DaMensch - building india's largest Men’s Fashion Essentials brand

Anurag and Gaurav, founders of DaMensch, in conversation with Sudipto Sannigrahi, vice president at Matrix india, talk about the origin of the brand DaMensch, how the company attained strong customer love over a short span of time, what it takes to build a profitable D2C brand and much more. Tune-in.

Salonie:

Hi and welcome to Matrix Moments, this is Salonie and joining us on today’s episode are Anurag Saboo and Gaurav Pushkar, the co-founders of DaMensch. A D2C brand that’s redefining the standards of quality aspiration and comfort for the modern man.

Anurag and Gaurav are in conversation with Sudipto Sannigrahi, vice president at Matrix india, and they talk about the origin of the brand DaMensch, how the company attained strong customer love over a short span of time, what it takes to build a profitable D2C brand and much more. Tune-in.

Sudipto:

Welcome, Anurag and Gaurav to Matrix Moments. For our viewers who already who’re already not customers Gaurav and Anurag are the founders of DaMensch, a men’s D2C apparel brand. For people who’ve already tried their products you will know how customer obsessed and product focused they are. And for viewers who follow their social media page will be aware that they stand for an inclusive modern india man and they’re sort of building products for people like us and not probably for actors and entertainers.

On top of that i think they have also built a very strong business, they’re focused on core categories for men which can be worn daily leading to high repeat purchases and they have an inventory that never ages and is timeless, which is great to see as an investor. And we’ll talk about a lot about how you built the business and why it’s a great D2C business. But before we do that, i think it might make sense for our viewers to know a little bit more about the founders.

i know you guys graduated from iiT Delhi in 2012, joined Snapdeal very early on in their journey and then moved on to Nykaa to literally build their entire product function. Nykaa is doing so well, you were doing so well in Nykaa, so what led you guys to leave Nykaa and then start a D2C men’s brand in apparel not that intuitive but i’m sure it will be exciting stories. Maybe let’s start with that.

Anurag:

Thanks, Sudipto, thanks for such a warm welcome. And me and Gaurav have known each other for more than a decade now and we used to be roommates at times and maybe on the other room in the hostel in the same wing. And then both of us together started working in an e-commerce industry, we started working at Snapdeal.com where we were both working on complementary functions front end and back end.

And then we moved together to Nykaa.com where i think we worked for almost 4-5 years setting up product department and eventually working across multiple functions be it marketing, integrating business with product and technology. And eventually we say a huge, huge learning as well as exposure at Nykaa.com.

Gaurav:

Yeah, overall we were very close to the brand ecosystem in Nykaa. Though the core job was to take care of product and technology but since the company was small it was early stage at that time so we were close to marketing, we were close to analytics, we were close to the brand side of the company. So it gave us an exposure to how this brand function works and as you mentioned we were close to the overall online e-commerce space. This along with some personal experience like all of us we’re also online apparel user.

And we realized that out of all that apparel categories that we have the essential wear category is stagnant. Throughout the world people are more exposed to new materials, high quality stitching, better fits but in india there was a stagnancy in this entire essential wear market. And we realized this after trying i think everything that was there in the market in terms of mass, premium and luxury categories. So that’s how it clicked us that okay, there is stagnancy, we’re close to this ecosystem, we know how this online e-commerce works and all these things combined actually gave us some insight and gave us basically the validation to start this brand.

Sudipto:

And i remember, Anurag, meeting you in Regis probably six months before you left and probably that’s the first time we had spoken about building a brand for men. But, first, why DaMensch. DaMensch ka matlab kya hai, and why DaMensch and who is your TG that you’re building for and then probably we can get deeper into the products.

Anurag:

So DaMensch as a word means it’s originated from the word mensch which is in English in incorporated from German language which means the man. And so DaMensch essentially means ‘the man’ and we’re creating products for men, for today’s men, which are not about being macho but which has a lot more value to give to anyone outside besides being macho. They’re smart, intelligent, they’re ambitious and we’re creating products for them.

While we target age groups from 18-45 our core TG lies between 25-40 years of age and our focus lies on there and we create premium products there.

