SUMMARY
A businessman should always focus on generating profits, the Freshworks’ CEO said during The D2C Summit 3.0, Day 1
According to an Inc42 analysis, only one out of four funded D2C brands in India are operationally profitable
As the funding in the startup ecosystem has fallen in 2022, startups need to focus on building sustainable businesses
Freshworks’ CEO Girish Mathrubootham, in conversation with Sandeep Murthy, partner, Lightbox, talked about how D2C brands have no geographical boundaries and thus, must be responsible in their conduct. By responsible’, the CEO urged startups to build consumer-centric, sustainable, scalable and profitable businesses.
As he said, “You cannot have economies of scale if you’re losing money on every transaction. It only makes your losses grow. The fact that you have a big market and there’s no limit to how much you can sell, it will be right to focus on unit economics, irrespective of the funding cycle or the market sentiment.”
Watch All Sessions!During The D2C Summit 3.0, Mathrubootham further said, “If you’re a corner store sitting in Bengaluru or Chennai, you are only catering to that local population. But a D2C brand is able to sell across India or across the world. So I think entrepreneurs should build a brand the right way by giving value to customers.”
“A businessman should always focus on generating profits,” the Freshworks’ CEO concluded.
His comment is of utmost importance at a time when only 24 out of the top 100 D2C businesses are profitable. According to an Inc42 analysis, only one out of four funded D2C brands in India are operationally profitable.
The report adds that the supply and consumer demand shock infused by the pandemic clubbed with growing competition, may result in more Indian D2C brands closing their annual accounts in losses for FY22.
Founded in 2010, Mathrubootham’s NASDAQ-listed SaaS giant Freshworks offers customer management platforms, an AI-powered chatbot and messaging platform for customer support as well as call centre-based solutions for customer service resolutions. The startup has been profitable (before tax) since FY19.
Besides Mathrubootham, a range of other speakers on Day 1 of the summit also spoke about the need for responsibility in D2C businesses amid a funding winter. For instance, Murthy, in another session, talked about how funding is not the end of metrics for D2C business, but the consumer proposition matters more.
The first day of The D2C Summit 3.0 saw founders and investors of some of the top D2C brands discuss a range of issues including brand building, operating and scaling them as profitable ecommerce businesses among others.
The Day 2 of the summit looks to unfold discussions around navigating the pressures of ecommerce, building great customer relationships and becoming privacy-first and consumer-first brands.
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