombay. So, I didn't have any jobs.
00:07:25
Speaker
So, I am Ahmedabad. How did that shape you? Like that two-year period? So, I am Ahmedabad, again the same deja vu feeling of, you know, what happened in the first one week. Right? After IIT, I thought, I will not feel out of place anywhere. But I am Ahmedabad, first one week was exactly the same as IIT. Because the first course which we were introduced to was accounts.
00:07:54
Speaker
And there was this C.A. Ranker who was sitting in front of me and he spoke about something called contribution margin. But after I settled in again, after in a couple of weeks for a change, I was really enjoying my studies.
00:08:18
Speaker
In a lot of learnings academically and otherwise at IIT, I had the learning sort of every other kind, but academically. I was a chemical engineer. But MBA days, I was learning a few things academically also and made some great friends.
00:08:38
Speaker
That network really which, you know, network is the professional word, but the friendships which I dealt with, both at IIT and IAM have really stayed with me. And that is what I think is the support system that I have. So where did you get placed from campus? The campus, I had two offers, I had applied for two jobs. Luckily, I got both. I had applied for HUL, because it was a Sales and Marketing role, and I applied to task data administrative services.
00:09:08
Speaker
Both for day one jobs. Day zero may be because Kali consulting companies are applying together. I got placed in both and I chose to go to TAS.
Corporate Career Foundations
00:09:18
Speaker
Because when I went to TAS, sales stints skipped. TAS gave you a few liberties, at least in the old days. You could do a brand management stint directly. I went to TAS, worked for TAS for 14-15 months.
00:09:32
Speaker
And then, you know, I thought I should, you know, get a little more and first 15 months, but as me, you get rotated different between different data companies. So it is almost like a mini consulting engagement. That was a lot of fun. And that led me thinking, yeah, we're going to be consulting. And then I applied to KPMG to become a consultant.
00:09:59
Speaker
Why KPMG? Because it does KPMG. So then I moved to KPMG. I again worked there for a year, year and a half. And the project had a lot of fun at KPMG. I learned a lot.
00:10:14
Speaker
He made some deep connections there to continue to be in touch. He was also from IIT Bombay and a Batchmate from Ammamdabad. He was with HUL actually. He was with Hindustan Lever. His name is Saurabh Gaur. And he was exploring some business ideas to start out.
00:10:38
Speaker
And then we got a chatting and it was like, what are you talking about? I was like, what are you talking about? What are you talking about? What are you talking about? And it so happened that we finally kind of got together. I was pretty happy in the place I was pretty happy in the place I was pretty happy in the place I was pretty happy in the place I was pretty happy in the place I was pretty happy in the place I was pretty happy in the place I was pretty happy in the place I was pretty happy in the place I was pretty happy in the place I was pretty happy in the place I was pretty happy in the place I was pretty happy in the place I was pretty happy in the place I was pretty happy in the place I was pretty happy in the place I was pretty happy in the place I was pretty happy in the place I was pretty happy in the place I was pretty happy in the place I was pretty happy in the place I was pretty happy in the place I was pretty happy in the place I was pretty happy in the place I was pretty happy in
00:11:08
Speaker
Then Saurabh and me were chatting and then Saurabh Kaik, Batchmade, Batchmade has a colleague at HUL, Sunil Rao. He also was interested. Then the three of us came together and there were a lot of business ideas which were thrown around.
Launching Four Fountains Spa
00:11:23
Speaker
What was the MBA style? What was the passion? What was the list of ideas? What was the purpose of it? Guess a short list. What criteria? What were you looking at?
00:11:37
Speaker
I think it's common to have similar brands in the consumer side. I don't know if you've seen this in India, but I've seen it in the past. And I've seen that brands have taken a task in the past. KPMG has made a lot of consumer engagement. So, there are a lot of criteria for consumer space. So, I think it's important to have a list of all of them. If you have a consumer space,
00:12:02
Speaker
Right. Then when we, and then we also looked at the West Key West. For example, Toys Big Drive. Toys Key Retailing. I was passionate about theater. I used to act and direct a little bit in college. Can we actually make theater commercial venture?
00:12:33
Speaker
So we looked at a couple of things. This was one of the filters we used.
00:12:56
Speaker
Because then, at space, we will not be able to come. So rather than a few, we, you know, kind of narrowed down to when the more we looked at spas, our connection kind of beauty wellness space could be interesting. Which was still there in a modified avatar. But clinic.
00:13:21
Speaker
And because Saurabh and Sunil don't know, HUL said that Thoda influenced Mahakabhisa. And hence, we said, can this be done with Western therapies? And we will also do Ayurveda, but we will not be in Ayurveda clinic. It will be a days path. And the more we spoke to consumers, the more we researched our conviction kind of grew on that. And eventually, 2007-08, four fountains passed, Pune said those interlaunches.
00:13:50
Speaker
And how did you find it? Okay, this means upfront investment. So then I was in Chennai during my KPMG days, one of my batch mates, he used to be the relationship manager at Kotak Mahindra. So he had all kinds of HNI's who he was in touch with. And I was, I can do an angel investment.
00:14:18
Speaker
He said, actually one of my clients is looking to make investments. I will tell you whether they are interested in evaluating this. So the gentleman who he was talking about was Mr. Krishna Ramanathan.
00:14:43
Speaker
And he introduced me to Krishna and I met Krishna. And the original business plan we had pitched to him was not for SPASBH. It was for something else. But it seems that they liked whatever interactions they had with me and Saurabh and Sunil. And when we finally said, we like you broadly. So we would like to think you guys will figure out who is the business builder.
00:15:11
Speaker
and we will invest some money. So we got a seed investment of let's say two crores odd in the first round. Eventually they kept supporting us further. And that's how we got funded and we could do the kibbutz for the first time. So you must have had to give up a very sizable chunk of ikutina. You get a little bit of valuations. Absolutely, absolutely.
00:15:38
Speaker
So it was not a negotiation, it was, this is the deal, right? While Krishna and his family was always very professional and fair to the extent, you know, but so that whatever the deal was and, you know, Capex savvy businesses may, you know, they're actually not very VC friendly to that extent, because leverage is not very, very high, unlike tech businesses and some of the other businesses.
00:16:05
Speaker
So, but we were happy with the, you know, deal which was there on the table. But like majority was still with you majority. So it was, I'll tell you the deal for two crores. I don't remember the exact numbers, but 20, 25% is what they had taken or 25, 26%. It was not a bad deal for first time entrepreneurs. It is a pretty good deal.
00:16:31
Speaker
So they were pretty fair about the entire thing. In fact, the first deal was structured by the IRR in Greek. But in Excel, we requested that the IRR be requested by the IRR. The price of the IRR was up front in Greek. So with these two corrodes, you started two spas in Pune. And why Pune? Why not Bombay?