Sudipto:

When you started, right, first of all i think for our viewers it’s always great to see founders with 10-12 years of history and chemistry because starting up is a journey with both ups and downs and then when you have such true friendship and sort of complementary skill set i think it goes a long way in building a large, large company. So when you started you identified this is the TG, this is the man you want to build for. There were two choices you took, one, you decided you will be in the mass premium, premium zone and building mass premium and premium products.

Second you started with the innerwear category. What led to those two choices?

Gaurav:

i think from the quality perspective the product that we were trying to give to the customer after that initial exercise of looking the same category in the global space we realized that there needs to be a high-quality fabric, better stitching, overall quality control needs to be very high and that can only be provided at a premium price segment. it is difficult to go ahead at mass price segment.

And at the same time when i talked about the stagnancy in the market and the essential wear category, i think innerwear was the most stagnant category, the garment that i was using as a user for last 15 years actually it’s the same maybe some color change here and there but it’s the same. That’s why i believe from the intensity of stagnancy and from delivering the quality that we wanted to deliver, these two things actually decided our journey to start premium innerwear segment.

Anurag:

And innerwear as a category has been highly commoditized. Most of them might be will not know what product we’re wearing maybe today and five years back what the major players were there in the industry they have been harping about selling this product in a very commoditized way, in the same way. And hence consumers like us will not really ask for anything new and they will not really give anything new. And hence we tried to see what can be done to evolve this category not from how you communicate and talk about this category make them understand but also innovate in this product.

Sudipto:

Too fair, i agree. Like probably in the last 15-20 years it’s the same brands with the advertisement of the same macho man coming and saying wear this innerwear and probably will win against all the villains in the world, right, that has been the positioning. And it’s interesting to see that with the launch of your innerwear and subsequently everything that you’ve launched you’ve been consistently rated the highest in your category in Amazon every time we do a NPS survey for DaMensch it’s more than 50 and sometimes 70-80.

So what has led to the customer, take us through the journey on how do you create these products. You spoke about stitching, you spoke about how you focused on building a product which is better in quality than everyone else. So what goes in the product sort of manufacturing and design process that leads to such strong customer love?

Gaurav:

i think it starts with the focus, our focus is product quality, design, fit, the overall package should come out as a highly premium product and at the same time high on utility. How you do it, we start backwards. We see what are the core and subconscious issue that a customer is facing and it’s not about asking them directly it’s about asking them directly, going from the sideways and then collating the entire list of issues. Then deep diving into material, deep diving into fit and deep diving into the market practices or what is already going on in the market.

With all these things when we’re ready with the product then we go to the most important part and that is the feedback. Before every launch we select a large number of customers to do this feedback and we’re never shy to reiterate even at the cost of delay in launch. So all these things combined actually enable us to make a very highly rated product. So just adding to that in most of the categories, yes, we’re best rated brand and even in that on most of the sub categories we have a very high gap from the second best rated brand. That’s majorly i’ll sum it down to the focus.

And post launch also it’s always our priority. As a practice what we do is every 15 days entire company will sit and we will just read all the customer concerns. We will not solve it, we will not go a brainstorming session, just read it. Everyone will have that in their back of their mind whenever they’re taking the next decisions, this helps.

Anurag:

And just to give you an example, when we were planning to launch say a vest category of our products we actually talked to almost hundred of our consumers in innerwear category, underwear category and try to understand what are the concerns or what are the things that actually create any problem to them. We realized that people say it becomes very hard after washing or it kind of shows up through my shirt. We realized that there’s a big notion that when you wear a white vest it will not show up through your skin, through your shirt.

But in fact it’s actually a difference between the skin tone, your vest color should match your skin tone closest that will make that problem solve. Hence we launched five options not just of white vest which will actually cater to all the color tones of an indian skin type and that makes the difference and that is still the highest rated vest product on Amazon today. initially it was actually the highest rated product globally in Amazon.com. And then we saw great success there and then people are just asking for more options out there.

Sudipto:

So again pausing, if you’re not a customer try their products out, you will start feeling some of the difference. And i know you spoke about it as the highest rated product on Amazon but more than 50 percent of your sales are through the website. So as you thought about building this brand how did you take choices in terms of which channel to go after and how did you determine what should be your social media presence and strategy?

