 Hello and welcome to exchange for media D2C revolution. I have with me today Paran Bhargava, the founder of TAC, the Ayurveda company. Thank you for joining us today Paran. Thank you for having me. Paran, let me start with the encouraging past 10 months that you've had. There has been a massive growth that you've seen. What do you think you did right in that period? See what is like, there are many things. So we are a fast moving train with a lot of fast moving parts. As a founder, I have a very strong belief when you are building a startup and also looking at current difficult market situation. So it's a journey like a lifelong marathon and a hundred meters spent for every day. So what we've been doing differently is that we focus on very core, sustainable ways of building a business. We are a very fine blend between experience. We carry a lot of team experience which comes with legacy brands like L'Oreal, HUL, Coca Cola India, Pepsi and a lot of new age hustle. So we've married the two worlds, build a strong team, produced and innovated very revolutionary products and then set up the entire distribution which is online and offline blended so that we can deliver what we are delivering now. And it is turning out to be a great story and a great brand in the building. Indeed a great story. Speaking of distribution, I heard or rather I write up about your expansion plans into tier 2, tier 3 markets. What is triggering this? What sort of insights are triggering this sort of an expansion and what's basically a localization strategy looking like? See, very recently, if you read last night's news, the G20 invite was welcome from the president of Bharat. What triggering is that the new India, the young age, young buyer of the tier 2, tier 3 markets has become very aspirational. That consumer is looking for a lot of new brands and they're also ready to experiment with new brands for their particular problems. So tier 1, for example, we live in Delhi, India, you living here, you would have access to 1500 brands in one category, skin care brand, online plus offline, limited offline, but a lot of brands online. But when you go to tier 2, tier 3, so they are more, they have less branch and they are very aspirational. They want to look good, they want to feel good and they are open for new brands to test. And that is where also the income is growing. So that's why we are very bullish and focused on this Bharat, the new Bharat in the building where this new age buyer is there. And we want to first build out for them and then come back in the tier 1 when we have acquired a larger mass. So still, if you look at from a population concentration, 75, 80% of the population is still tier 2, tier 3, tier 4, tier 5. So that's the pure reason, pure business strategy that why we are headed more in tier 2. Interesting you mentioned about the consumers being open to trying new brands. Do you think and you mentioned the income aspect, do you think the increase in disposable income that's happening, do you think that is playing a role in this sort of a change in consumer behavior? Absolutely. One is India earlier had set target for $5 trillion account. But the way we have grown post COVID in the way we are growing, we are actually setting out goals for the entire world. We are not headed towards now a 5 trillion. But by 2030 or 31, we should be an 11 trillion dollar economy. And that growth is also getting triggered because of the consumption being led by tier 2, tier 3, tier 4 and the growth of income in those part of the country. And when development happens, when growth happens, your income increases. When income increases, you tend to spend more and because of COVID also, a lot of focus and push has gone into self-care, personal care. People are more aware and that's why they've started to spend on skincare, hair care, Ayurveda and we want to be a part of that journey. People are aware of self-care but so are the other aspiring brands in the sector. There are so many self-care brands, so many brands that are in the same category that you are. How are you differentiating yourself from this clutter? See, I don't think so. There is clutter in the category. I'll be very honest. So if you want to look at the population of India, we are almost at 150 crores. How many of them are buying beauty? 6.5%. Do you think there is a clutter? There is 93.5% of the population that's not buying beauty personal care. There is a clutter in terms that more and more brands are coming in but when you look at from a consumer standpoint, there is massive consumer who has not bought into beauty. Look at a differentiation between a spend of an Indian, annualized versus a spend of an American on beauty personal care. What is the difference? On an average, India spends 11 dollars, a US citizen spends 350 dollars on an average per person. So look at that gap and the way we are now competing with the US and China in terms of growth. So if there is such a large gap, there is an opportunity for a lot of brands to come out. We were earlier consuming the western brands, the global brands coming into India, old portfolio of HUL, laurels. But what has now triggered that Indians are producing great brands for India and for the world? So there is a massive opportunity. Yes, what newest startups have to learn that how do you really encash on this option? How do you really set up distribution? How do you really set up marketing? How do you really create the right funnels which are profitable also and which are scalable? So I feel it's a brilliant time to be in. You just have to, you know, yes, there have to be certain unique offers, unique products, unique solutions that you need to create as a hook. And then, you know, try and scale that to a large I noticed you mentioned about the global aspect. And you also I believe pack is also looking at global expansions. A lot of the places, can you just give a shed some light on what are your global aspirations? Sure. We have already