Marketing Tactics and Growth Strategies
00:16:55
Speaker
Pune, because we thought the cost of experimentation in Pune was lower than in Bombay.
00:17:02
Speaker
And Pune, there were pockets which were like the South Bombay or the most posh parts of Bombay. So you go to a Koregama Park, which is as posh as it gets right in the country. You have the ultra H&Is and the cool crowd staying there. And you go to an Aund, which is affluent, but fairly traditional or used to be fairly traditional, you know, 15, 20 years back. So we said, we'll go to the affluent pockets, but we will try and serve different kinds of consumer segments.
00:17:31
Speaker
and see whether there is acceptance across segments. And Pune's real estate cost was lower. You know, marketing was cheaper. But we said Pune is the right place to do a value. And hence we went to Pune.
00:17:57
Speaker
So how did you get customers then? So that was the starting point. They were not good enough to even break you and forget profitability. If I'm not mistaken, I'm 599 inclusive of taxes for a full body massage charge.
00:18:27
Speaker
Which is like a 60-minute thing. For a 60-minute massage, yes. Right? So, I don't know if you've seen this before, but I've seen this line a lot. But this line is a theme that I've never seen before. I don't know why I said it. Because we said that the paper-mat dialing costs are the same. I don't know how to say it. I don't know how to say it, but it's the minimum. Typical MBA mindset.
00:18:53
Speaker
There was some traffic which was coming in, but clearly not what we had anticipated. Then we started doing everything which we could think of in terms of marketing. And the one activity which worked well in those days was couponing. So there were interesting looking coupons.
00:19:22
Speaker
It was one big customer acquisition channel.
00:19:51
Speaker
But it was a brand brand that convinced them. Thankfully they were open. So actually that was it was a lot of legwork. But they were excited. And they were excited because they were excited because they were excited because they were excited because they were excited because they were excited because they were excited because they were excited because they were excited because they were excited because they were excited because they were excited because they were excited because they were excited because they were excited because they were excited because they were excited because they were excited because they were excited because they were excited because they were excited
00:20:17
Speaker
We had created a good experience for the customers. Convincing did not take a lot of time. The local ecosystem of Pune, all the fine dined restaurants of Pune, they were very very supportive.
00:20:45
Speaker
So Pune met Corinne Park Lane 567. He came to find a restaurant. He was one of the most legendary restaurants called Great Punjab. Superb food and one gentleman called Mr. Khandi used to own that restaurant. So when Sunil used to go in many of these times, when Sunil went and spoke to him, he said, why don't you promote the restaurant?
00:21:13
Speaker
So a lot of people decided to support us for a variety of reasons. And that I think was a big channel for us. That also worked very good in the early days. Which is going through a newspaper insert.
00:21:55
Speaker
So, we designed a nice envelope in which we could invite people to invite us.
00:22:10
Speaker
This is a letter from Fort Fountain Spa. You know, spas are good for health. Apu massage kanese benefits for sakte. Please come and try us. And this we distributed like 30,000 such invitations across the catchments. Our team. So, you know, our marketing team, we had one or two people in the marketing team. We had hired one or two young people from symbiosis Kaviman Nagar campus. BBIK students, they graduate.
00:22:34
Speaker
Avinash Sharma was one of our first hires from there. And he actually got this entire activation going. And so many small experiments, some of which failed, some of which succeeded. And then our membership plans really started taking off. So the customer feedback was phenomenal.
00:23:05
Speaker
Some people felt it was expensive. Some people got busy with their lives. Some people thought it was an occasional thing. So we said, we designed it in an interesting manner. And then a sales process was developed on how to sell those packages. All of that finally kind of helped us get the traction.
00:23:32
Speaker
Finally, we started breaking even and then started making some money. I don't remember the exact, but I don't remember the exact, but I don't remember the exact, but I don't remember the exact, but I don't remember the exact, but I don't remember the exact, but I don't remember the exact, but I don't remember the exact, but I don't remember the exact, but I don't remember the exact, but I don't remember the exact, but I don't remember the exact, but I don't remember the exact, but I don't remember the exact, but I don't remember the exact, but I don't remember the exact, but I don't remember the exact, but I don't remember the exact, but I don't remember the exact, but I don't remember the exact, but I don't remember the exact, but I don't remember the exact, but I don't remember the exact, but I don't remember the exact, but I don't remember the exact, but I don't remember the exact,
00:23:56
Speaker
So and then like, you know, did you open more files? You're like, what next?
Leadership Transition and New Ventures
00:24:02
Speaker
but I don't
00:24:02
Speaker
Then poor functions went on to become one of the largest based by chains in the country. Currently there are around twenty seven, twenty eight spas, which operate on the. The COVID has been a little bit of a setback, but otherwise the spas did quite well. There is a lot of consumer love performance.
00:24:24
Speaker
We also started a chain of salons called Jazab Salons in Pune which we subsequently exited H&I in Pune. We started a chain of Ayurveda Clinics called New Ayurveda Clinics which also we exited to one of our ex-employees who wanted to buy out the entire brand. They continued to run it.
00:24:45
Speaker
Four fountains continues to operate in India. Just like Saurabh, Sunil and me in 2008, March 2008, three of us decided to kind of move out. And the team which had been built out, they managed the show now. So we were very fortunate that the senior leadership team was, nobody left.
00:25:07
Speaker
So even the team which operates the spas right now, one person has been there for eight, nine years, the other person has been there for 15 years. So the leadership team really stuck around, which is what allowed us to move out. What do you mean by that? Do you mean you sold your stake? Operationally we moved out, operationally we moved out and we were doing different things. So Sunil now runs a trading prop book with one of his friends.
00:25:34
Speaker
Saurabh built a very large business in the real estate domain called nobroker.com. And in 2019, I started building Pilgrim. And Saurabh and Sunil are angel investors at Pilgrim.
Pilgrim's Inception and D2C Strategy
00:25:48
Speaker
But what was the impetus to not be hands-on at four fountains? Well, did you feel that it was satisfying for you to be here?
00:26:03
Speaker
Yeah, I think, you know, so we just thought Orkuch opportunities. You said 2018. So, 2007 to 2018. Parasal, we ran this past. It had been a long time for all of us.
00:26:23
Speaker
What kind of revenue? 2018 we had built around 30 spas. Typically a spa would do annual revenues of let's say 80 lakhs to a crore. So network revenue does that, you know, many spas, most spas in fact were franchised out eventually. That was the leverage we created. But why didn't you like sell the business?
