How Smytten is riding on the untapped targeted sampling ad market in India
According to Swagat Sarangi, Smytten’s Co-Founder, the targeted sampling ad market in India is a $12-13 billion market
Premium and luxury brands platform Smytten that works with the likes of Guess, Jaguar, Kenneth Cole, Maybelline, L'Oreal, among others to provide them with a targeted sampling strategy is now targeting two-digit top-line in India, Swagat Sarangi, Co-Founder, Smytten told exchange4media. “We are looking at growing by 5-6X from here next year and we are already multi-million topline we are sitting on, so we are soon going to cross the two-digit top line in India,” he added.
Sarangi revealed with the fallout on e-commerce happening, about 10-20% of conversions will take place on that side and the platform is looking at delivering 10 million trial orders to consumers. According to him, the targeted sampling strategy market in India is a nascent one and still scratching the surface. “In any market from the overall marketing spend, only 5-7% is spent on consumer engagement in trials. If you will see EY, the US has a 200 billion dollar ad market; Out of that in the US, almost $10 billion gets spent on consumer sampling. In India we are not a very big ad market yet, we are about $12-13 billion market; almost $600-700 million today in an organised way is being spent on sampling and trial,” he revealed.
Smytten’s business model involves partnering with premium and luxury brands to provide them with a targeted sampling strategy in India. Elaborating on the business model, Sarangi said, “In India lifestyle products as an industry has grown 30-35% in the past two-three years in the premium category. Most of the brands in the premium space target 20-25 million people in the country, and we call them HENRY – High Earning Not Rich Yet. We have 500+ premium brands. If you will see the funnel, we are focusing on the upper part of the funnel, which is awareness, intent and consideration, and transaction being a by-product of it.”
Shedding light on the pre-purchase engagement strategy and how it is offering better ROI than traditional sampling or digital advertising for many premium/homegrown brands in India, he explained, “Today for a new brand, if it wants to sell X product, your typical acquisition cost will be X to 1.2X. So for e.g., if the product cost is Rs 700, the cost of consumer acquisition will be around Rs 700 to Rs 1000. If you look at sampling, on our platform itself, we have been able to deliver a double-digit conversion for every brand who has sampled on our platform. That means every 10 people trying your products, one person is buying on our platform. Also, If one in ten or two in ten are converting, your consumer acquisition cost from a regular direct consumer acquisition or through digital is actually three-times lesser. That is where brands see value.”
Sarangi contended that the platform has cut across multiple categories and the targeted sampling approach has helped brands fetch big returns. “For beauty brand-Just Herbs, their issue was reach and customer acquisition. We helped them do mass sampling on our platform and post that we saw almost about 20% conversion for their products. Their online sales have almost grown by 30-40% post they have started sampling. Another brand-Aaranyaa, in the natural premium space, struggled to scale it online. Post sampling their online business in last one year has grown by almost 30X.”
The company last year raised $1.5 million in new funding round from Roots Ventures. This took the Gurugram-based firm’s total fundraising to around $3 million, since inception in 2015. Roots Ventures, with a corpus of Rs 300 crore, had backed Smytten in its seed round as wellFor more updates, be socially connected with us on
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