Mensa Brands CEO is considering sharing the technology with other D2C brands

Mensa Brands is considering sharing its proprietary e-commerce advertising and pricing technology with other direct-to-consumer (D2C) brands, said its CEO and founder Ananth Narayanan.

“It could be (a SaaS product),” he said, adding: “In fact, one of the things we are looking at is making all of our products available to all digital brands. There is a developed Shopify ecosystem, but there is no developed marketplace ecosystem. No one really knows how to properly hack the market.

I’m talking at “Your Story”At the flagship technology summit TechSparks 2024 held in Bengaluru on Saturday, Narayanan explained the challenges facing brands in the highly competitive e-commerce landscape.

“In the online world, when you use your mobile phone, once you open the Amazon, Flipkart or Myntra app, it only takes six swipes on your mobile phone,” he said. “After the first six swipes, it’s very difficult (to sell). The cost of those six swipes continues to increase (for brands).”

Narayanan believes that the key to solving this problem without burning large amounts of capital is technology.

“Today on Mensa, there are 150,000 campaigns running on our proprietary advertising platform,” he said. “We’ve done data integration with Amazon, Flipkart, Myntra – obviously Google and Facebook are easier because they’re built for it – but we’re actually able to manage our campaign very, very easily. If you’re a simple brand, you can’t build technology. It’s really expensive to build.”

Narayanan said Mensa’s proprietary technology can also be used to manage one of the most important elements of running a fashion business: inventory.

“It’s the same with pricing: if you get enough data, you can get exactly the right volume pricing elasticity,” he said. “And the most important thing in fashion is estimating inventory, which is a math problem, but if you have enough data and you build the technology around it, you can do it well.”

Mensa Brands is the fastest to achieve unicorn status in India so far. Unicorn companies are startups valued at more than $1 billion, and Mensa became one of them as a Thrasio-style business model gained popularity during the pandemic. Mensa has acquired more than 20 online brands in categories such as fashion, beauty and home.

Different stages of D2C

Narayanan noted that for D2C brands, scaling beyond a point is a challenge because each stage of development requires different processes and skill sets. It is relatively easy to scale a fashion brand to around Rs 30-40 crore through performance marketing and effective advertising on Amazon, he said.

“With an increase from Rs 20 crore to Rs 100 crore, the product and repeat rates must work in your favor,” he said. “Which I think is very difficult. I think India is a value-seeking segment, new people are constantly coming in with better value propositions.

To achieve further growth, Narayanan believes that the only way for brands is to move away from being an online-only brand and start selling offline, which requires a different skill set.

“When you have 20 stores and the store manager doesn’t show up in the morning, that day’s sales are gone,” he said.

“You need different skill sets to operate online and offline. It’s important to build these skill sets and understand and recognize the skills you don’t have. Most of the Mensa people we initially started with were ex-Myntra, ex-Metlife, a few Mckinsey, but no offline people. So we had to build an offline team because it requires a different skill set,” he added.