00:26:53
Speaker
When you don't want to be operationally involved, why not get an exit, get a big chunk of cash? I don't actually get thoughts. One, there were no obvious bias because if you are a player, typically a larger player will acquire you. We were not happy with the kind of conversations that were happening. Thankfully, the capital we had was patient capital because it was
00:27:19
Speaker
the three of us were not in a hurry. So we said, we will not be in a hurry to get an exit and the investors were supported. And hence we said, so the roles changed a little bit, but you know, I
00:27:45
Speaker
One of the key responsibilities which stayed with me throughout the journey was what we called as projects, which was basically expansion of the spas. So identifying which city to enter within the city, which attachment to enter, what real estate to go and acquire there, how much rent to pay, signing up of franchisees, explaining them the business model and explaining them how the entire business works.
00:28:16
Speaker
and ensuring that the interiors of the place is done and holding the team till the time go live of this power would happen. Once the go live would have happened, then the marketing and operations team would typically
00:28:36
Speaker
If you like to hear stories of founders, then we have tons of great stories from entrepreneurs who have built billion dollar businesses. Just search for the founder thesis podcast on any audio streaming app like Spotify, Ghana, Apple podcasts, and subscribe to the show.
00:28:57
Speaker
So you ran these experiments of the saloon and the Ayurveda clinic, which eventually you decided to exit. So what did you learn from those experiments? See, why we had entered those businesses was because we thought they were very complementary businesses. But we had a brand. We had four fountains, four fountains and Ayurveda clinic. Brand building is an expensive proposition and it takes time.
00:29:28
Speaker
So, we realized that we didn't have any brand expenses. We didn't have any thin brands. That kind of resources we had, we did not have because we never raised large amounts of capital. So, that is a challenge we faced. And we said, this is a profitable business, which is why there were people who were interested.
00:30:09
Speaker
So what was the idea behind starting Pilgrim?
Pilgrim's Unique Market Position
00:30:24
Speaker
So, if you see my entire journey of this 12-13 years, it was all in the beauty and wellness space. I spoke about projects that a couple of other responsibilities which I was handling, one of which was formulations and product sourcing.
00:30:39
Speaker
So, we were either in a salon business, we would buy products from brands. We also bought products from our skin care companies. But we also bought products from our in-house consumption. So, we bought oils, special scrubs, special products, body wraps, masks. We also bought products from our manufacturing partners. And we also bought a private cable. So, the four fountains were brand.
00:31:09
Speaker
And this, this responsibility was between the three of us, I used to handle it. So we would introduce a warm, red time warming oil massage. We would do an aloe vera mint massage. seasonal introductions. You know,
00:31:52
Speaker
How do you really engage with consumers to understand what are their needs? What is it that they are looking for?
00:32:07
Speaker
How would price change conversions? How would discounting change conversions? I think it's very interesting learning from you. So, I think the products of consumer brands are very fascinating to me. I think it's very important to start from the forefront. I think it's very important for consumer brands to be able to build their own brands. I think it's very important for consumer brands to be able to build their own brands. For consumer brands, beauty is very important. Because it's very important.
00:32:35
Speaker
Why would I go and sell fashion or apparel or jewelry or anything else? But much of beauty will be compared to other sectors. The second filter, the third filter for my name is online game children. D2C was a jargon I didn't know. When I met a few people in the ecosystem, they started saying, D2C, D2C, D2C.
00:33:11
Speaker
And we started working, and then when I was thinking through the proposition, D2C is the beauty of wellness, and consumers are the ones who offer care which is relevant to the consumers, which is not existing in the market today. And again, the MBA style, I like to think with a pen and paper.
00:33:39
Speaker
And I used to invite Sunil, my ex-co-founder, he was in Bombay. Swarabad moved to Bangalore because No Broker was based in Bombay. It was based in Bangalore. And Salonsklebi also had another partner called Konaar Gaur. Konaar is also from SPGN as Sunil and he used to head Jazap Salons. And then he comes from a hardcore FMCG kind of experience and background. So, Sunil, Konaar Gaur is a very good person.
00:34:15
Speaker
And then we started noting down a lot of things. And obviously we were then taking those propositions to consumers, doing primary and secondary research. So one, couple of things which were fairly obvious in the market was
00:34:39
Speaker
This is very different from the age bracket to which all three of us, Sunil, Konaar, can be belong. All three of us are 14 plus. And we were trying to think about the Malaysian consumer, right? So, Hamare generation, if you see Bakshay, wanderlust was not a thing. In fact, we were discussing Abni Bolaar Mira Dopela International Trip 38 kg.
00:35:02
Speaker
We have seen a lot of international trips in the last 20 years of post-college whatever travel I have done. But you talked to a typical 25-28 year old today. It is not about the money. They are not looking for luxury. They are looking for experiences. This wanting to experience the world culturally
00:35:32
Speaker
You know, to travel was a clearly big thing which was happening. This was a very big trait. The second is, you know, wanting to follow their passion. Yeah, passion, what time say children follow your passion, but actually, a lot of people have not done that. A lot of the choices have been driven by what value systems were inculcated either by family, society, education system, all of that.
00:36:02
Speaker
But the new generation is actually, you know, doing things where they think they'll be happier. And money is not the primary motivator for many of them. I'm not trying to generalize everybody's different. But they're actually trying to think through their life. The third thing which is very different about this generation is they are very, very sensitive about what is happening around them. They have an opinion, and they are going to step their opinion. They're not going to shy away from a politically correct technique.
00:36:34
Speaker
And they genuinely care about the environment. I am willing to pay more to a brand which will do the right things for the society and for the environment. And that's the kind of consumer needs which we clearly saw for emerging. When we saw this, we said, we have to build an offering.
00:37:01
Speaker
One, as a brand, because the brand and the category, while they are very closely integrated, but the brand has to go, you know, to my mind, the brand has to be larger than the category the brand belongs. We said, if you have to talk and engage with a consumer like this, who wants an orderless experience? That's the word which stuck with us. Then we said, it is a beauty. Beauty may be a phenomenon, actually, already horada.
00:37:30
Speaker
So, you know, India was going global. There are other countries, other traditions, which are also going global. Korean beauty was already a hot thing in Korea, in India and globally. Korean beauty is very beautiful. Incidentally, Japanese beauty is very popular. This fits in well with the needs of the Indian consumers.
00:38:00
Speaker
or rather the millennial consumers, I don't think India and global consumers have a difference right here. People want to experience, you know, global cultures at their doorstep. And this is happening in beauty. And Korean beauty brands, Japanese beauty brands are also available in India. The challenge they face is their pricing is not India friendly. Because when custom duties are made, when brand overheads are made,
00:38:28
Speaker
They also need to maintain a price parity across geographies. So, these US dollars, West may, Japan may share the, Japan may not share it. 20 US dollars in Japan has a very different meaning compared to what 20 US dollars in India mean. So, we said, can we and the brands are often not relevant because many of these brands are legacy brands. Legacy brands and D2C brands are also different. Legacy brands are used to having a monologue.
