Is India going the D2C way for brands?
Experts say the trend of Direct to Customer brands looks bullish as Internet penetration is increasing and first-generation online shoppers are evolving
It looks like brands in India are breaking up with the Amazons of the world. There has been an explosion of D2C (direct to consumer) brands globally and India is also catching up fast with them. Towards the end of last year sports brand Nike decided to stop selling their goods on Amazon as a part of their revamped retail strategy, a lot of brands followed suit. In India however, brands didn’t completely move out of popular eCommerce platforms but started their own identity online to connect directly with their consumers.
“The adoption of D2C will be faster than we can even imagine, especially in the FMCG category. The trend is very bullish as Internet penetration is increasing, first-generation online shoppers are evolving, the fear to shop online with new cohorts is fading, the consumers are buying everything from beauty products, glasses, mattresses to vitamins and contact lenses, is disrupting established industries and cutting out the retailer in order to own the end-to-end relationship,” said Ankur Pujari, co-founder at strategy-led digital agency HyperConnect.
“Brands are utilizing the eCommerce space for a long time but they have matured now and are spending more on online sales activities. The spending is more on Content Generation, Social Media Engagement and Online Advertising. Moreover, they are now also focusing on ROI, through understanding online measurement parameters,” said Chandan Bagwe, Founder and Director at C Com digital.
An increasing number of brands are investing in the same.
“Today we already see over 100 different internet-born D2C FMCG products listed on various eCommerce portals. The model is a natural progression from shifting the online shoppers to buy from the brand's website and own the experience, data and lifetime value of the customer,” said Pujari.
Brands like Dollar Shave Club and Casper Mattress are already a huge success in the segment and now there are traditional brands such as Nike and Kellogg’s also joining the D2C space directly through their website to own the entire experience and trust.
In India too there are a host of online born D2C brands that have made their mark across categories. Brands such as Beardo, Mama Earth, Ustra in Personal Care, Wrong, FabAlley One Plus, BoAt are already operating in the space.
How is it working out for brands though? Credibility, personal touch and useful data collection are some of the reasons why brands are going the D2C way.
“When we sell through Amazon or Flipkart they do not share the customer insights with us, whereas on our own platform we also own the data, we know who our TG is, what their age is, which part of the country they belong to, what they like and so many other details like that. As we know customization is the future these details help us target better and offer them customizations according to their preference,” said Ashutosh Valani, Co-founder at men’s grooming brand Beardo.
Interestingly, Marico is also working with HyperConnect to start their own D2C brand. The plan, however, is still in its early days with Studio X – Marico’s D2C brand. “We have begun with understanding the voice of consumers in the new range of products we are launching, their ingredient associations through our US-based analytics partner Kvantum as they bring in the experience of working on some of the most cutting edge brands in the US markets. Followed by analytics, we are devising a content-led strategy that will drive commerce, right associations to drive the image and lastly a focused performance and influencer strategy to deliver high ROI,” said Pujari.
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