started our international business. Here again, as I mentioned, you know, we have very traditionally business model focus also. So we have opened our Middle East as the first zone, right? From Middle East, we have picked then picked up Dubai in a Budubi as the market to launch. We are almost roughly present in 100 plus stores in Dubai now. And along with being available on Amazon, UAE and Noon.com. In next one year or so from now, we should be available in 14 plus countries. We are already, you know, about to launch in Canada, about to launch in the US, then Australia and New Zealand and the entire other DCC countries with Bahrain, Qatar, Saudi. So there is a large plan to go global. There are the trigger factors are that, you know, we definitely make good margins. And, you know, you look at globally, there is no Ayurvedic beauty personal care brand, which is for, you know, larger mass population because we're a mass premium brand. Our positioning is very aptly when you look at, you know, comparing us with a laurel at a global scale. So there is no Ayurvedic beauty brand, which is available across channels globally. We are the first ones to enter and take India and Ayurveda globally. So we are extremely bullish in this, you know, global trade for us. So now what does your media, what will your media mix look like considering there's a, you know, an Indian audience that you have to reach, whose consumption patterns you would know better may be very different from what global, you know. So what is the, what does your media mix look like? How are you reaching different consumers? So we are pure omni channel. So in any country where we are opening, we are, so we are, we are majorly for the middle-led population, right, which is aspirational, which wants to become luxury, but that is still hovering in the middle, right. For them are, because they shop online also, they shop offline also because they're habitual of spending offline. So our entry, you know, our market entry strategy is again very, you know, omni focus that we are not running a D2C in different countries at the moment, but gradually we would, but we enter with Amazon or any other similar large e-commerce platform. And then we also pick and choose the right supermarkets and beauty stores in specific countries. So that, you know, we have that because our category is more from experiential point, you know, you need to give a testing, you know, fragrances, people want to, you know, test out if they want to apply that sunscreen, they need to test it out, right. So we are primarily, you know, again, the way we are operating in India, similar strategy there. And wherever you can buy a L'Oreal at a global level, TAC impends to sit next to L'Oreal across the world. Wonderful. And also, you know, coming back home to India, you have gone big on television-based, you know, marketing, you know, you have sponsored shows, MTV Roadies. I was very curious to know why do you think an MTV Roadies audience is relevant for TAC? So again, you know, our approach has been very unique. Generally, if you look at 99.9% of the young age brands, they, they're limited to spends on either influencer marketing or performance marketing. We also do both of them, right. But what we are testing out is that before going large on ATL, if you understand ATL is enough, which is pure TV ads, right. So TV ads are primarily for products, you know, they're not for brands. They're primarily for one product, one solution. And you drive sales for a product. Properties like, you know, an MTV Roadies or a Filmfare also, they're more for the trust to be built for the brand and to capture a specific audience. So MTV Roadies, for example, has a strong, very, very strong niche cohort, which, you know, that audience always connects with, right. And the way we are positioning Ayurveda, so by TAC, you know, our name was the Ayurveda company. We wanted to connect it with the youth. We want to make Ayurveda cool. We want to make Ayurveda sexy. And that's where the young audience is. Anywhere we find an opportunity to tell that there is a new age Ayurveda brand and it connects with the audience. We would go out and partner. MTV Roadies was one of those strategies where it's more from a brand spend point, that we do more of large brand awareness. We look at, you know, 18, 19 million people watch MTV Roadies and they're strong followers of MTV Roadies. And it's not only limited to MTV Roadies. We've done all MTV properties actually. So Hussle and Spristula also be a part of this entire, you know, plan. But wherever our right audience sits, we would go out and test out different, you know, testing on marketing specs that can we, you know, look at a delta on awareness, it definitely added a lot of awareness to the brand. And that's where you see the growth that's taking in. That's an interesting take because, you know, most of the times we have when a brand wants to reach the young audience, their go-to is, okay, they are on digital, we'll go on digital. So that actually is a very other, you know, any interesting take. So are we expecting to see what are the spends looking like? You know, in terms of your digital versus your television, what are your spends, which ones higher where, you know? Still, you know, our digital spends are higher because the cost of, you know, running ads on Facebook, that is Meta or Google and doing influencer marketing in today's era is significantly high because, you know, television ads make sense when you have larger distribution in place. Couple of months later, you know, from November onwards, our TV ads are also going well. We already have ad films that are have either been shot or are in the making. And then once we are set out, because from November we expect at 10,000 plus counters to be live, then we will start doing the larger television media. So as of now, if you see 70% spends currently, would be digital and 30% on TV or traditional media. But from November onwards, this