00:38:59
Speaker
D2's and friends are the reverse. And we will co-create with you. And we will come and tell you, let us correct that mistake. It is not about shying away from your flaws and faults or errors.
00:39:20
Speaker
It is accepting that as a part of your life. In fact, in Japan, there is this beautiful philosophy. I forget the name of that philosophy. There are broken ceramic glasses, golds, and filters. These are the flaws of your life and enhance the gold. So accepting your flaws. So we such this kind of a mindset, if you have to engage with,
00:39:47
Speaker
How do we bring this to life? So we said we will be a happy skincare brand. We will never tell you that you are not good enough. A lot of beauty brands in the past have done that. You are not good enough and you use my brand to become better. Our approach is a little different. We are saying you are already complete. You are already happy. And we would like to offer you different experiences to help you explore the world. And why skincare?
00:40:13
Speaker
So, actually, the beauty part is skin care, hair care, bath and body. We do all three, for all three. Does that, it so happened that, you know, consumers started liking our skin care products more than hair and bath and body. And hence, the skin pores has become much larger before we had, so this was not like a planned skin care made palette deep. We actually launched all three in the beginning.
00:40:37
Speaker
And we have done some very, very good work in terms of the product innovations. But probably, you know, the market for bath and body is not as evolved in India. Because skin care could be a little more basic functionality driven.
00:41:06
Speaker
So, we got a good response on hair care, we got a very good response on skin care and skin care means innovation and opportunities. And hence our skin care portfolio became pretty large very soon. And the second range, first range which we launched was on this quote unquote, you know, hot trend of Korean beauty. So we launched a range called Secrets of Jeju.
00:41:28
Speaker
which is a island in Korea. The origins of Jeju islands is volcanic in nature. So, a lot of very interesting ingredients come out from that ecosystem. Volcanic lavash, white lotus, camellia, very interesting ingredients come out from that. The second tradition which we launched 6-8 months back is a tradition called Venotherapy. Venotherapy is based on red wine. This is a French, right? Red wine, Bolognese, you would have understood it's a French tradition.
00:41:57
Speaker
That's the second tradition we have launched. We will be launching a third tradition sometime around Diwali.
Pilgrim Code and Ethical Standards
00:42:03
Speaker
So every few months, we will be launching a new tradition offering waterless experiences, native waterless experiences to our consumers. That's the core part. There's also something called pilgrim code we follow.
00:42:20
Speaker
consists of, you know, six, five, six different values. Some of the key values are we are a clean beauty brand, which means that we don't use any toxic ingredients. Traditionally, a lot of ingredients have been used by beauty brands, which are not good for hair and skin, but does feel sensorial are good. Texture. Yeah. We have stayed away from that. We have identified 20. There are many more, but, um,
00:42:51
Speaker
To encapsulate our learning around this, we formulated something called toxic 20. And we mentioned it on our website here, yeh 20 ingredients some kabibi kisibi product we use. We are a cruelty free brand. So we don't test anything on animals. Very soon we are going to be PETA certified, the process is almost complete. We are also a vegan brand.
00:43:31
Speaker
And for some of the products, it has been a challenge to formulate without them.
00:43:42
Speaker
Let's say Ayurveda products are made by a method called Sheer Pak. Sheer is milk. Pak is boiling. Pak is Pakana. So you actually boil ingredients in milk to get the Sattva of the ingredients out. Now, how do you modify that Ayurveda process?
00:44:12
Speaker
So whenever we want to launch a range of Ayurveda products, we will have to modify that process to make it vegan. So whether we end up using soy milk or almond milk, those are, you know, some experiments which are going on. Some of these challenges were not known when we had entered here. But that's the fun part. So tell me about the entry journey.
00:44:38
Speaker
globally, like a global experiences, kind of a theme is what you want to do around beauty products, you know, like that go to market journey.
Founding Partnership with Gagan
00:44:51
Speaker
So when I started thinking about pilgrim, I was the only one. I was looking for a co founder. And I had spread the word around to some close friends, etc. It is clear that your co founder has to come from a very strong reference. Somebody who
00:45:09
Speaker
I trusted, has to vouch for that other person. That's the clear benchmark I had. So then, one of the people I got introduced was Gagan, you know, Gagan also is from IIT Bombay 2013 match. And he came to a very, you know, close friend's reference, Pritesh Mittalul, that's a tech company called Broisto. And Pritesh and Gagan are matchments at IIT.
00:45:36
Speaker
So Pridesh, Kolkya and Mujithna, I think you will... I think he said something similar. Then Gagan and me got getting. And the first call, I think both of us were broadly decided. We didn't just probably commit to each other, but we had broadly made up our minds.
00:46:05
Speaker
And the second time I was working out of a co-work in Andheria and Gagan came to visit Manigodari. So Gagan came over, we had a coffee and we actually committed to each other in two discussions. Normally I would put down pros, cons, map, etc. I write down a lot of things. Gagan is a lot more intuitive than I am.
00:46:32
Speaker
I would typically make an exit fee for everything. So, this was natural, but for me, this decision was very intuitive. Otherwise, many other times, I would normally do the pros and cons of the framework.
00:47:02
Speaker
How do you decide how to negotiate? So, you know, our equity discussion was actually, I think, three minutes or two minutes. So, you know, what you are saying, I think Agann was also aware about that, right? And I come from the sector and I have a little more experience than what he would have.
00:47:24
Speaker
So, what is your expectation? And he quoted a range. He said, let's say X to Y. X being the lower number, Y being the higher number. But he was very fair in the range, right? So, the number, he was actually in that range. So, I am comfortable with Y. In fact, Y is 10% because that's the number I had in mind. So, he said X to Y and I said 1.1 of Y.
00:47:52
Speaker
So for a moment, he was taken aback. And then he said, obviously, I'm not going to do this. Because I said, I'm not going to do this. And both of us should be comfortable with the equity split, which we are having. And that was the only time the equity discussion happened within Gagandhvi. But Gagandhvi said one thing very clearly, that equity is a discussion, and obviously, the split is not equal. But after this discussion gets over, here equals.
00:48:23
Speaker
So we should have equal say in the company, whatever we are doing. I respect the fact, there are a few things you will know more than me just because you've been around in the sector. But beyond that, we should both have an equal say in whatever we are trying to do. And I respected that. I told him, I'm not looking for a senior employee to come and join the team. I'm looking for a co-founder who can really come and build. By the way, it was only a concept.
