Insights from India's top profitable D2C brands 🧠
Direct to consumer market in India will touch $100 billion by 2025.
Business meant reaching out to manufacturers, retailers, distributors, supply chain managers - basically, oiling the full engine end to end to be able to send out even a single product in the market.
brands have started to unbundle the supply chain in the last 10 years.
50K digital brands in India
346+ funded D2C brands in India
$4.4 billion in total category funding
So what really changed?
First, need for ownership 🕋
Repeat after me, “You can’t build a multi billion dollar business without owning the customer”. A customer ordering your product through Amazon/ Flipkart/ Nykaa isn’t your customer, it’s theirs.
Every time this customer searches in the amazon search box for a product, you are constantly in the rat race with every other brand on Amazon.
Second, need for data 💰
Marketplaces are known for their notorious behaviour of not sharing data. Know anyone who sells on Amazon?
Ask them. So when brands go D2C way, they bridge this gap by using insights from first-party-mediums and their own to create an endless personalised experience to their customers. (Think about exclusive Sugar cosmetic deals)
Third, CAC to LTV ratio 🔁
These are literally the two most important KPIs that enables brand to sail through profitability.
Now when brands have a close watch on customer buying journey & their behavioural pattern, repeat orders, etc, they use this data to create offers, deals, personalised campaigns, landing pages - they create magic with their customer first approach. (💡Think about WoW skincare’s made for Indian skin products)
So, what’s common between the profitable D2Cs?
Before we talk about this, I want you to focus on the insight of why something works than blindly copying what worked for other brands.
First → solve distribution
Second → push repeat purchase behaviour
Third → improve gross margins
What’s in the future?
The current D2C setup is widely nimble. Brands have discovered new found ways to sell & recuperate from everything that was done wrong by traditional launches. Within the ecosystem, lies 4 models
Pure play D2C
Brands that offer native E-commerce experience through our own channel and have zero offline presence, like licious or Bewakoof.
Brands that go big in their E-commerce experience, through their own mediums along with marketplaces, with little retail exposure, eg SleepOwl.
This where a brand goes heavy in terms of retail experience, think of Nykaa, mixed with digital presence.
This brands are somewhat traditional in their D2C attire. They have a massive offline presence & rely on marketplace for online distribution.
The future of D2C
It beholds many iterations, primarily to address user retention & high competition from legacy players. While having a omni-channel presence is plus to have, to be able to fully grow, brands need to move users to their own mediums to build a relationship. Live commerce, virtual shopping experience through meta-verse, product trials, & live commerce remain one of the most highly betted areas by brands.
Do you want to soundboard with D2C growth leaders?
Top growth leaders from companies such as Licious, Chai Point, Wakefit, Country Delight, mamaearth, Bewakoof, Chaayos, The Souled Store & 1000s of more share their experiences at GrowthX community. Become a member to join them.
Spacial treat ft. Hisham Syed, Ultrahuman
This story is about someone who created an Ikigai diagram for himself.
If you’ve got 3.41 minutes to spend on the internet, we suggest you listen to this heart warming story of “Hisham 4.0” & how his passion for work and fitness collided at Ultrahuman.