Anurag:

So one thing which was very clear to us is we have to communicate our story, make consumers understand the problem they’re facing and share the solution to them and the biggest space for that was our own platform and then maybe our own social media through which we can tell that story very clearly. And hence our focus since beginning has been to make people understand through social media channels like instagram, to how great our product is, what kind of problems its solving and then from there we market heavily on social media through this story which made people come to our website, understand it and then purchase and rest all other channels give a complimentary substitute to consumers.

Sudipto:

So as a reflect on what you said and sort of how you think about D2C brands we like brands first of all which are obviously have huge sort of customer love which comes from the product and we love product focused founders. We also like brands which are brands and not labels which means that you sell significantly on the website, which would have high NPS and people are buying for the brand and some of that we see in sort of when you launch a new category today it really takes off.

The other thing that’s really interesting from the investor’s point of view when we look at a brand, right, is the full priced sell through, how much of the brand sells without discounting, what are your margins and i know you’ve been sort of contribution margin profitable since day 1 and you’ve never lost a rupee while selling your products. So tell us a little bit about the architecture of the business, how do you think about your margins, how do you think about working capital, how do you think about inventory and what goes in building a profitable D2C brand?

Anurag:

So it starts with setting a right price for the product which will sell in the market. Once we have that right pricing we go backwards and see what is our GM to have a healthy unit economics. And being D2C helps that significantly because we can cut the middlemen, we can create a premium quality product at a price point which is very competitive in the market. And once we do that the next step goes towards figuring out what set of products or what is the width of products that will work for most consumers.

There we try to take insights from our social media which has almost a 100K following which our consumers give us insights as in what kind of colors they would like to have and based on catering to 80 percent of consumers there we’re able to figure out our width which is limited and core and that makes it very unseasonable. it’s not a product that will last you only for a autumn winter season or winter season it will last you for years. That kind of design language will stick with you for long and hence there is no need for liquidation of products.

Gaurav:

Just to add to that unlike most fashion brands we’re never relying on the discounting part, we rarely discount. Most of the times when we discount it is always in the combos and that actually does not hamper the unit economics and on top of it we have pre-defined targets for the retention which actually helps us to bring down the CAC with the type of products, with the type of communication we’re doing we’re able to maintain that repeat rate so far in the market.

Sudipto:

Got it. Very interesting. i think fashion brands generally probably face 2-3 problems. One it’s full priced SQ which leads to very high discounting because they’re not able to sell everything. And two is the balance sheet loss which is liquidation of inventory. And three, you know, online world very high CAC and i think with the choice of the category and the quality of products you’ve solved all three really well which leads to unit economics that you have.

Moving slightly from economics to growth and growth is always something that guests have spoken a lot about in the ecosystem. You’ve crossed you’ve been a 100 crore brand and well on your journey to be something very larger. But how do you, a, what’s your ambition, longer ambition with DaMensch and what you think you truly want to build. And, b, how you complement growth with economics and how do you make choices with the incumbents.

Anurag:

So we started with innerwear as our entry product in the market by keeping couple of things in mind. Our product needs to be distinguished innovative to whatever is there in the market. And also non seasonal, so right, lasts for long. From there recently we launched and entered into other categories like Tshirts and shorts which is a loungewear category and within first month of our launch almost 20-25 percent of our business with just a limited portfolio of those products started coming from these new products which made us realize and evaluate the whole men’s apparel ecosystem even more deeply.

And now we’ve realized that almost 10-12 product lines that we can create over the course of next one year which will give us growth in this men’s apparel system. Each of these products have one common thread that it is distinguished in the market, solves a problem for a consumer, it lasts long with them and there is no seasonality in them. So our next 12 months’ focus is to expand our portfolio and this automatically will give us almost a 3-4x jump in our baseline today.

Beyond that we’re exploring multiple other opportunities, we’re exploring how we can reach the indian consumers even more through other channels online first and then maybe exploring other offline channels in the future. And then we’re also exploring other opportunities in different geographies because the brand is of international standard, the product quality is of international level how can we make consumers which are similar to indian profile consume these products in future. So we’re exploring couple of other routes there as well.