00:48:52
Speaker
I said, both of us have to support each other in whatever we are thinking through. And then Kagan was coming out of his previous engagement and he said,
00:49:28
Speaker
I mean, spend some time with the family and come back. And then we did some work together, all of that. But I think that partnership for both Gagan and me has worked out quite well. And while there is some split of responsibilities, etc., I think contribute in every function, both of us contribute.
00:49:53
Speaker
When the two of us were there, then we started to slowly build out the team and a couple of other people joined. Did you raise funds like before? So we raised some angel money.
Seed Funding and Network Leverage
00:50:03
Speaker
We raised some angel money. So I had sent out a couple of WhatsApp messages to some friends, people who I wanted to be part of children and a couple of people who had told me her next life. So people from different parts of my life, right?
00:50:23
Speaker
Patchmates from IIT Bombay. Patchmates and downmates from IAM Ahmedabad. My colleagues from TASS. Both my co-founders, Aurabh and Sunil. So Aurabh's co-founder at No Broker. Both of them. You know, I was a director at Richfield, so the founders of Richfield. You know, vendors and business partners of Richfield. People from my building. So I'm going to take a part of your life when they are one of the Agile investors in active.
00:50:54
Speaker
We have a large capital of 20-21 angel investors. All of them have contributed in some way or the other at different point of view. While we did not raise so much money, we did not raise so much money in general. But we said we do not do a formal fund raise. Friends and family link it.
00:51:16
Speaker
Everything happened on WhatsApp, when I put messages based on the original, I don't have a Facebook account. But WhatsApp, I don't have a Facebook account. So that happened and you know, we were a team of five, six people, including again in me, there were seven people.
00:51:44
Speaker
We started building out and our R&D and products and all of that was broadly ready by March 2020. So we had to come up with a set of products and then Modiji came on the television and said, we are going to do better. So where was the lockdown?
00:52:09
Speaker
Only online. The plan was clearly online. And it had so happened that Saurabh had met Vinay who is the partner at Fireside.
00:52:30
Speaker
Sometime in Jan 2020 and he spoke about his angel investment at pilgrim and then when I said and we spoke in Jan 2020 and when you know fireside has some internal documents around go to market D2C playbook all of that I Knew that these documents existed, but I didn't have access to them
00:53:02
Speaker
So my first call with Vinay, I told him we are here documents and those documents are meant for the portfolio companies. But will you share those documents with us? I don't know what Vinay thought, either I embarrassed him so much by asking, making this ask, or he was just being nice. So there is a set of 10-16 documents which documented
00:53:31
Speaker
a lot of learnings from fireside came to us before the launch. So, the kind of support we have received for building from every corner, right, and the fireside support, but otherwise, if I start counting the kind of help we have received from at least 30 people or 50 people, it is just mind boggling.
00:54:02
Speaker
So the kind of access to data and learnings they have, nobody else has. This was not so much on the marketplaces. This was more on the brand website.
00:54:15
Speaker
I spoke about Vinay making the first call in Jan 2020. Then every single month Vinay and me would speak. And I was very happy to engage because the kind of learnings Vinay and Fireside had was phenomenal.
00:54:39
Speaker
And he was never, you know, talking kind of stuff he would never say. He would talk about very, very specific. He will say, you know, have you spoken to this winner? What is your CTR? So the kind of stuff which normally investors would not talk about.
00:55:06
Speaker
We talk about metrics, what are the CPMs? Are you seeing Facebook's CPMs go up, go down? Are we sponsored granddads, marketplaces, and are you doing something there? Some kind of stuff which will impact my life that day. That's the kind of inputs we receive from them. Then sometime in October, November, you know, and
00:55:30
Speaker
Then he had started saying here, we will be interested in evaluating, we like you, but there is a very formal process which fireside will learn if you want to raise money from fireside. And last year, 2020, October, November, even of a certain scale, he said here, I think the time is right for you to raise a pre-series A, specifically if you want to work with fireside. Because if you become a little too large,
00:55:57
Speaker
then we will not be able to come because there is a certain kind of deal size, etc. we want to look at. And we were very keen that we wanted to have fireside on our side of the table. So have you done subsequent fundraise after that in general?
Scaling with Venture Capital
00:56:11
Speaker
So we actually initiated the process of fundraise, because we don't know what comes out of this process. So we will speak to other friends.
00:56:26
Speaker
So we, we spoke to, you know, everybody who was interested in the consumer space. And, you know, by Jan Feb 2021 December, I think, I think early Jan is when we started pitching. We had quite a few, you know, investors who were interested. At the moment fireside confirmed. We said, you know, our deal is done. We are not going anywhere else.
00:56:57
Speaker
And then there was some little bit of negotiation with them because market was willing to give a much higher valuation, they were not. But we said, lower valuation, because we want fireside to be a part of our capital. That happened. And then there is this very... How much did you raise? We raised close to 12.8 crores. Rookam Capital also participated in our banner there. We also had a couple of Indian investors. So some of our existing Indian investors also talked up.
00:57:28
Speaker
And the founders of both, Aman and Samir, they participated. Prabhkiran was the founder of Devcoof. He participated in their personal capacity. And again, you know, the philosophy was the same. If good people are interested in investing in pilgrim, we want them. There's so much to learn from each of these founders. It is not the money which they were bringing to the table. It is that access to ideas, brainstorming,
00:57:57
Speaker
And one more person thinking about pilgrim at some point of time during the day, during the month. So, which is why we said we will try and get a few more angels also onboard. And so this 12.8 odd crows kind of, 30 crows kind of fundraising happened. And then there was this very long and strenuous period of what is called as due diligence, which I was not ready for because I thought key Hamare accounts were in a good shape.
00:58:23
Speaker
And they actually were. That's the comment we received. But the process can be fairly taxing if you have not done it in the past. So that journey we had to kind of undertake. That happened. And it's been, I think, a phenomenal journey from there on. We had a team of seven people in March.
00:58:53
Speaker
including me and Gagal. Now we are close to 30 people. When did the revenue start? Like Marjmi, you were ready to launch. When did you launch and how did you launch? In May 2020, there was a long-term lockdown. We started launching and we started selling on the marketplaces.
Navigating COVID-19 and Growth
00:59:11
Speaker
The launch actually wasn't there. It wasn't there. It wasn't there. It wasn't there. It wasn't there. It wasn't there.
00:59:20
Speaker
The marketplaces were already ready for the listing, but we didn't know anything about it. So we had to wait for it. May 2020, if you remember the uncertainty, nobody knew what was next. No, no. Rules were not clear. Good statement, good rules. Every day, every week something new was happening. We had to wait for it. We had to wait for it. We had to wait for it. We had to wait for it.
