Over 600 brands born on the internet are selling to customers directly in India. It is now called the direct-to-commerce rush. Let us understand how this trend is shaping up in Indian e-commerce
With customers increasingly becoming more conscious about their preferences, they are demanding the same from their brands too. Gone are the days when you had to settle for a face wash or body scrub from one of the few available brands. Today, we have mCaffeine, a personal care direct-to-consumer, or D2C, brand that makes caffeine-based products, which it claims are vegan and hence more natural than the existing products in the market. Similarly, men’s grooming has evolved as a niche market in itself. So we have Bombay Shaving Company offering solutions to men’s grooming needs, such as shaving foams and razors, hair styling wax and even charcoal facial kits. There are other brands like Ustraa and Beardo in the same segment which are also making a deep cut. So, let us look at the difference between the D2C and traditional retailers. A traditional retailer would manufacture the product, sell it to a wholesaler, who would then have to rope in a distributor, and finally get their products at a retail store from where the consumer would buy it. HOW D2C PLAYERS WORK
- Make, market, sell and ship their products themselves, without middlemen
- Sell their products through their websites
- Use social media platforms to maintain consumer connect
But D2C brands cut out the middleman. They manufacture their products, advertise them on the internet, and deliver them to consumers directly. By skipping this traditional fast-moving consumer goods (FMCG) sales route, D2C companies say they’re able to offer better prices to customers while earning higher margins at the same time. It is also about striking the right connection.
The D2C brands use social media to maintain lasting connection with their consumers. There is a direct feedback loop, from where they pick up on conversations happening online and also use social media influencers to create content for Instagram to sell their products. For instance, Bewakoof, which today is a full-stack fashion e-commerce platform, started in 2012 as a brand selling quirky mobile covers and other accessories. The brand has a feature called ‘Vote for a design’, where some of the company’s designs are put out for vote by customers. Only the designs with a certain number of votes go into production; the rest are shelved. Bombay Shaving Company Founded: 2015 Founders: Deepu Panicker, Raunak Munot, Rohit Jaiswal, Shantanu Deshpande Category: Personal care Website: Bombayshavingcompany.com Funding raised: $17.7 Mn Bombay Shaving Company COO Deepak Gupta said this about the things that a D2C brand does differently:
- We don’t work with any agencies
- Brand, performance marketing and design teams work together
- Teams demonstrate their agility to make quick changes to marketing campaigns based on feedback
- All marketing is done in-house
- Design team’s performance is measured both on aesthetics and click-throughs
- D2C is a data science backed by consumer insights business
Earlier last month, fresh meat and seafood brand Licious announced that it had become India’s first D2C unicorn. India has about 600 D2C brands at present. And there seems to be no stopping the D2C rush. The sector was valued at over $1 billion as of the end of FY21 and according to an Avendus Capital report last year, it is expected to grow to $100 billion by 2025. FabAlley Founded: 2012 Founders: Shivani Poddar, Tanvi Malik Category: Fashion & apparel Website: faballey.com Funding raised: $18.7 Mn Shivani Poddar, co-founder and CEO of fashion brands FabAlley and Indya, highlighted how better data analytics was ensuring a nimble supply chain for D2C companies. She said:
- Selling direct to consumer helps get the right data about preferences, price points, etc
- In fashion, supply chains are very fast
- We need data analytics to figure out the items that are moving
- We assess reasons for customers’ buying patterns
- D2C fashion supply chains more agile than larger companies
- In large companies, typical lead times for fashion range from 6-12 months
- For D2C brands, the lead times are less than 45 days
It’s never been easier to start a D2C company. One can set up an online store quickly by using e-commerce software from Shopify, Magento, Ecwid, BigCommerce, Volusion, Wix etc. There are payment gateway solutions from Razorpay, Paytm, PayU and PayPal among others. Similarly, companies like Shiprocket, Delhivery and Ecom Express offer logistics solutions to these companies. Clearly, the D2C wave can spawn several more brands in niche categories.
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First Published: Wed, November 10 2021. 08: 30 IST