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Independent markets commentator. Media columnist. Board member. Corporate & Startup Advisor / Mentor. CEO coach. Strategic counsel for 25 years, with leading corporates across diverse sectors including automobile, e-commerce, advertising, consumer and financial services. Works with leaders in enabling transformation of organisations which have complexities of rapid-scale-up, talent-culture conflict, generational-change of promoters / key leadership, M&A cultural issues, issues of business scale & size. Understands & ideates on intersection of BFSI, digital, ‘contextual-finance’, consumer, mobility, GEMZ (Gig Economy, Millennials, gen Z), ESG. Well-versed with contours of governance, board-level strategic expectations, regulations & nuances across BFSI & associated stakeholder value-chain, challenges of organisational redesign and related business, culture & communication imperatives.More From The Author >>
India’s Destiny With D2C
Technology-led disruptions help enhance the online shopper experience from awareness to discovery to purchase to post-purchase brand engagement. Technology adoption to build search tools using voice, regional languages and image-based search is helping reach a wider set of
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The Indian market is one of the fastest-growing consumption markets. The Indian economic growth, added with its digital adoption is breaking many a divide – geographic, linguistic, gender, and many more. Yet some of the divides have not been bridged yet, leaving it either as a business opportunity or an unplanned seller-bias. The Indian e-commerce market has benefited from the Jiofication that we have seen over the past few years. Covid’s disruption of normalcy nudged faster digital adoption. This probably helped consumers’ willingness to experiment with newer products and newer methods of shopping – online.
It has added 50 million shoppers over the last two years, primarily from smaller towns and geographically remote PIN codes. Most of these newer shoppers are Gen Z, which could positively influence categories such as electronics, fashion, etc. Today, the ecommerce sector covers over 80 per cent of Indian PIN codes. The number of internet users in India is expected to cross 100 crores by 2026. Assuming that even a quarter of them use online shopping, it could propel the Indian ecommerce market as a larger (volume) consumption market. Various market trend research suggests that Indian ecommerce could cross $160 billion of trade.
*Demand, Data, Digital, Disruption
In the digital era we live in, the number of channels that brands have to engage with consumers – both offline and online – is only increasing. Added to the age cohort, the user experience expectations vary as well. Add to this mix, the complexities of the multilingual market that India is. It is not an easy walk for the brands in telling their story to an audience whose attention span is low, and who expect strong brand-love too. No doubt that the success of D2C needs to leverage its digital strength to analyse voluminous amounts of data that they scour about their customers. It has been helped by the digital payment infrastructure that India pioneered as a digital public good.
Over the past two decades, Indian brands have evolved in the way they understand consumers, serve them, and retain their brand affinity. It has been aided by the strength of technology and digital engagement. Data is the centre of attention for brand development. The brands are understanding consumers, not just from physical world consumer research, but also in understanding how the consumers use the digital world to make product decisions. The successful brands have used data sciences to generate data-driven personas that help them steer their product offerings and marketing mix. This has been helped by online engagement of brands and consumers on the social media, OTT and other ecommerce platforms.
Technology-led disruptions help enhance the online shopper experience from awareness to discovery to purchase to post-purchase brand engagement. Technology adoption to build search tools using voice, regional languages and image-based search is helping reach a wider set of consumers. In addition, some of the brands have started experimenting with augmented reality (AR), virtual reality (VR), and artificial intelligence (AI). 5G could further add to video commerce possibilities. These made-in-India-for-the-world products help in better consumer engagement, and brand imagery dissemination.
The government’s policy-innovation with the development of Open Network for Digital Commerce (ONDC) democratises ecommerce in India. It removes many divides that were in favour of only the large platforms, and now allow smaller brands also to participate in being accessible to the consumers. With newer emerging technological possibilities in Web3, D2C players would be able to customise or personalise solutions that cater to each customer. This is why some of the early adopter brands have started setting up their virtual-stores, and also experimenting with NFTs.
Despite the D2C offerings, some brands have experimented with and are in the process of attempting omni-channel offerings. The physical stores work as brand enhancement tools, while for some, they play the role of product display and awareness generating techniques. Aided by India-focused supply chain policies, and in improved inter-city transportation that’s drastically helping in smooth movement of people and cargo, it is also aiding a better and efficient supply chain framework. In short, the time-to-consumers is reducing for brands.
With all the advantages of the Indian digital ecosystem, and the consumption-focussed market we have, it’s all good going for D2C brands. But there is a counter view. For consumers love to experiment with newer products and brands, including the surrogate categories. While this might sound like disloyalty, it is simply that customers are not loyal to just one brand. They are in experimentation mode – call it, unloyal, if you so will.
It won’t be easy for brands to get their consumers to stay loyal to them for long durations. The trust aspect of consumers about their brands would need to be tested for longer periods. With evolving mediums, consumers are experimenting and even flirting, with newer offerings. Marketing promotions and sales offerings could enable consumers to experiment with newer brands. Probably the popular marketing rule of 20 per cent of customers accounting for 80 per cent of the turnover might move to a 50-50 rule, where loyal and unloyal consumers will both generate same volumes and business value.
While the D2C India concept has been proven, individual brands can’t yet rest on their current valuations, or their current pitch deck. Indian consumers have shown their tenacity and willingness to experiment with options, and could change their mind in an instant. That’s where brands have to do more with their consumer cohort. Call it lasting consumer engagement.
Author, Policy Researcher & Corporate Advisor
Twitter : @ssmumbai