D2C Brands: New wave of shopping
India is one of the largest retail markets in the world. It is a nation of more than 1.3 billion people with diverse cultures and preferences. A high e-tail penetration will lead the shift to organized retail in the next five years in India, a trend like in China.
Online shopping in India to rise
India’s rise in online shopping is fueled by a strong internet population of 639 million. Online spending in India is expected to grow over the next 5 years at a CAGR of 35%+ from $39 billion today to $200 billion, especially given the support it has of internet payment infrastructure developments.
The shift in consumption pattern
India is actively undergoing and witnessing an evolution in consumer types. Women have become the new class of consumers and oversee half the online shopping. Consumption trends are also evolving, and large pockets of product and price remain untouched by industry leaders. The traditional players are unable to serve the new-age consumers, who are seeking niche and customized consumers.
Inclination towards D2C
Companies opting for D2C channels have an emotional connection with their consumers as they have a unique brand identity and a value proposition. With access to customer data and leveraging consumption insights some notable D2C companies, for example, Fenty Beauty, Warby Parker have established themselves as the clear brand of choice of consumers.
D2C brands in India
Indian D2C brands operate in a brand starved ‘neo-consumerist’ population and have the benefit of learning from the mistakes of global counterparts. India is witnessing the rise of D2C brands across categories which are estimated to further grow and reach USD 100 billion by 2025. For example, Lenskart, Licious, BoAt, MyGlamm, Sugar, etc are occupying niches and creating aspirational brands and extraordinary value in their sectors.
Future of D2C brands
High levels of funding activity in D2C are expected in the future, the more successful the D2C’s become, the more capital will be developed. There will be an elevation of interested investors in high-quality companies with good growth and a focus on capital efficiency.
The fast-booming internet ecosystem and evolving nature of consumer needs have made new business models viable and have led to the emergence of the D2C distribution channel. It is important to understand the D2C ecosystem, its key drivers, and success factors for the rise of D2C in India. D2C brands have a unique DNA, innovative marketing techniques, and the use of advanced technology. D2C brands operate on a feedback-led model which leads to the rapid development of products to meet consumer needs.