split would seem to be a little different. Another thing I came across was about Kajal Agarwal's investment in the brand. Why do you think and what value do you think Kajal Agarwal is going to bring in? So, you know, so obviously, there are two, three internal marketing things, marketing thing as in, you know, when you want to add a face to the brand, it adds a certain level of trust. And when you look at Ayurveda, Ayurveda has a very strong following in the south part of the country, southern India, right? Where, you know, a face like Kajal because she has been a Telugu star, a Thambillion star. She has done a lot of movies down south. So she has a very large following there. So we wanted to en-cache that following, create a connect for TAC, and that's already visible in a number set. Typically for beauty brands, north is the largest area. In our initial phase of our journey, south is our largest area. And the cost of overall acquisition has gone down, because she has a strong community that follows. Second, you know, she's 35, 36 year old. What we are trying to build is a very new age Ayurveda. But this new India also looks up to people who are, you know, mid in their 30s or 30s or 35s who have done really well. And still they maintain themselves a lot, very social media heavy, you know, she herself believes in Ayurveda. She has a young following also. Again, the second point. Third, she wanted to become an investor. It's her first investor. And so an actual capital. It's not, you know, like typical celebrities and they, you know, take certain duty and, you know, against the money they charge for their endorsements. But here she actually had put in capital because she very strongly believes in Ayurveda. And for Ayurveda, she found TAC as one of those future brands which can really disrupt the entire category. So these three were the, you know, building blocks of our investment journey, her investment journey in the brand. And then eventually, you know, that was done when we were, when we had signed up for our baby care range, you know. Okay. During the conversation and shooting of that ad. And then our relationship, you know, grew, fostered. We also launched the product in our association, which is called Kajal by Kajal Erwar. Yeah. Again, a very, you know, unique way of marketing, but it definitely will have a very strong connect. Because we don't need any other marketing to sell it. Right. Can you give me a look at, like you mentioned about the South consumers, you know, consumers, what's the share like you are guessing on, say, your market places versus your D2C versus your. We are already very offline, you know. Okay. So our 50% plus now is offline revenue. Okay. And balance 50% almost 45 or something comes from our online. In online, our top three, four channels, first is Amazon, second is Flipkart, third is our own brand website. Okay. Then Nikon, this is how, not Nikon Intra, fourth is now Blinket. Blinket has really come up actually. Blinket, that's a new entrant, because one would not expect a Blinket. Blinket is growing at a fast pace, extremely fast. So you're getting like a good share out of Blinket as well. Yes. That's actually nice. Also, you mentioned about November seeing a lot of your campaigns running out. Are those a part of your festive preparations? Festive, we have already launched. Okay. So festive spans, festive media buying, ATLs, BDLs, on-ground activations have already begun. November onwards will be more day-to-day campaigns going live. Right. Because our distribution will be in place for a certain extent. So what did your spends look like this festive season? Did they go up compared to last year? Yeah. Obviously, see, right now we are in aggressive growth mode. Right. So we are spending heavily, you know, overall, 35, 40% of our total revenue is going on advertising and marketing. Okay. So that has definitely grown in the last two months. But we expect that this will yield results on a different level, because it's a two-year-old brand. We are upwards of 120 crore on rate now. By the year end, we are targeting, you know, the closing, that is the entry run rate for the next financial year should be somewhere around 250 crores. So we intend to be at 20 crore monthly by March. So, and if the targets are that large, so you will have to be very aggressive on marketing. Great. And lastly, are there any updates that you would want to share with us that we should be looking forward to and that we have recently opened our first review, right? Okay. We opened our first exclusive experience store. And that again, we picked up a tier two stock. We opened in Indore. Indore. It's one of the largest malls in Asia. It's a television mall. And we are on the ground floor in middle of the entire beauty. We have keys at one side, body shop, Nike, for instance, everyone. And TAC has been able to acquire a first store space. So we would test out for one or two months, look at that EBO strategy of ours, whether it works or not, because at average selling prices low, right? When you have going stores, your prices have to be slightly premium because otherwise, you will not be able to make new developments. But this is our latest again, an experiment. And we know that it might not be a very large revenue model, but we'll definitely do add a lot of brand awareness because within Indore, we have another 78 piece point of sales. That will definitely drive more serious for, you know, other counters. So similarly, we would test out Pan India that, you know, we give them an experience, we'll go to market store where people can experience TAC, the entire portfolio. And then it helps us and increasing, you know, throughput from our other point of sales. Great, great conversation. Param, it was a lovely chat, great insights and congratulations on the massive growth that you saw recently. Thank you. Thank you so much for having me. Thank you for joining us at D2C Revolution. Thank you everyone for watching.