Sudipto:

And i know we keep on having this debate but if you want to grow, right, if you say i will become a CM to breakeven brand you can grow exponentially well. But you’ll always be held in that this is the contribution margin i want because this is what the brand stands for. So how do you make those choices and how do you think of growth versus economics?

Gaurav:

We’re a brand not a label. A brand can control its contribution margin. The way we want to build it is one customer buying more products instead of many customers buying one product each. We can do a growth hack by discounting more but that’s not how we want to build, by controlling our contribution margin, staying true to our core value of a high-quality product that’s how we want to build it and, yeah, that will give us a high repeat rate and a better brand positioning in the market.

Anurag:

Yeah, as a matter of fact, Sudipto, we’ve grown 6x pre Covid today and we’re fine with growing 3x, 4x every year. Most important part is we realize online marketing is becoming so competitive, paid marketing is not an option for brands to build anymore. That can always be done any time, it’s about what consumers you have already got onboard, figure out right problems for them, solve for them and all the flows off of new people coming in will add to that.

And hence the products which we launched recently has started contributing since day 1 because our existing consumers wanted them. And figuring that out is something which is our prime focus and we’ve figured out almost 10-12 categories and product lines for our existing consumers. if we’re able to build that right i think we don’t really need to burn money in a paid marketing significantly. That can always be a push which can be peddled any time.

Sudipto:

And i think for our viewers this is also instructive which is they’ve very healthy contribution margins and they’ve grown 6x since Covid but as investors we still keep asking the question. But focusing on your customers that i know we were discussing once and you guys told me that you want the same customer to buy from you four times in a year versus getting four customers to buy once. Which truly reflects in your cohorts and the way you want to build it which is very interesting to see and which ties back to the beginning where i said as an investor i love the company because not only it’s solving for men but it is also solving building the business in the right way.

Moving away from business questions probably one final question from my end, when you told your friends and family that essentially you’re leaving Nykaa and the first product which you’re going to build is innerwear and you’ve brought all these fancy men’s innerwear from around the world, US se Australia se and trying all of that out and building an innerwear company. How did friends and family react to it?

Anurag:

So for my case it was a repeat. i said that i want to quit the job, do a startup, so okay. You want to quit the job, do a startup. Yeah. So i said we’ll be selling men innerwear. You’ll be selling men innerwear, that’s how it was and there was a long pause and they said okay, you do whatever you decide. Then few days after i heard them calling someone and saying, no, they sell clothes, they sell apparel. They did not say that they’re selling innerwear for men but over the time now they believe that it was a right choice and overall they were pretty fine with i’ll say supporting.

Anurag:

So in my case while my family was quite supportive my wife which is today she had a lot of doubts because most of my gallery images had either Gaurav Pushkar wearing an underwear or vest or me myself taking selfies. So i had to explain myself a lot there but she was very supportive and today i think we have come a long way from there and then people are now much, much more supportive today.

Sudipto:

And i also know, Anurag, like your family also invested in the last round as an angel which shows the confidence that they have. i hope your family uses the products that you have hopefully and that gives them the comfort and the confidence of what you’re doing.

Anurag:

Absolutely not my family but my wife’s family and then the friends of that family all of them in Gujarat they’re spreading the word for our brand and all of them consume our products today. Yeah.

Gaurav:

To add to it my father ordered a beige color vest and he has never ever tried anything except white. And i was surprised that how why did you order a beige color vest. He mentioned that from your communication i could realize that it will not show up under a white shirt. Then it was a pretty good moment that we were able to communicate to him that this is what is the uses of this colored vest.

Sudipto:

Good to hear and fantastic journey and growth and hopefully that over the next 12, 24, 36 months are even better but thank you guys for taking the time out and coming to Matrix Moments. i’m sure this is the first of many that we do together and for our viewers if you already have not bought the DaMensch things please try it and thank you so much for taking the time out.

Anurag:

Thanks.

Gaurav:

Thank you.

Salonie:

Thanks for tuning in. For more Matrix Moments episodes, you can head to www.matrixpartners.in/blog. You can also follow us on Twitter, Linkedin, and YouTube for more updates.