Identifying the right niche and building a robust delivery system could be the starters for new age brands to make their impact
Amit.Shanbaug@timesgroup.com
With evolving eCommerce market, consumer expectation around service and delivery has also changed. Customers are expecting niche and customised products and services across all categories. This has given shape to the direct to consumer (D2C) movement in India.
Companies too have realized that increased business comes not just from the consumer transaction but the one-to-one relationship that they may develop out of it. Some estimates suggest that in the next three years, the D2C market could touch $100 billion.
So, what is driving demand in this space? Greater customer demand for quality products, and increased disposable incomes are some of the factors driving the direct to consumers (D2C) space in India.
Shantanu Deshpande, Founder & CEO, Bombay Shaving Company explained that India also has the necessary ecosystem to drive the D2C market.
“There is a mobile phone in the hands of a billion people. They have access to content from across the world and aspire for a better lifestyle. India is also going from a bottom heavy to a middle heavy barbell demography, so people are going to be spending more and save less,” he said.
He further revealed that in the last 15 years, a lot of investments have been done from eCommerce companies in creating a robust delivery and warehousing system. “If today D2C brands can reach 98 percent of the pin codes in the country from a singular warehouse. This is due to the ecosystem that has been created in the country,” Deshpande pointed out.
Creating the niche within the D2C space
If the business needs to be scaled up, then exceptional customer experience and flawless execution are some of the key factors that needs to be taken care of.
“Brands would need to concentrate more on finding the right product market fit, as the key to break through the clutter,” Harini Sivakumar, Cosmetic Chemist, Founder & CEO, Earth Rhythm explained.
She added that companies need to figure out what are the touch points and really understand who their consumers are. “You really need to know which pockets to penetrate first and thereby build strategies to move into other tier II cities, which can be supplementary or complementary to each other,” Sivakumar informed.
Keeping acquisition costs low
Customer acquisition would often come with a high cost if brands do not strategise and implement them properly, would be a costly proposition for them.
“You do not have a physical representation in the D2C online space to pitch your brand. The way you position your product, it needs to build in an affinity to that customer into buying your brand. This is the main key factor which you have to look into,” Mathew Joseph, Co-founder, Sleepyhead Home Decor Private Limited said.
It is not just the new start-ups, but even large mainstream companies are entering the space to understand changing customer needs. The reason is simple, they need to understand their customers better to fine tune the company’s future marketing strategies.
Leveraging data for making business decision
Tanvi Malik, Co-Founder & CEO, FabAlley & Indya revealed that for D2C brands the feedback loops around where the interest is coming from and how they can market with more personalised communication.
“What changed from 2020 onwards is that the pandemic has equalised preferences for even tier II and Tier III cities,” she said. D2C brands benefit further from sharper data mining.
Brands can leverage on the existing data which can then be used for actionable insights to help target the customers more effectively.
“All of us want to be closer to our consumers and understand their needs. Your consumers will themselves tell you what the next adjacencies is. It gets defined in the D2C space at least,” Revant Bhate Co-founder & CEO, Mosaic Wellness explained.
Driving the purchase experience
In the D2C space, the seller retains the control of the entire experience. It has played a disruptive role across various industries and changed the way product and services are bought today.
Rhitiman Majumder, CMO and Co-Founder, Pickrr Technologies Pvt Ltd explained that brand needs to understand and analyse the data deeply which will help them plan their inventory. “A lot of existing sellers are not working on their data and may not realise that they are bleeding in certain market. Based on the data, they can decide if there is a need to reject orders in those markets,” he said.
In conclusion, D2C market has managed to unlock new customer relation with the brands that would have otherwise not existed. It has also helped create valuable insights for the brand to scale up their operations by managing their business efficiently.
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Disclaimer: Content Produced by Times Grey Cell