00:59:48
Speaker
Which is when, so we never had an official launch. The first time we did like a launch activity was when we launched the second range. The Vino range. So, but sales case you, you must have spent on advertising. And I think our sec on D2C overall benefited from the scenario last year.
01:00:16
Speaker
While as a country and as an economy, we have had a lot of setbacks. D2C is a benefit. Within D2C, skincare hair care is a benefit. Within D2C also, beauty may be a beauty in color cosmetics. So probably there was some slowdown there. Because people were not stepping out as much, I may not know the exact numbers, but it did not probably see the kind of uptake which hair care skin care saw.
01:00:45
Speaker
who support the growth in the early days. By end of 2020, what kind of monthly run rate were you doing? Like December, Jan? So end of 2020 by calendar year. Calendar year, I think we were at 70, 80 lakhs gross sales a month. Amazing. So like in just six months, you were like nearing once a year kind of. We were there and again, you know,
01:01:15
Speaker
I keep telling you the kind of help we have received from so many people. So one of my batch mates and friends from IIT Bombay, who happens to be staying in the same building, his name is Saket Dankar. He also runs a D2C brand called Hawes & Kinder. And he's been retailing and selling for one or two years more than we have been. So he had really learned how to sell on marketplaces.
01:01:40
Speaker
I think those learnings, those 1-2 years of learnings were available in our 1-hour crash course with Saket. And they did not stop there. Every week, every month, he would keep calling on his own and asking, how can I help you?
01:02:06
Speaker
So the kind of help Saket gave us is like consultant for Amazon. The only thing he gets in return is some free pilgrim products.
01:02:33
Speaker
And as a her domain, so if I have to go on, you know, the kind of help. So this, you know, pilgrim, while the team is in a lot of efforts, the kind of help you receive from external stake, external people who had no stake in the company. And what is your current monthly credit? So now, August, we are, you know, 1.7, 1.8 crores of gross sales. Amazing. Okay. The aspiration is that another six months to be, you know,
01:03:02
Speaker
is four to five crores kind of gross sales monthly run rate. In D2C, typically we'll see people don't talk annual run rates. People talk monthly run rates annualized because the numbers for most people are changing so fast. Yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes
01:03:32
Speaker
Yeah, so sometime next calendar year if you are able to hit that, that's our team's aspiration in terms of run rate, right, not in terms of actual 100 crore for the year. So, 100 crores is basically, monthly, monthly we annualize 8-9 crores a month kind of 100 gross sales, I think our aspiration is sometime in the next calendar year.
01:03:53
Speaker
So why do you think it is selling so well? I think it is the different ingredients which go in the secret sauce. It is not one secret ingredient in the secret sauce.
01:04:05
Speaker
So marketing is a four-piece product price? Actually, a four-piece, to sound very cliche, all four-piece are important. And then people have, you know, the marketing gurus have kept on adding a fifth P and a sixth P and a seventh P. One is, you have to understand consumer needs very closely.
01:04:28
Speaker
That is the starting point and I'm going to sound like, you know, hopefully sound like an intelligent professor. But honestly, that's the right answer to my mind. If you need to understand consumers very closely, then your offering has to resonate whatever you have identified as a consumer need, your product and brand offering has to then cater to that need.
01:04:52
Speaker
The need you have identified may not be the real need or may not be large enough. And it is a little bit of a matter of luck. It is not only about intelligence and experience. So to say, next time I go and look for a consumer insight, I will go and hit on a large idea again. There is no guarantee. So luck has played a lot of role in many of the things we have done.
01:05:18
Speaker
So be able to identify the insight on which pilgrim is being built. I think that was a lucky break for us. Then I think what helped was the experience in the sector where we understood formulations slightly better than many other players in the market. That was a clear, you know, unfair advantage. I think as a business, if you have some unfair advantages, which others don't have, it just helps the business.
01:05:47
Speaker
So, this was one of the unfair advantages that we understood formulations, which is the core of the product really. We also understood sensorials, having run spas, salons, you know, we understood what customers look, feel, texture, fragrances, and we made mistakes. It's not that we got everything right, but we have hopefully learned quickly from our mistakes and, you know, corrected it. Third is the packaging.
01:06:14
Speaker
So you will see I'm talking about the four piece. But because we are selling online, the consumer only going to experience the brand through the imagery which you create online. There are two things to the imagery. One is the actual quality of the packaging. And second is then how do you demonstrate the packaging through other imagery supporting imagery.
01:06:43
Speaker
That imagery is what is going to establish trust for a consumer to try you out. Then go to market or, you know, understanding of how channels work. So the way an Amazon works is very different from the way a Nica works and the way a Flipkart works versus the way a D2C works. So understanding of how these channels work is very important. And to be able to deliver all of these a team which is saying
01:07:14
Speaker
We had a very lean team of seven people, including me and Gagan, but the team saying, I'm not going to worry about anything, but doing what is right for the consumers and what is right for the brand. We also spent a fair bit of resources even early on in taking professional help. Their help was needed. Okay. Like what areas? Like the brand name.
01:07:44
Speaker
We were both not happy with the names we were coming up with. And we spent a fair bit of time doing that. And we said, here we are. And we took the help of a consultant who specializes in brand and we love her and the kind of work she has done and contributed to the program. She is the one.
01:08:07
Speaker
took us through the thought process of how a brand name should be coined. And out of the many options, pilgrim was one of them. And there were other names which we had liked. She is the one who wrote the tagline, joined the journey. He helped us refine the brand proposition slightly better.
01:08:35
Speaker
So our packaging was developed by a boutique agency based out of Argentina. So many of these investments we did upfront. We said here we will not try to save money, whatever is required we will do. And your manufacturing, warehousing, logistics was all outsourced and none of that was in us.
01:09:05
Speaker
All of that was outsourced. And again, a lot of support and help came from other people. And people who would normally not do certain MOQs decided to do those MOQs for us. What is MOQ?
01:09:21
Speaker
Sorry, again industry jargon. M.O.Q is a minimum order quantity. When you go for production of anything, when you go for production of anything, when you go for production of anything, when you go for production of anything, when you go for production of anything, when you go for production of anything, when you go for production of anything, when you go for production of anything, when you go for production of anything, when you go for production of anything, when you go for production of anything,
01:09:43
Speaker
I think when you are a new brand, you don't want to be investing too much in every SKU. So, I think we will have support from the entire partner ecosystem. And we have kept our promise there.
