“If I were to try and sum up the last decade of E-commerce as concisely as possible, I don't think I would be able to express it better than one movement - D2C or direct-to-consumer” says Dr. Somdutta Singh, Founder & CEO Assiduus Global. The COVID-19 pandemic has radically restructured the way many sectors and industries are functioning right now and constantly renovating. Conveniently, though we have learned methods that have helped us navigate through these unprecedented times, one of the most important approaches have been to place an emphasis on digital interaction with audiences.
Do you remember HomeShop 18? This channel is a great example of D2C that was once associated with mere catalogues and infomercials, today D2C brands are household names. Aspirational brands such as Licious, Zivame, Mamaearth, Sugar and Country Delight are not just creating exceptional brands, carving specific market niches, but are also presenting exceptional value in their relevant quarters. With a digital-first approach, these brands became retail behemoths by avoiding traditional brand conventions and innovating the way brands are built and marketed.
According to an Inc42 Plus report, the D2C sector in India will be worth $100 billion by 2025 which in 2019 stood at $26.8 billion. D2C brands are smartly targeting the snowballing category of digital shoppers, engaging with them directly to identify gaps and create niche products for them. Unquestionably, consumers are clearly embracing them. A distinct example of this is consumer electronics brand BoAt Lifestyle that crossed the Rs 100 crore in revenue mark within just two years of inception in 2016 and closed last year at a turnover of Rs 800 crore, taking on a procession of legacy brands head on.
Why Having A Digital 1st Mindset Is So Crucial?
The math is very simple. Gone are the days when someone looking for a product will head out to get it from a store. This means, if you want something directly in front of your consumers and potential customers, you need to be on the digital forefront.
As an E-commerce entrepreneur and founder of several D2C brands, at Assiduus Global, we work with D2C brands because in a D2C channel you are able to pass more value back to the consumer by skipping multiple layers of distribution that traditional brands go through. Here, there is just one layer between you and the consumer. You can have much more inventory without worrying about working capital. It cannot get any simpler can it? Also, as an investor, I understand how these businesses are very capital efficient with high growth, high margins and that’s what attracts me.
Brands are constantly looking for end-to-end solutions, intelligence and insights; help with launching, scaling and expanding globally and finally forecasting and mapping. At Assiduus, we provide all these things and much more and this process becomes seamless with D2C brands. D2C brands symbolize the innovative pledge of digital commerce — the ability to cut out middleman and go straight to the customer. By dodging the traditional store model, it enables brands to have absolute control over how they reach their market.
Although the internet made an advent into our lives 28 years ago and Amazon went public to the masses more than 22 years ago, there still are tons of brands that have not made the changeover to being digital. E-commerce and digital D2C are not new concepts, but right now, the massive window of opportunity that they provide is closing, and it’s closing rapidly. The way I see it, in the forthcoming years, the leader in every market vertical will either be an entirely digital direct to consumer brand or a digital-first one. If traditional direct to consumer brands cannot make the transition promptly, it's kind of a judgment for them.
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