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How D2C Wellness Brands Can Achieve Hypergrowth And Build Brand Loyalty

02 Jan'23 | By Inc42 BrandLabs

Inc42 and Simpl recently held a panel discussion titled How D2C Wellness Brands Can Achieve Hypergrowth And Build Brand Loyalty. The session explored many critical areas such as

Decoding the changing perception of wellness and personal care, especially in the light of a rising male user base and increasing female workforce
Analysing D2C brands’ omnichannel approach, including partnerships with offline retailers
Understanding the key drivers of online shopping such as product effectiveness, price, nature of ingredients used (organic or otherwise), fragrance and more

Moderated by Nitya Sharma, cofounder and CEO of Simpl, the discussion included Shauravi Malik, cofounder of Slurrp Farm; Sahil Dharia, MD of Soothe Healthcare; and Harini Sivakumar, founder and CEO of Earth Rhythm.

Chasing Trust And Hypergrowth: Know What Keeps Brands Ahead Of The Curve

For ages, parents and grandparents have tried to teach their children why prevention is better than cure for holistic healthcare. In fact, it is a core concept that should be ingrained in everyday health and wellness regime. But few realised its importance until the Covid-19 pandemic struck in early 2020. Soon enough, nurturing a robust immunity system became critical to staying well and fighting against the unprecedented health crisis.

Thanks to this paradigm shift in perspective, new-age health and wellness brands have grown at a fast clip, piggybacking on the digital-first, direct-to-consumer (D2C) business model. At the peak of Covid-19, this sector grew immensely popular due to the agility, convenience and consumer-friendly pricing, and the momentum has continued. The D2C healthcare market is estimated to reach $3 Bn by FY27 from $0.5 Bn in 2022, growing at a CAGR of 43%, a Statista report says.

But there is a catch.

Undoubtedly, today’s ‘woke’ consumers are ready to spend more on customised products that will help improve their health and fitness, nutrition and sleep, looks and mindfulness. But in a world dominated by FMCG giants like HUL, ITC and its ilk, how long can D2C brands compete with their deep-pocketed rivals and cater to our wellness needs?

The D2C health and wellness brands remain unfazed, though, priding themselves on a few USPs unmatched by legacy players. These include bringing something new to the table (in terms of product or packaging), procuring organic raw materials, producing eco-friendly/sustainable products and more.

These ‘distinctive’ brands are deeply linked to social codes/values such as inclusivity. Besides, they constantly stay connected with their customers via various touchpoints (primarily through company websites and social media channels like WhatsApp, Instagram and more) for better engagement. This digital-first, always-on strategy helps brands with product iterations and trust-building.

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Typically, consumer trust in a brand is built around product touch and feel or physical product experience. However, many D2C brands are digital-first entities, and they have to go about it differently.

“For us, generating product trust is simple. Our packaging reads: Made by two mothers. We do not make any product if we don’t eat it ourselves,” said Shauravi Malik, cofounder of Slurrp Farm, a D2C brand producing healthy snacks for children and adults.

Additionally, D2C brands leverage social media apps like Instagram for powerful storytelling that helps build trust and brand loyalty.

Harini Sivakumar, founder and CEO of the skincare and cosmetics brand Earth Rhythm, also recounted an incident.

As inclusivity is a core value nurtured by Earth Rhythm, the brand employs specially abled people like those with Down syndrome who do the labelling, among other things.

When the founder received a ‘stinker’ mail from a customer because the label was not stuck straight on a product, Sivakumar reached out to her with a video of what went on behind the scenes and also posted it on social media.

“I still remember how she reached out to me through Instagram and other channels to apologise. Of course, she didn’t have to do that. But again, I won customer trust because she and other consumers could see the efforts that went into the products,” said Sivakumar.

The next critical requirement for these D2C brands is to unlock hypergrowth by adopting and evolving an omnichannel approach.

“We are omnichannel [in a way]. We are very heavy on general trade and have access to 2.25 Lakh outlets supported by 2K distributors and 150 masters and supers. So, we are emulating a Godrej or an Emami by building a formidable distribution network,” said Sahil Dharia, MD of Soothe Healthcare, a D2C personal hygiene brand.

Interestingly, the buzz around the D2C health and wellness space and its rapid growth has caught the attention of both FMCG giants and Bollywood celebrities.

FMCG majors like HUL, ITC, Marico and others have made strategic investments in new-age brands or acquired them outright to bolster their play in this emerging category.

Lately, these brands have also seen many Bollywood celebrities don the investor’s hat and become their brand ambassadors.

“Anushka Sharma approached us, saying ‘I use the product and would be interested in coming on board.’ And that was when we said, great! Because you need that sort of marketing noise to make that offline push,” said a buoyant Malik of Slurrp Farm.