D2C Brands Should Focus More On CAC, Not Consumer Wallets: CashKaro’s Swati Bhargava

Despite a steady growth journey of majority Indian D2C brands, a few pit stops here and there persist. And the increasing cost of customer acquisition is one of them. For D2C brands, the stress is more on customer acquisition cost, rather than the consumer wallet– Swati Bhargava, cofounder of CashKaro, said at Inc42’s ‘The D2C Summit 3.0’.

According to Bhargava, Google and Facebook have become expensive for brands and are not providing that value. 

She was speaking at a panel discussion on the topic ‘D2C Goes Festive: Winning Strategies To Tap Seasonal Boom’. The session also saw participation from Ayushi Gudwani, founder and CEO of FableStreet; Shantanu Deshpande, founder and CEO of Bombay Shaving Company; and Manish Chowdhary, cofounder of WOW Skin Science. 

As per Bhargava, plenty of D2C brands are telling CashKaro that they want to build direct traffic rather than paying to marketplaces. And here, due to the gap in performance marketing, D2C brands need to figure out the price of customer acquisition, Bhargava added.

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As life is gradually going back to normalcy, there is internet fatigue noticeable among consumers and they are wanting to go out and shop, speakers at the panel said. However, the D2C story is here to stay for the long term and it is not withering off soon, they also added.

The experts also agreed that overall macroeconomic consumption is going upwards. While some of them are predicting pressure on online shopping channels, Bombay Shaving Company’s Deshpande believes there might be portfolio shifts. Consumers may spend more on categories such as travel and gifts.

“As more capital gets deployed in acquiring consumers, how consumers are discovering brands is changing. Hence, companies will struggle to understand how to be discoverable,” Deshpande added.

According to an Inc42 report, the Indian D2C segment’s total addressable market opportunity is projected to surpass $302 Bn By 2030, growing at a CAGR of 24% during 2021-2030. In the first six months of 2022, D2C startups raised $1.3 Bn across 119 deals. 

In the D2C segment, the FMCG category beat the fashion category in terms of total funding during Q2 2022. Of the total $0.6 Bn funding raised by D2C startups, 59.7% went to FMCG brands, while fashion brands raised 32.5% of it.

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