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Moneyball: Fireside’s Vinay Singh On D2C Brands Going Beyond Digital To Crack The Bharat Opportunity

Moneyball: Fireside’s Vinay Singh On D2C Brands Going Beyond Digital To Crack The Bharat Opportunity

Vinay Singh says that tier 2 markets and smaller cities offer D2C brands an audience with high disposable income and too little variety in the consumer market

To crack the Bharat market, new-age brands need to focus on engagement through video, vernacular content and voice interactions

Brands need to test marketplace efficacy against their native platform before deciding which direction should be the main focus and this can be cost-intensive

The high risk-high reward world of venture capital is an ever-shifting world where the future of business is predicted today. Inc42’s Moneyball is a series which focuses on the who’s who of the venture capital world, deconstructing the trends, how it works, why it works and what it feels like to be part of the world of venture funding. Explore other Moneyball stories here.


The Indian direct-to-consumer landscape has been slowly gaining traction and prominence across FMCG, fashion, home decor and lifestyle brands. With a focus on unique branding, design, social media engagement and differentiated product philosophy, the new-age brands are setting the stage for the D2C revolution in the retail and ecommerce sectors. 

By definition, a D2C brand has end-to-end control of the product, right from the factory to the customer, with no middlemen involved. However, being in the infancy stage in India right now, D2C brands have depended on online marketplaces such as Amazon and Flipkart to scale. There are only a handful of brands, which have stuck to pure-play D2C model — Bewakoof, Country Delight, Melorra etc. 

In comparison, in more mature markets like the US, China etc, there are several brands which have never listed on marketplaces but continued to operate as independent ecommerce brands. Over the past few years, the approach has also shifted towards a hybrid-model— offline as well as an online presence. In India’s case, the hybrid model includes offline and online via a direct website and ecommerce marketplaces.

But that’s the order of the day. According to Fireside Ventures’ Vinay Singh said it is imperative for brands to be available on all of these marketplaces, given the state of things.

“From an Indian context having an only-website strategy might not be right, we are not mature enough for that, maybe five years later it will be a different ballgame. But where we are on our internet maturity as a country, we need to have an omnichannel strategy and the mix of marketplace and website presence has to be found,” he added.

Putting it into context, in markets like the US, approximately 90% of the population is online and therefore, brands have been able to build $20 Mn- $50 Mn revenue businesses valued at $300 Mn-$500 Mn without listing on the marketplaces.

But in contrast in India, out of 1.3 Bn population, taking a conservative approach, the connected users are 400 Mn-500 Mn, of which 175 Mn have transacted online. Out of these, only 40 Mn regularly transact online— at least a couple of transactions every quarter. So, for these 40 Mn users, D2C brands which they don’t know, can’t be the first choice. Hence, having a presence on marketplaces becomes imperative. If a brand is able to rope in around 10% of the top layer, it has a sizable business and a huge opportunity to tap the next layer. 

This also depends on the target market— if a brand is targeting the lower or upper-middle-class population, who are infrequent transactors on the internet, then the company’s core focus would be tilted towards marketplaces. But if the focus is on the top or creamy layer, the core focus needs to be on the native ecommerce platform. 

The Key To Bharat: Video, Vernacular And Voice

Of course, going beyond digital is also a fundamental need to focus on Tier 2 and below markets. With high disposable incomes, internet-connected audiences and less variety of choices, D2C brands can definitely gain quickly, if they find the right price and distribution. It will be very interesting to see how D2C brands lower the acquisition costs through engagement.

Further expanding on the key essentials to crack the so-called Bharat market, Singh says the key points are — engagement through video, vernacular content and voice interactions 

“If your brand really needs to appeal to Bharat and not India, and increasing all brands have to cater to that, they need this. We are working with a lot of companies on their vernacular content strategy, video content strategy and increasingly, their voice content strategy because 25% of searches in India today are voice-led, projected by 2025 to go to more than 50%.”

It’s not just Singh; others have also claimed that voice-based ecommerce will bring more users to brands. who have better-optimized voice content will be winners for tomorrow,” Singh emphasized. This is already being used by brands like Flipkart, which recently introduced the Voice Assistant to enable consumers to discover and buy products using voice commands in multiple languages, starting with Hindi and English. These solutions are capable of understanding vernacular languages such as Hindi, ecommerce categories and products, and tasks such as searching for a product, understanding product details, placing an order, etc. 

Moneyball: Fireside’s Vinay Singh On D2C Brands Going Beyond Digital To Crack The Bharat Opportunity

Putting this in the context of what interests venture capitalists, Singh added that the bias is towards early-stage businesses starting selling online natively. Every startup will have to find the product-market fit, which, in a consumer brand, would need several optimisations — for the right category at the right price point with the right packaging which connects with the customer. It’s also about product development and the proposition of the brand which connects best with the market. 

“The preference [for investors] is native websites, because then in a controlled manner, you can conduct multiple A/B tests, and experiments,” Singh adds. “The kind of flexibility that your own website gives you, Amazon and Flipkart will not, because you have several processes —- listing, tagging and marketplaces have millions of products. It’s difficult getting discovered on Amazon or Flipkart,” he added.

Balancing The Trade-Offs

For a relatively new brand, getting the visibility right takes time. But while marketplaces can bridge this gap, Singh says that once the brand has a core proposition ready, it can go for an Amazon or Flipkart listing, and spend marketing dollars to make itself discoverable. But it’s key to have the right product and inventory for pan-India distribution. 

But the costs associated in the listing etc can be a deterrent for brands. But at the same time, there is a lot of investment required while getting users to the native ecommerce website too. Talking about balancing this and the trade-offs, Singh explained that a brand has to think from the repeat, retention, kind of mindset and justify the initial costs to get the opportunity to get customer data, experiment with product etc. 

“Once you’ve identified the need gap in the market, and the pricing sweet spot in the market and worked out your costs and your supply chain costs in a manner that your gross margin allows you to do some marketing and acquire customers”. 

The cost to get initial customers on marketplaces might be half of what it is on the website, but the amount of data generated natively will allow brands to sell more to the same customers and offset the costs. Singh believes that there is an elasticity in terms of paying for premium products or switching from the marketplace, which needs to be considered in identifying the price point, and brands that nail this could be the early winners in the D2C space.