01:10:05
Speaker
So Abhi, you know, after 0 to 1 journey complete, what do you think will be the challenges that you will need to navigate? One is, you know, continuously innovating on the product and the brand front. This calendar year itself, between now and March,
01:10:34
Speaker
We will be launching at least three to four new traditions. What all are they? They are from different parts of the world, and allow me a little bit of time to get off. So they will allocate time to the next tradition. So, Abhi, how do you think you are going to do this?
Innovative Product Strategies
01:11:00
Speaker
Because every country has that tradition, right? Because every country has that tradition, right? Because every country has that tradition, right?
01:11:21
Speaker
Even Ayurveda is actually very different from the Ayurveda which is practiced in Maharashtra. It's very different from Ayurveda. Actually, it's very different from the other Ayurveda. Ayurveda is very different from the other Ayurveda. It's very different from the other Ayurveda. It's very different from the other Ayurveda. It's very different from the other Ayurveda. It's very different from the other Ayurveda. It's very different from the other Ayurveda. It's very different from the other Ayurveda. It's very different from the other Ayurveda. It's very different from the other Ayurveda.
01:11:53
Speaker
So being able to continuously innovate and stay relevant for the consumers. Finally, consumers are going to decide, you know, how far silicon goes. So that is the key, you know, I think, task to be achieved.
01:12:14
Speaker
And to be able to do that, the team which we have now close to 30 people and growing, I think another month or so, we might be 35 people and then 40 people. So to be, to keep the team engaged and, you know, maintain the culture which we have so far, that is, that is, I think, an important thing to address. I think it's important for us personally to have time spent.
01:12:43
Speaker
Now, that will happen to a lesser frequency for a lot of people. In a way, what you are doing is fast fashion for beauty. You know, winter collection, fall collection, summer collection. You are doing something like that for beauty.
01:13:03
Speaker
But I think we are right. What we are doing is fashion. Fast fashion, maybe it's a concept to store delivery, which is what probably Zara does. We are not doing fast fashion, but we are. Yes, we are doing fashion. We will continuously innovate and stay relevant for our consumers. Are they lifetime? Like the Korean launch time, is it lifetime or will it
01:13:29
Speaker
Hey, you know, limited production and then move on to next. At some point of time, we might do limited editions also. Right now, if you launch a tradition, then it's like launched for life, basically. And let's say they're not there or something like that. See, what happens is that consumer needs are actually very niche and very specific. Akshayan and Urag are on this call. We could both be, you know,
01:13:57
Speaker
Demographics, 40-year-old plus, minus, male, professional, MBA types, earning a certain kind of income, certain kind of skincare habits. But that is very broad. Akshay could be worried. He could be worried.
01:14:25
Speaker
You wear in a hair what dry Oreo enters me. And I have fine hair. But say somebody has thick horse hair and hair dry Oreo. So the consumer needs are very, very specific. The opportunity D2C offers is to be able to serve very niche audiences. So legacy brands are long tail. So we are long tail by nature.
01:14:56
Speaker
Unlike legacy brand, because one can pass the large opportunity of distribution cases support. I mean, those centralized warehousing, you see SKU to be bigger, but they're very relevant for those 50 consumers in a month. We can do that, you know, batch at a certain scale. Wow. Okay. So which is fairly, uh,
01:15:22
Speaker
disruptive, unique, different from what all other brands have followed. If you look at, say, Mama Health, which is another D2C brand which has really scaled up, the SKUs were fairly limited. It's only like in the last one year where they have increased SKUs. What makes you so confident that this large SKU strategy will pay off?
01:15:52
Speaker
Time will tell us actually. That is the honest answer. This is what we are building on. Whether this is the right strategy or not, time will tell us, God will tell us. We will do what is right by our consumers. Here fundamental belief is if we do the right things for the consumers, consumers will reward us sooner or later.
01:16:14
Speaker
Our consumer understanding suggests that people are looking for borderless experiences, people are looking for products, people are looking for clean beauty, people are looking for vegan brands, people are looking for, you know, toxic 23 products. All of those checkboxes we have met as a brand. And people are saying Merijo specific consumer, Merijo specific skincare, hair care native.
01:16:41
Speaker
So far, the feedback has been positive. I can only say that. Even today at a scale which is not very large, you know, from a larger industry perspective, we have 35 SKUs. So for a young brand who have 35 SKUs is, I mean, it's larger than what we, yeah, it's not something which all brands will do. And some of them don't sell too much. But we are okay.
01:17:19
Speaker
So it's my ability to produce and you know apply the supply chain strength and that is making this possible because you already know you know creating that product with small quantities is something which you are able to manage with
01:17:38
Speaker
probably an outsider like say the mama founders were not from that space. So in terms of, I will not, you know, mama has done a phenomenal job in building and I have great respect for both the founders. So, you know, comparison is not fair. We are too young, too small compared to mama. I think, you know, I think it's about the intent. So if a brand wants to do what we are doing, a brand can do.
01:18:08
Speaker
It will take time. The advantage we have had is, but if another brand wants to do this playbook, can they do it? I think, can you do it right?
01:18:33
Speaker
With less burn possible, I don't know what is going to happen here. There are so many people who have contributed to Pilgrim, directly and indirectly, that to not acknowledge them would be a crime. What is your core customer demographic?
Customer Base and Sales Channels
01:18:56
Speaker
Very interestingly, when we started, we actually researched the millennials.
01:19:03
Speaker
And I will now quote a number which you can interpret both ways. So millennial audiences typically this 20 to 35 year old, right? 60% of our sales comes from millennials. 40% of our sales comes from the above the age group of 35.
01:19:31
Speaker
So the insight of people wanting borderless experiences, it is a lot more predominant in the millennials, but is it completely missing in the older audience? No. It is there. It may be to a lower extent. And this need is not getting met across age groups, which is where, you know, I think we are getting a fair bit of traction from the slightly older age group also.
01:19:57
Speaker
The other interesting fact is 65-70% of our sales comes from tier 1, tier 2, tier 3 towns, which is basically non-metros. Or only 20% of our sales comes from metros. Okay, which is amazing. Which we are very happy about. Which we are very happy about. So we are in the 300-700 price point across SKUs.
01:20:22
Speaker
how the how the market looks at this price point is this is called a mass premium kind of a price point. So, usually you know the FMCG brands the mass market brands who have a wide range of distribution the MNC they will typically operate between 20 30 to 150 200 rupee kind of price point and the FMCG premium brands will typically
01:20:47
Speaker
I think that architecture, to give one example, may or may not be the correct benchmark. So, there is a chance that FMC premium brands operate there. D2C brands, many of them operate in this 300 to 700, 800 kind of price point. But it may be that certain brands for a specific SQ are at the 300 rupee price point. Certain brands are at a 450 rupee price point. So, let's say if you're talking about a face wash.
