The Indian D2C Industry's Future

D2C businesses in India

Consumer electronics, health care, personal care, supermarket and gourmet are just a few of the various industries where D2C brands are offered. India's D2C programme has received excellent backing from both large and mid-sized investors. As a result, the early stages of the D2C brands saw an increase in funding. In 2021, there were about 105 agreements worth 2.14 billion dollars invested in D2C brands. Several D2C brands in India have reached the income threshold of one million Indian rupees in the three to five years since their launch.

D2C firms like Lenskart, Licious, BoAt, and Mamaearth fill niches, create aspirational brands, and contribute remarkably valuable contributions to their respective sectors. Consumers in Generation Z who largely rely on digital media for news and trends are more willing to experiment with new companies and conduct online shopping. As a result, personal purchase patterns are growing, which is perfect for D2C's targeted and personalised purchasing proposal.

D2C sector expansion

The ease of setting up online stores is one element fueling the D2C boom. This was made feasible because to start-ups and new-age businesses that worked on constructing a blockchain that was better able to close logistical gaps and gave them the ability to set up online storefronts. Despite this, D2C businesses are unable to rival reputable e-commerce giants like Flipkart and Amazon. In reality, the vast majority of them conduct their business online. Even some businesses make more money from markets than their own platforms.

In comparison, branded websites increased by more than 80% in the fiscal year 2022, while marketplaces only rose by 59.6%. Moreover, huge physical retailers are increasingly selling through brand websites. In order to create a successful brand relationship, product and marketing innovation based on customer input is crucial.

Key issues that D2C brands must deal with

Product and marketing are the two main areas of concentration for direct-to-consumer brands. They ought to look into contracting with partners who have industry knowledge to perform other responsibilities. E-commerce growth can be hampered by the difficulties D2C firms had during the initial breakthrough stages, from low sales conversion to logistical snags. The following three issues confront D2C business models:

Push for Sustainability

Most Gen Z and millennial buyers are interested in more than just purchasing a product. They consider how their purchasing choices will impact both the present and the future. They favour purchasing from firms that care about the environment because of this. It should come as no surprise that more direct-to-consumer businesses will prioritise sustainability over the next ten years. In order to forge a deeper bond with their customers based on optimism and happiness, brands will also adopt missions that draw customers from a variety of socioeconomic backgrounds.

Acquisition Costs

Social networking is the most effective channel for D2C businesses to reach new clients. However, the price per thousand impressions on social networking sites has increased as the level of competition has increased. More businesses are vying for consumers' attention. Companies could invest a lot of money in one channel without realising it doesn't attract high-value clients since platforms don't exchange data in the same manner.

To determine where their customers are coming from, D2C marketers require sophisticated systems that can gather and combine user data from a variety of channels. Given that clients use multiple channels, the majority of marketers don't want to manually collect this information because it is difficult and prone to mistakes.

Omnichannel Approach

Customers now days favour businesses that provide a unified and smooth experience throughout all touchpoints. A potential consumer can obtain a thorough image of the items, their costs, and the various ways they can interact with the brand by visiting the website of the company. However, not all Indian consumers choose to shop online. Therefore, brands should employ an omnichannel approach if they wish to succeed in a hybrid ecosystem. In order to increase brand recognition, connect with customers online or in person, and build positive relationships with them, this strategy combines online and offline distribution methods. The usage of technological platforms like Rubicon is essential for ensuring that e-commerce stores achieve the objective of omnichannel purchasing.

Capital for working purposes

D2C businesses frequently divide their markets into different zones, each with its own sales staff and demand planners. These teams create their own sales forecasts, which may not accurately reflect the patterns of demand. They also struggle with inventory visibility across the whole supply chain. Furthermore, bias or human error are always possible and might lead to overstocking and lost working capital. Therefore, inventory needs to be optimised to make the best use of the working capital that is available.