Boosted by the rise of digital payments, data penetration, and the big push for online commerce during the Covid-19 lockdown, more brands are going the direct-to-consumer (D2C) route, looking to control the whole stack with vertical integration — just like tech companies
D2C adoption in India also has been quite promising; the average revenue surge between 2018 and 2019 for 11 prominent D2C startups including The Man Company, Yoga Bar, NUA, The Moms Co and others was 213%
Despite the long-term vision of most brands being autonomy in operations and vertical integration, success as a pure-play D2C brand remains elusive given the peculiarities of the Indian market
As more and more consumer brands go digital to reach customers faster and carve a unique identity, India’s direct-to-consumer (D2C) moment is well and truly here. With thousands of brands competing in the D2C space, will this be the future of India’s retail market?Boosted by digital payments, app technology, cheaper data plans and the big push for digital consumers during the Covid-19 lockdown, more brands are going the direct-to-consumer (D2C) route, looking to control the whole stack with vertical integration — just like tech companies.“With extended lockdowns and increased traffic in online marketplaces, D2C is becoming more popular because it’s faster and easier to place an order with a brand. The WhatsApp store makes it all the more convenient. A smooth and seamless experience will surely help D2C to catch up quickly,” said Aswani Chaitanya, CEO and cofounder of snacks brand Timios.“It will take some time for offline retail to pick up. However, post-pandemic, the response for our products through online channels has been really good. Customers are realising that they connect at a personal level and reach out to directly, especially if they are made in India,”said founder Ayushi Gudwani.“While building a successful ‘want’ product has been more difficult than the ‘need’ product, with forceful pivots happening towards digital because of the pandemic, the growth for D2C across both need and want, seen today may not go away. So even after the virus goes away and people step out, the numbers for D2C startups would be better than before,” believes Ishpreet Singh Gandhi, founder & managing partner at Stride Ventures.“To go totally D2C, you have to be a well-funded startup with deep pockets and you should be betting on building a long term ecommerce D2C business, or it becomes impossible to sustain. You have to ensure customers make a lot of transactions to make unit economics positive. And without scale warehousing is difficult,” said The Man Company founder Hitesh Dhingra.“All our marketing focusses on bringing people to our website. We are D2C from our branding and storytelling not so much with our product. Bringing customers to our website is the core objective,” said Shantanu Deshpande, founder, and CEO at Bombay Shaving Company.“Physical retail will continue to struggle for a while. In the longer term, some offline presence like pop-ups will come into play but it may not soon go back to the pre-Covid levels as consumer buying behavior will shift,” said Tamiesh Sood, founder, T.A.M. Collective, a startup studio that incubates and grows direct-to-consumer (D2C) brands.“Ecommerce is the lowest hanging fruit; perfect for commodity products. However, we are weary of D2C brands which start their journey with marketplaces; probably once you have built a very strong brand on your own, you could also use the reach of marketplaces to grow your business,” said Rohit Krishna, General Partner, WEH Ventures.