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Homegrown D2C Brands See Major Growth in 2020
The year 2020 has shown that the Indian market has a major opportunity for the brands to adopt D2C model if laid out with a proper supply chain system.
Photo Credit : Ritesh Sharma
The Covid-19 pandemic and its aftereffects have surfaced a major supply of home-grown brands to fulfill the customer demands. Brands, majorly in the category of health and nutrition, skincare, among others, have seen a major growth post-pandemic period.
From April to October, skincare brand Super Smelly witnessed growth in revenue by nearly 1500 per cent, “a once-in-a-generation kind of milestone”, the company claims, amid the pandemic. Ayurveda brand Upakarma Ayurveda, which clocked 100 per cent YOY rise in turnover for the past three years, is now witnessing a 60 per cent growth on a monthly basis post the onset of Covid-19. There are other such examples.
The reason the D2C model has been an attractive viable option for the brands is that they are selling and delivering merchandise directly to consumers letting off the hook the dependence on middlemen such as third-party sellers, wholesalers, and retail outlets for distribution, which was, in fact, the case under compulsion due to the need for strict social distancing in the earlier part of the pandemic outbreak.
“By relying on the D2C business model, we recorded a sharp increase in our revenue and a whopping growth of 174 per cent in the first two quarters,” says Dipali Mathur Dayal, Co-Founder, and CEO of Super Smelly. Indeed, relying on the D2C model seems to have had a major pay-off during the period.
Vishal Kaushik, Founder and Managing Director, Upakarma Ayurveda says, “Due to Covid-19, our customer involvement has risen significantly on all our social media handles and website. Our social media handles have been flooded with queries about our products, new launches, and customer feedback. There has been an exponential rise in daily clicks on our website by more than 1000 per cent. Currently, we receive almost 10,000 clicks per day on our website.” Other brands like Mamaearth, Country Delight, Aadvik Foods, IncNut, Zivame, etc. have increased their presence in the D2C segment throughout this eventful year.
Logistics Still A Major Challenge
One of the major challenges in the D2C Model is logistics. Brands face severe competition from e-commerce firms that give faster one-day and two-day delivery facilitates. Most of the time, brands rely on third-party transporters and shipping companies to fulfill their customers.
Super Smelly, for instance, uses third-party transporters; the advantage is that they have various courier partners through which they can cover the entire Indian market. Others like Upakarma Ayurveda have dedicated logistic and warehousing teams to ensure proper deliveries.
It is noteworthy that adopting a D2C brand is a double-edged sword. On one side, it gives the brand greater control over their sales and revenue, on the other hand, it adds to the challenges as you are responsible for the supply chain and last-mile delivery. Accordingly, the speed and efficiency of product shipping would depend.
Bharat Sethi, Founder, Rage Coffee, "At Rage Coffee, we believe that the biggest advantage of being a D2C brand is that you establish a direct connection with your target audience. The tricky part is to keep the supply lines active. As a D2C brand, your business is no longer limited to the manufacturing or development of the product. You are also partly responsible for its supply chain management as well as the last-mile delivery. So, it adds a bit to the challenge.”
Given the D2C segment is still in the rise, most D2C brands, if not all, rely on e-commerce giants like Amazon, Flipkart, Snapdeal, etc. to increase their reach pan-India. They are a reasonable option to scale their business and thus a major portion of their revenue comes from these e-commerce channels.
Rishubh Satiya, Founder & CEO of Fitness Nutrition brand Plix says, “Post lockdown what's happened is basically a lot of brands and people have started to shop online and Amazon has been a great channel partner where we have been able to scale our business a lot more. So, around a significant portion of our business comes from Amazon. We just recently launched on Nykaa, and we're doing significantly well, and soon we'll be launching on Paytm and Flipkart as well.”