01:21:17
Speaker
This is a price band, but 300 rupees or 450 rupees is 50% price difference. So this price band may be a pricing place possible for brands. And then the premium brands will typically operate in the 700 to 150 rupees price band. And luxury brands will operate, and this is only purely a price segmentation, no other filter rate.
01:21:43
Speaker
and 1500 cupers, 2000 cupers, luxury brands, single products. So those are. Yeah. You're typically important. So you are like, as compared to other DTC brands, you're like similarly priced. We are one notch higher in many SKUs. Sometimes we are. So either we are at R or one notch higher. We are typically not lower than the other DTC.
01:22:12
Speaker
And your sales are still driven by performance marketing? Part of it is performance marketing, but a fair bit of our sales happens through what is called the brand experience.
01:22:26
Speaker
Like repeat purchase. Repeat is one. The second is we do a lot of engagements with influencers. That is an important part of the channel. You know, media mix. We work mostly with bloggers, YouTubers to try and engage them in a conversation and try and get their feedback. All of that has also helped.
01:22:46
Speaker
But the one data point, see we don't know what kind of sales are happening on a marketplace only through our brand search, but ad or a panel so you get an indication, so it's a proxy. Our sense is this is not an exact data point, 40 to 50% of our sales happens from branded search terms.
01:23:09
Speaker
Like someone searching for pilgrim instead of searching for cream. That's right. So either pilgrim or pilgrim face cream or pilgrim, you know, therapy cream, that kind of a pilgrim body. We don't have exact data points, but our evidence is suggesting it is 40 to 50% which we are very happy with. We would want this number to be higher, but this, this indicates the strength of the brand brand.
01:23:35
Speaker
And what is your split, you know, how much through your own website, how much through e-commerce marketplaces? So currently, you know, our website contributes around 25% of the revenues. Aspiration is to take it up to 30, 35%. And the other 75% comes from where Nike, Amazon, Flipkart, a very important channel partner. We're now going to be available on Flipkart and also, so far, we were not. But Amazon must be the largest, no?
01:24:04
Speaker
Naika and Amazon both are neck to neck. And you plan to like go for offline distribution? Not in the near future. Eventually, yes. Because like we spoke about the brand, the brand is about borderless audiences and not
01:24:23
Speaker
just about borderless beauty experience. It's beyond beauty, right? So we want to offer offline experiences for our consumers. Even before we go offline, we will start maybe doing offline events, right? Events possibly, given the environment, but probably three months, six months, whenever the conditions allow us. What kind of events? Do you mean events or do you mean like the activation in malls where people try the product?
01:24:49
Speaker
For example, if we are launching a French range, why can't we do a French cuisine tasting instead of French product sampling? How do we bring France alive to people in India? That's what the brand is about. Can we do a movie festival, which is international cinema? I don't know what the manifestation would be eventually.
01:25:18
Speaker
The approach of tradition-wise is a lot like how these smartphone companies have launches, like iPhone 10 launch, iPhone 11 launch, and people wait for the launch, and each launch is in itself a big event. In a way, Aapkaibi went to the cycle, eventually, where there are people waiting for the next launch, and each launch is a big event.
01:25:46
Speaker
YouTube is full of reviews of the product and yes, there will be smartphones basically. But yes, we will be very happy when that starts happening. It has started happening in a very small manner right now. But I think yes, that's where we want to be where people really, because it will want to be, you know, what the brand is doing. It is what the consumers wanted the brand to do.
01:26:14
Speaker
So my last question to you, what advice would you give to young B-school passouts who are full of naive ideas? What advice would you like to give them?
01:26:39
Speaker
And I will not call it advice, but I will call it my life experiences and some people may find it relevant. So one of the key learnings I've had is glamour of a sector or a business does not equal to large business opportunity and definitely not equal to profitability. So don't get swayed by what's hot today.
01:27:03
Speaker
You know, you look at a hotel industry, airline industry, and I'm not talking COVID, right? They've always been glamorous, but very, very difficult businesses to make profit. And year startups, I'm taking an example, which is slightly more corporate. So go by where you have an unfair advantage. Where can you win? If, if you identify your unfair advantage, you are, you have a right to win in some
01:27:37
Speaker
So that's what is helping us scale so far. The second is, you know, it's a marathon. It's not a sprint. But what does this translate into? Life, life, business is going to be a marathon. So the first thing is training. Right.
01:28:00
Speaker
And the training can happen in several ways now with online opening in so many ways. If you are the kinds of fight mark information, then YouTube is your go to place. If you are the kinds who like structured information to be presented, to be able to learn, pick up books, pick up courses, but even the most niche topics you want to learn, I think there is training available.
01:28:27
Speaker
The second and a little ignored aspect of life and business is, so I heard Zig Ziglar gave a very good example, which resonated with me. He said, yeah, you know, I'm a horse-winning horse. So, you know, I'm a horse-winning horse, but if I'm a horse-winning horse, I'm a horse-winning horse.
01:29:16
Speaker
If you are in the melatonin, it gets missed out and I did that mistake for a very long period of time. I am still a foodie. I love my junk food, but I balance it out.
01:29:27
Speaker
till the age of 35, I was living on junk food, after 35 and with time more and more, I'm balancing the good food with the junk food. The third part is to be well rested. So, you know, being able to go to work with a fresh mind, just longing it out can sometimes fatigue you, kill innovation, kill creativity,
01:29:56
Speaker
And one of the things which I have learned time, which has really helped me is meditation. I learned how to meditate in 1998. It's been now close to 14 odd years. Almost every single day of my life, I spend between 30 to 60 minutes meditating. It's been come with, I was in 30 minutes. I think that has really, really helped me. The one last thought I want to leave is, delete your social media accounts if you can.
01:30:26
Speaker
How do you feel about your Instagram account? I actually have an Instagram account because I need to see how Instagram behaves. But I have no friends added there. Nobody knows their black wall image. Nobody will ever follow me. I've never posted anything. It's like a dummy account.
01:30:51
Speaker
You might get some followers now. You can't find me. You go and search for LinkedIn. Because I get a lot of relevant business connection.
01:31:18
Speaker
Deleting is going to be a challenge. At least be very conscious of how much time you set aside a time. You decide how much you can afford to spend on social. So that was Anurag Khadia telling us all about his journey of building Pilgrim. If you'd like to know more about this wonderful venture, do log on to discoverpilgrim.com
01:31:45
Speaker
This episode of Founder Thesis Podcast is brought to you by Long Haul Ventures. Long Haul Ventures is the long haul partner for founders and startups that are building for the long haul. More about them is at www.longhaulventures.com.