Can FirstCry Hold Investor Attention In A Quick Commerce World?

SUMMARY

• FirstCry shares have fallen nearly 70% from their peak as quick commerce eats into this traditional strengths

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At least seven times during FirstCry’s March-quarter earnings call, the company returned to a familiar theme: rationalisation. 

Competition, the management suggested, was behaving irrationally. Discounting in key categories was irrational. Pricing pressures were irrational. The implication was that the current environment was an aberration, one that would eventually correct itself.

Public markets, however, appear far less patient. Since listing in August 2024, shares of Brainbees Solutions, FirstCry’s parent company, have fallen nearly 70% from their peak, wiping out more than half of the company’s market value. Today, Brainbees is worth roughly ₹11,318 Cr.

What’s striking is that the selloff has unfolded even as the underlying business continues to expand. Revenue rose 12% year-on-year to ₹8,548 Cr in FY26, while adjusted EBITDA grew 24% to ₹486 Cr. Losses narrowed from ₹265 Cr to ₹204 Cr, annual GMV crossed ₹11,600 Cr, and existing customers contributed nearly ₹8,930 Cr of that total. 

For much of the last decade, FirstCry represented one of India’s clearest specialist ecommerce success stories. While horizontal marketplaces chased scale across dozens of categories, FirstCry focused on a single consumer: parents. It built an ecosystem around that relationship, selling everything from diapers and feeding products to toys, apparel and baby gear. Along the way, it developed private labels, expanded its offline footprint, forged partnerships with hospitals and maternity clinics, and cultivated a large parenting community.

Today, FirstCry counts more than 11 Mn annual transacting customers, 193 Mn app downloads, 1,189 stores and over 13,500 hospital and maternity-clinic partnerships.

The moat seemed obvious. A first-time parent navigating questions of safety, quality and product discovery was more likely to trust a specialist than a general marketplace. That belief powered both FirstCry’s growth and its valuation.

The problem is that ecommerce has changed. The categories that once naturally belonged to specialists are now being targeted by everyone, from Amazon and Flipkart to Blinkit, Zepto and Instamart. And as convenience, speed and aggressive pricing become increasingly important purchase drivers, investors are beginning to ask whether specialisation alone remains enough.

Shrinking Room For Vertical Ecommerce

The biggest threat to FirstCry isn’t another baby-products retailer. It’s the fact that everyone now sells baby products. Parents can order diapers from Blinkit. Baby food from Instamart. Toys from Amazon. Children’s clothing from Myntra. Strollers from Flipkart.

The categories that once naturally belonged to FirstCry are increasingly available across multiple platforms and often delivered faster. In its earnings call, management explained the pressure on margins, pointing to aggressive discounting in diapers. FirstCry said the category had already shaved roughly 140 basis points off gross margins, a pressure that first emerged in the December quarter and continued into Q4.

“It will take us a couple of quarters for the irrational discounts or irrational intensity to go away. “We believe that its probably a 4-6 quarters sort of a phenomenon,” CEO Supam Maheshwari told analysts. 

The source of the pressure, management argued, wasn’t limited to a handful of players. Asked whether the discounting was coming from specific competitors, Maheshwari replied: “It is not specific… it is across the board. It’s more of a platform phenomenon than a brand phenomenon.”

Investors, however, may be hearing something different. FirstCry’s moat rested on the idea that expertise mattered more than convenience. Parents seeking trusted recommendations, specialised assortments and category depth would naturally gravitate toward a dedicated platform. 

“But when diapers can be delivered in ten minutes, convenience starts competing directly with specialisation. That is perhaps why the management is now focussing highly on logistics,” a former FirstCry executive said. 

The threat from quick commerce might be exaggerated as well. A significant portion of its business comes from fashion and apparel, categories where quick commerce platforms have yet to establish a meaningful presence. The bigger shift may have been in consumer expectations: parents increasingly expect faster deliveries across categories, prompting FirstCry to invest more heavily in logistics and fulfilment.

Throughout the call, FirstCry management also repeatedly highlighted RocketBees and Qwik, arguing that better fulfilment time was already translating into a “clear superior customer experience” and even “incremental growth” in markets where the network had reached scale.

To this end, it is investing heavily in logistics infrastructure to defend market share, even though baby products are slowly becoming commodified and a convenience category rather than a specialist category.

Given this trend flow, the question investors will ask is whether FirstCry’s long-standing moat is strong enough.  That is not easy to answer just yet, but one thing we can say is that its singular focus on parents may not be as powerful as it once was.

According to Aakash Agrawal, associate director, Anand Rathi Investment Banking, the market has become more discerning, but not necessarily more negative, on vertical ecommerce or category specialists. 

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