This week we had our Morning Coffee with Itz, a Latinamericanist cyberflâneur @itsitz_ .
The e-commerce space in Mexico keeps growing and evolving, its growth is expected to double between 2017-2024 with more consumers wanting to try new products in a convenient and practical way. The adoption of social media and new reliable payment options have created more access to try new business ideas on the internet.
Many entrepreneurs have taken advantage of this to launch “DTC brands”.
The term DTC stands for “Direct-To-Consumer”, digitally native brands who seek to disrupt their category with an innovative range of products and appealing aesthetics, while building an exceptional and close relationship with their customers, often with the personal reputation of their founders attached to the core of the brand.
It might seem like launching a new DTC startup is easy, but definitely competition is getting tougher. Established companies are rapidly getting into the space competing to acquire the same customers with bigger marketing budgets and other competitive advantages. Newer brands need to execute faster and outsmart them.
Some of these brands have gotten attention from Private Equity and VC (venture capital) funds. They smell like profits and potential faster exits and acquisitions.
Below you can find some leader DTC Mexican brands led by female founders, bold business women that have experimented different ways to generate awareness, acquire customers and grow their companies:
The Fit Body Co
Julieta Silva, started her brand by sharing on Instagram her recovery journey from a ski accident that made her dropout from ITESM. Who would have thought that such an unfortunate event would end up in a profitable company bagging 30 million pesos last year, serving the underserved women’s fitness market in Mexico?
They have created a cultish following of women that motivate each other in seasonal “Fit Body Challenges” in exclusive online groups where the community shares and competes to achieve the best body transformation. This kind of social proof has been key to the virality of the brand.
The Fit Body Co is a 500 Startup backed company and the only profitable from their badge. This year they are planning to expand to retail channels like Costco and launch a fitness app to keep growing.
Belle
If there’s something Belle’s founder Fiona Ferdi excels at, it is in creating beautiful jewelry and aesthetically soothing product shots that help them nail performance marketing.
Born in Querétaro, Belle is one of the most popular 100 percent DTC fantasy jewelry brands in Mexico. They took advantage of Instagram’s early non-saturated days to grow their following to over 200,000 followers.
Another thing they’ve understood well is the Mexican millennial market. They have been clever with their price strategy to break some e-comm barriers within a price-sensitive market, all of this while increasing the average ticket and taking care of the unit economics.
YEMA
Founders Laurene Maire and Angela Ursic are determined to create a version of Trader Joe’s for Latin America, a conscious supermarket where they develop healthy and affordable products.
Their previous experience scaling successful eCommerce companies like Luuna and Linio, plus their outstanding credentials at top business schools like Wharton and HEC, grabbed the attention of VCs like ALL VP raising pre-launch capital with only their business idea.
YEMA’s branding is very unique and simple, just like the way how you can get their products. Even though they started as a DTC brand, they have partnerships with allies like Rappi and Cornershop to increase their distribution. They also opened a physical store in La Roma neighborhood in Mexico City and are planning to open more locations.
Raw Apothecary
Like YEMA, radical transparency and conscious consumption are big global trends among consumers that are growing in Mexico too. The duo of founders Macarena Riva and Andrea Sanchez seized this opportunity to create Raw Apothecary, a 100 percent natural skincare brand without stereotypes.
They are challenging leader skincare brands like Lancome & Estee Lauder with their value proposition, building a close relationship with their customers via social media to develop new products solving specific needs of Mexican skins. They also sell through channels like Amazon and independent retailers that let them have more control of their margins.
Macarena’s previous experience working at the prestigious private equity fund Nexxus Capital took them to explore funding options to expand. Raw Apothecary is a company backed by 500 Startups.
Someone Somewhere
Once again, Someone Somewhere capitalizes on the sustainable and ethical fashion business, a mission led by one of their founders Fatima Álvarez, with the goal to get millions of artisans out of poverty. Their products are made with traditional embroidery and other techniques with a fresh and cool touch of contemporary fashion trends.
Someone Somewhere is a digitally native brand backed by investors like DILA, GBM Ventures, Soldiers Field Angels, Unreasonable Capital, and Kalei Ventures. They have 4 physical stores in Mexico City with plans to expand further to the United States market.
MAR Cosmetics Co
Yup, even though its founder, the influencer Mariana Rodriguez has been controversial for many things, she has been very smart to squeeze her clout (internet fame and influence) to profit creating many DTC brands like Muno Wear, Urban Studio, Mi Mercado and her most successful brand Mar Cosmetics Co, which sold out in hours when it launched.
She has created an army of followers that help her to create and constantly test product market fit at a rapid pace. Mariana and her team are masters of organic customer acquisition techniques. Her fame has been a very scalable way to generate demand and word of mouth of her products.
Do you think these companies have a chance to become the next unicorn? The consumer market faces a lot of challenges, consumers don’t really know what they want and once a brand starts to stand out, a lot of copy cats follow through. Brands like Kylie Cosmetics (valued at $1.2B) and Halo Top (acquired at US$2 billion) have demonstrated that it’s possible.
Something that these founders have been assertive is to take advantage of the brand and community moats they have created and the scalability the internet offers. Their merits deserve to be recognized.
Let me know your thoughts!
She is a cyberflâneur and jack of all trades who’s into experimentation regarding all things DTC. She is an avid fan of Latin American fintech, media, and retail startups. She’s also into turmeric lattes. You can let Itzel know your thoughts on Twitter.
