More than 800 new-age brands from India bade farewell to middlemen in the past few years and took the direct-to-consumer (D2C) route. The D2C model has witnessed a massive uptick across the country as it enables brands to bypass the intermediaries to reach consumers faster and cater to them more efficiently.
The recent outbreak of the Covid-19 pandemic hit the traditional retail sector hard, making brands realise the importance of shifting towards a digital-first D2C model. The pandemic accelerated the growth of many major D2C brands, and those with their dedicated websites recorded an 88% rise in consumer demand in 2020 compared to the previous year.
FMCG giants such as Johnson & Johnson, Himalaya, Hindustan Unilever, ITC, Lakme and others, which have dominated the Indian market for decades, are now challenged by young startups like Mamaearth, The Moms Co, Bey Bee, Azah, Nua and Pee Safe, among others.
What’s more, popular beauty brands such as Revlon and Lotus took around 20 years to reach the INR 100 Cr revenue mark, but new-age brands like Mamaearth and Sugar took four and eight years, respectively, to cross the same milestone.
India’s D2C market is estimated to reach $100 Bn by 2025, according to Inc42 Plus’ recently released — The Rise Of India’s D2C: Market Landscape And Trends Report, 2021. The report delves deep into the emerging D2C landscape, market opportunity and finds what is driving the revenue in this sector.
Among all the sub-segments in D2C, fashion has the highest growth potential and is estimated to reach $43.2 Bn by 2025. Apparel and footwear is the most significant fashion category, expected to account for nearly 77.6% of the total online fashion market by 2025. Besides its growth potential, fashion was the most funded D2C sub-segment, raising $756 Mn between 2014 and 2021.
Fastest-Growing D2C Brands
Quite a few D2C brands have crossed the INR 100 Cr revenue mark within a short span. Among these are boAt, Mamaearth, Wakefit, Country Delight and several others.
The Road Ahead For D2C Brands
Over the past few years, the D2C model has gained traction in India due to the growth in ecommerce penetration, the rise in digital infrastructure, the growing millennial population, an increase in consumer tech awareness, and a growing number of D2C startups and their diverse offerings. However, the much-required push due to the Covid-19 outbreak helped the D2C sector reach a tipping point. A series of lockdowns to contain the pandemic, people’s fear of going out (FOGO) and the social distancing mandate have brought about a paradigm shift in consumers’ mindset, urging them to opt for digital platforms. As a result, the D2C market is expected to grow exponentially and reach a market size of $100 Bn by 2025.
New trends and opportunities have also driven the D2C sector in India. These include a rise in personalised offerings, increased focus on sustainability, mass adoption of social media and influencer marketing and the emergence of subscription services. In brief, the D2C market is expected to thrive in the next couple of years due to a shift in consumers’ shopping behaviour and the accelerated digitalisation induced by the pandemic.
Download our latest report highlighting India’s D2C rush!.
Correction Note | 13.03, June 19, 2021
Trademark logo of Nua in the feature image was an error and the same has been rectified by updating it.