Founded by Ameve Sharma and Shrey Badhani in 2016, Kapiva started as a chain of physical Ayurveda clinics but by 2018, had pivoted into Ayurveda-based functional foods and supplements. Today, the company says it is at a Rs.90 crore annual run-rate. What’s interesting is that the bulk of their sales come from digital channels – both marketplaces and their own D2C website.
In this case study, we look at Kapiva’s:
- Opportunity
- Product Strategy
- Design Strategy
- Growth Strategy
- Advice for brand-builders from co-founder, Shrey Badhani
The Opportunity
A 2019 report by Research & Markets says that 45% of Indians born between 1982 and 2000 aspire to a healthy lifestyle, use fitness apps on their phones and are willing to pay a premium for good health.
Millennials prioritising a healthy life are expected to drive sales in the Indian Ayurveda market to ~US$ 10 billion by 2024, from US$ 4 billion in 2018.
Indian Ayurveda Market Report, 2019 by Research & Markets
It is this youthful market that Kapiva is focused on.
Large incumbent Ayurveda players in India like Dabur, Baidyanath and Patanjali cater to a mass, undifferentiated audience. Higher-end brands like Forest Essentials or Kama, concentrate on personal care. The opportunity that Kapiva spotted was at the intersection of Ayurveda, food and millennials.
Kapiva’s target persona is affluent and in their early 30s – an age when people start to think more seriously about their health. Whether they live in metros or smaller towns, says Shrey Badhani, Co-founder, Kapiva, there is not much difference in their expectations from this category.
Kapiva has sharply tailored everything – from product and formats to design and branding – for this target group.
The Product Strategy
Kapiva’s product portfolio is organised along two vectors: ingredients and solutions.
For example, Kapiva’s best-selling products are juices, which include variants like Aloe and Amla, as well as special formulations for digestion and weight-loss. Customers can also choose to shop by different formats, from powders to gummies.
The Design Strategy
In 2019, Kapiva engaged design studio Opposite to redo their brand identity and packaging.
Abhisek Sarda, Founder, Opposite, says that research uncovered two key insights: The ingredients needed to be showcased prominently on the packs and consumers cared deeply about the provenance of these ingredients.
The overall design strategy serves the positioning of ‘modern Ayurveda’. The logo encased within a blocky ‘K’ monogram is a departure from the traditional design language employed by Ayurveda brands – nary a mortar-pestle in sight!
In fact, the two visual devices used on the packs are quite unique: An illustration of a hand that serves as a reminder of the brand promise of ‘Sourcing without shortcuts’ and an arrow that links the product name to the benefits. If not done well, these could have gone horribly wrong, but we have to say Opposite has pulled it off to make the visual identity more interesting and ownable.
The Growth Strategy
One of the biggest challenges for young companies is managing the resource trade-off between marketing and distribution.
Given their genesis as an offline brand, Kapiva gravitated towards an early growth strategy that was weighted in favour of offline distribution. This defined the brand journey for the first eighteen months or so, taking Kapiva to a turnover of about Rs. 3 crore a month.
It was only by the end of 2019, that the company stepped up their focus on online. Today, in addition to their own D2C site, Kapiva retails on all major online marketplaces – from Amazon and Flipkart to Big Basket and Nykaa and the bulk of their revenue comes from digital channels.
Is this an outcome of the pandemic and will the balance shift towards offline retail, as things return to normal?
On the contrary, Badhani says that the last few months have only reinforced the importance of online brand-building and growth and he wishes they had done it earlier. “It is hard for a young brand to dominate offline shelves and both below-the-line and above-the-line promotions are resource-intensive. On the other hand, the digital world lends itself to hyper-specific marketing strategies. Quick experimentation and direct feedback from customers is also only possible online. As we scale, we will use mass media channels, but that only makes sense after a certain period of growth.”
Kapiva is also clear that they will continue to invest in their own site.
“Establishing a D2C channel helps you become a more customer-centric organisation, because there is no intermediary layer. This direct line-of-sight to your customers is critical for all brands today.
However, while setting up your D2C channel, you need to ask what value you are providing over and above the marketplaces and answer the question “Why should the customer come to my site instead of shopping at a marketplace?”
Shrey Badhani, Co-founder, Kapiva
What about ever-escalating online marketing costs?
Kapiva’s experiments have shown that the best way to contain marketing costs is to invest in brand – an insight that goes against popular perception. The company focuses on brand-building through these three levers:
1. Use existing channels to showcase brand promise and relevance
Kapiva’s social media channels, for instance, follow a problem-solution approach. The brand has also found success using influencers like fitness guru Yasmin Karachiwala and celebrity nutritionist Pooja Makhija. Their latest paid partnership is with film star Arjun Kapoor.
2. Develop a deep content strategy
Kapiva has a blog dedicated to wellness through Ayurveda and is now stepping up investment in their YouTube channel, including developing content in Hindi.
3. Create tools or value-added services relevant for the customer
Kapiva currently offers a free doctor consultation for 15 minutes with Ayurvedic doctors and nutritionists.
This is not an easy journey, admits Badhani, “but long-term it is the only option to drive down the percentage of revenue that is coming from paid marketing and drive up organic traffic and conversion.”
India is an interesting market where the modern and ancient collide. Kapiva’s growth demonstrates that younger audiences continue to have a deep-rooted faith in Ayurveda – but they want it delivered through brands, products and formats that are aligned with their aspirations and lifestyle.
Building a D2C Brand? Here’s advice from Shrey Badhani
- Be specific: Whom are you addressing? What problem are you solving for them? What place do your products have in your consumer’s life?
- Invest early in brand-building: Performance marketing will only get you so far
- Invest in your team: When you make a good senior hire, you will almost always feel they are too expensive and only later will you realise how they impact your business.
Brands like these invest heavily on marketing and they don’t manufacture anything. Consumers are simply paying the middle-man a huge chunk of money, only for their profits and marketing costs. Actual cost of products when they buy from small-scale manufacturers is not even 30%. Imagine paying 250 bucks for something which they buy as a finished product in 50rs. I hope the Indian consumers wake up soon and start focusing directly on the actual heroes, the MSMEs who make all these products
1. That’s the way the Supply chain works. MSMEs prefer manufacturing in bulk and providing White label solutions to big brands. Brands save money and time by outsourcing manufacturing to MSMEs. It’s a win-win.
2. The cost of the finished product will always be significantly less than the MRP.
Cost of the finished product includes cost of Raw materials + Labour + prodit margin.
MRP includes : Purchase price + Transport + Packaging + Cost of Marketing + Marketplace fees + Shipping (d2c) + profit margin + Other expenses. + Taxes.
Ayurveda gummies???? Oh man, is nothing scared
Love the design – the hand could have been super-corny but it isn’t
How do you invest ink brand-building without funding?
Kapiva will prob convert people who make health food from scratch – not so much the Dabur aunties.
Ton of areas waiting to be ‘modernised’ in India. People don’t realise this because average decision maker is in 50s and they forget that too someone born in 1990, brands like Dabur or even Himalaya feel fuddy-duddy and packaged.
Nice find. Had not heard of the brand before