What is direct-to-consumer (D2C)?
Direct-to-Consumer or popularly known as D2C is a business model in which brands generate the majority of their revenue or customer acquisition through online channels or began with digital-first distribution before transitioning to omni-channel. India boasts 600+ D2C brands, and strong growth suggests that the total target market will be worth $100 billion by 2025.
The D2C wave in India began long before Covid-19, when some data-driven brands realised that a direct relationship with consumers not only increases sales but also develops the brand as a whole. The pandemic has only accelerated this process, emphasising the importance of direct engagement more than ever before.
Major trends influencing D2C boom:
- Budget-friendly smartphones and low-cost internet data
- Rise in e-commerce and online shopping adoption
- Strong payment, logistics & warehousing, and delivery ecosystem
- Innovative and personalized marketing strategy
- Community development and a strong tech-led experience
- Agile supply chain using AI & ML for Demand Forecasting, Inventory Management etc.
What does the future hold?
We can see a positive growth trajectory for the Indian D2C ecosystem with rising social media consumption and a significant shift to online shopping. Recent fundings, unicorn status, consolidations, IPOs, and market reactions are evidence of what awaits others who enter and adopt this business model.
Businesses will look to strengthen their product portfolios and add multiple categories under their specialisation in order to ensure consistent growth. We will also see the adoption of cutting-edge data analytics technology, as AI and machine learning will play an important role in automating processes to ensure customer centricity.
Many D2C brands will transition from a digital-only presence to an omni-channel strategy in order to scale.