D2C is expanding like never before!

The Direct-to-Consumer industry in India has witnessed a spiking shift in retail. The traditional retail model saw manufacturers reach out to wholesalers, distributors, and retailers before finally reaching their products to end users. D2C helps businesses to cut out the middlemen and reach out to consumers directly by understanding their requirements.

D2C in India has seen a dynamic change in the last couple of years, the pandemic being the major reason. The pandemic did not just make us all adopt new shopping preferences but also made brands reassess, upgrade and elevate their online stores or services. According to a report by IBM, e-commerce adoption in India has exponentially accelerated by 5 years because of the pandemic. No surprises here!

Factors that have made D2C a highly competitive market - why is it so huge?

Several brands have hit the fast lane in the past couple of years and today. India, the world's fifth-largest retail destination, has over 800 successful D2C brands with a sector valuation of $44.6 Bn (2021 KPMG report).

India is now home to about 600 D2C brands with estimated combined revenue of over ₹14,000 crores.

But how did we get here? What has made the Indian D2C sector such a fiercely competitive market?

Conscious Consumerism

Admit it; you definitely love to put up a story on Instagram of the package you have waited to receive.

Today, brands strive to offer customers a holistic buying experience instead of just selling products through the online marketplace. Consumers are more or less looking for the overall aesthetics of the packaging and how environmentally friendly the product is. Consider skincare or beauty products, for example; there's a rise in the demand for organic/natural ingredients with sustainable packaging and more! This further proves that consumers expect more than just a package on the doorstep.

Reaching a large audience with more accessible internet

Consumers spend more time online, and D2C brands correctly leverage the internet to reach a larger audience. Consumers' growing screen time has allowed brands to use the internet as a key platform to position products.

More tier 2, 3 and 4 cities that were previously deprived of high-end brands are now adding up more to the D2C sector of India because of internet and social media marketing. With online marketing tools, brands are now accessible to the target audience across the country without limiting their presence to limited offline stores.

Ease of setting up a business

Businesses of small and medium scale have also set up their online stores and can now reach out to audiences across the country. With internet building blocks to cut out on middlemen and reach audiences directly, brands have been relying on virtual platforms such as Facebook, Instagram and even WhatsApp to drive more leads.

Now, the question arises, is there really a need to be disruptive?

According to a finance express report, several D2C brands in India have crossed Rs 100 crore in revenue within three to five years after the launch. That said, it is true that the competition is fierce, with consumers' growing preferences and more time spent scrolling through e-commerce sites.
Because it is tough to establish a brand's authenticity and stand out from the competition, do brands need to develop disruptive strategies?

(Yes!)

Here's how D2C market leaders are coming up with disruptive strategies, which may help you too.

While legacy brands have moved their marketing spends to online channels, new age brands are challenging the sector & here are some disruptive strategies they are adopting which might help you:

• D2C brands in India have innovated across categories, majorly seeing a hike in skincare, home and apparel products. Most of these brands keep Gen Z consumers in mind and revolve branding around uniqueness that could help them stand out in the long run.
• What makes successful D2C brands true disruptors is that they have cracked the code to effectively reach the audience with the right balance of customizing products, digital penetration and consumer engagement.

Great product & Smooth supply chain is the key!

It's noticeable that the brands which are targeting the right consumer market, keeping in mind not to lose the originality of their products, have succeeded in the longer run. Whereas a stronger, smoother supply chain in the D2C segment is an overlooked topic, some brands that stepped up to manage a great distribution strategy have disrupted the market.

Great product does not only include finding the right niche of market and spending on R&D but good design, great packaging and overall consumer satisfaction. For D2C brands to lead the segment, having a strong supply chain brings out far-fetched advantages. Making the product easily accessible to consumers is what brands should focused on, by simply making the tech-driven products available on E- commerce sites, apart from their own online channels.

With the ever-changing landscape of the D2C sector, the competition is leaving no stone unturned when it comes to capturing the interest of potential customers. If you really want to compete as a disruptor, it is crucial to have expertise in both of these areas, i.e., great products and an even greater supply chain.