BrainBees Solutions, the parent company of the online baby care products retailer FirstCry, has suffered a loss of Rs 393 crore in FY17 from Rs 277 crore in FY16. However, the company witnessed a jump in the overall revenue to Rs 239 crore for the period, a jump from Rs 173 crore the year before, according to Registrar of Company (RoC) filings.
The company said in its annual financial filings that although there was a tremendous increase in the turnover of their company, the company has suffered losses, owing to increase in the costs spent on marketing, employee benefits and other overhead costs.
According to industry experts, vertical players like baby care online platforms will continue to witness loss if they continuously spend to “create the market”.
Mrigank Gutgutia from RedSeer Consulting said that for e-commerce industry FY16-17 was a tough year. Vertical players were chasing rapid growth and examining with new marketing strategies and business model. Vertical e-commerce players will always face competition from the horizontals, and will have to keep pushing on brand recall, service as well as omni-channel strategies, he further added.
In October 2016, FirstCry had acquired the franchise division of Mahindra Retail, a subsidiary of Mahindra and Mahindra, which owns online babycare business BabyOye for Rs.362.1 crore in a cash and stock deal.
After the acquisition, FirstCryhad raised Rs 226 crore in funding from Mahindra Group and Switzerland’s Adveq, Infosys co-founder Kris Gopalakrishnan and existing investors, ET reported.
The online baby products retailer was in talks with multiple investors to raise over $100 Mn (Rs 665.27 crore) at a valuation of $400-500 million.