Mahindra War Room 2015

BabyOye Caselet

MAHINDRA PARTNERS SECTOR:

RETAIL BUSINESS CASELET: BABY-OYE BRAND STRATEGY
Mahindra Partners is the USD. 900 Million Private Equity and Venture Capital Division
of the Mahindra Group, which incubates new businesses with the mission to accelerate
value-creation through a diversified global portfolio of emerging businesses. The
Mahindra Partners Divisions portfolio spans across multiple industries namely Logistics,
Steel Processing, Renewable Energy, Conveyor Systems, Vocational Education, Retail,
Consulting Infrastructure projects, Luxury Boats and Media & Entertainment.

This caselet pertains to the Mahindra Retail business, comprising the Mom & Me chain
of retail outlets, and the recently acquired Babyoye.com business.
BUSINESS BACKGROUND
Estimated at INR. 75,000 crores in 2015, a decade ago the Mother & Child Care Market
in India did not have a single organized retailer to address the needs of mother and
child. Only those Indians who travelled abroad had access to specialized mother &
infant products from well-known international brands. Local brands and unorganised
stores were the only choices and the Indian mother and her baby had significantly
lesser choice that her western counterparts had. The Mahindra Group saw the
opportunity to fill this gap with a specialty retail chain for Mother & Child, while also
bringing the Mahindra brand to every young & aspirational household, woman and child.
The first Mom & Me Store opened in January 2009 in Mumbai and expanded to 104
stores in 55 cities, with a retail footprint of 300,000 sq. feet, serving over 2.5 million
customers, online and offline, realizing a top-line of INR. 206 crores in FY15.
The rapid growth of mobile penetration, e-commerce and e-tailing in the last few years
has changed the way retail business was run in India. Along with it, the consumer
buying behaviour has evolved. Today buyers have access to more information from
more sources than ever before. They ask questions, get answers, read reviews, do
comparisons and start conversations with people they've never met all on the web, all
on their own terms and all on their own time schedule. They expect the retailer to not
only provide the convenience of shopping from home, in the physical format, on the
mobile, tablet, PCs, etc. they also expect to pay using digital wallets, mCommerce,
online, cash on delivery, buy online, return in store or vice versa, check online, buy in
store or check in store, order online. Through the experience, they expect to stay
engaged with the retailer via text messaging, social media and all forms of
communication, keeping them abreast of trends and offers. If this is not enough, they

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Mahindra War Room 2015

BabyOye Caselet

also expect the retailer to provide them a seamless experience across all channels. The
world of traditional commerce and e-commerce is merging and everything now is an
Omni channel. To keep pace with this changing market, there arose a need to relook at
our business model.
In December 2014, Mahindra Retail acquired a top e-commerce player in the infant and
child space Baby Oye. At that time, Baby Oye was one of Indias largest online stores,
carrying over 10,000 kids and baby products from 500+ brands. The move was to
expand the reach of Mahindra Retail and successfully enter the legion of e-tailers who
are poised to dominate India's consumer goods market.
To leverage the merger and truly realize the potential of both the brands,
Mahindra Retail decided to go in for a rebranding exercise. Several brand names
were considered post extensive market research involving different stakeholders. The
research culminated with BabyOye as the new brand representing both the companies
giving out a message - Better Together. BabyOye has also re-oriented its strategy and
redefined its target as the -9 to +3, (from the earlier -9 to +9), implying that it serves
the needs of a pregnant woman to kids upto 3 years.
Today, Baby Oye sells products across 11 categories Maternity Apparel (Western &
Ethnic), Mother Wellness, Baby Wellness, Infant Apparel, Kids Apparel (upto 3 years of
age), Kids Footwear, Kids Accessories, Nursery, Safety, Toys & Games, and Travel.
BabyOyes private label brand Kriti offers a specialized range of fashionable maternity
apparel (Western and Ethnic), Nursing lingerie, Mother wellness products such as
tummy hug, breast pumps, Body and feeding pillows. The range for babies includes
Feeding & Hygiene products, Travel and Safety products, Furniture and furnishings,
Kids apparel and Toys & Games, including a wide selection of international brands such
as Fisher Price, Disney, Medela, Farlin, Pigeon, Avent, Graco and Seba Med.
LIVE CHALLENGE: BABY-OYE BRAND STRATEGY
Globally, more women are joining the workforce and have less disposable time on hand.
With higher disposable per capita income, consumers are becoming more brand
conscious, and are spoilt for choice with a variety of brands. E-commerce as a channel
allows the time conscious customer to shop efficiently, and also brings an array of
global brands to be more accessible to the end consumer.
eTailing, which may be defined as online retail and online marketplaces, has become
the fastest-growing segment in India with CAGR of around 56% over 2009-2014. The

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BabyOye Caselet

size of the Indian eTail market is pegged at 6 billion USD in 2015, with 75% of Indian
internet users in the age-group of 15 to 34 years. Peer pressure, rising aspirations with
career growth, fashion and trends encourage this segment to shop more than any other
category. India, therefore, clearly enjoys a demographic dividend that favours further
and faster growth of eCommerce. eCommerce customers demand an enhanced
shopping experience, right from product selection to delivery. Generating and sustaining
traffic, bringing down the customer acquisition cost, last mile delivery and reducing
delivery costs are imperatives for all companies operating in this space. Offering large
and continuous discounts in the hope of acquiring and retaining customers, is becoming
a universal strategy being adopted by all eCommerce players, though it is unclear if
these discount-driven efforts are resulting in customer loyalty.
BabyOye believes that there is an opportunity to move beyond the price point play and
indulge the customer in unique products and customised services to win lifetime loyalty.
Products like health foods for pregnant women, allied services offering assistance to
parents during maternity, offering support to fathers-to-be at their workplace are some
diverse possibilities that BabyOye can potentially extend into.
What is the blue-sky of potential opportunities for the BabyOye brand? Which
ideas among them hold promise and potential, considering BabyOyes brand
promise to deliver value to the mother-to-be and children upto 3 years of age?
How should BabyOye pursue these opportunities? Evolve a strategy for the
BabyOye brand to realize revenues of INR. 1000 crores by FY17, including the
online and the offline play.

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