The direct-to-consumer model is seeing a surge in popularity as small brands use it to survive and thrive in a market dominated by giants.
Post-COVID, consumers â€“ with an eye on safety and convenience – are choosing to shop on e-commerce platforms and online D2C channels, which has widened the growing opportunity for D2C brands.
These brands bypass the conventional method of multiple supply chain partners, and reach their target audience directly by marketing and selling products directly to customers. A report by Avendus Capital on D2C brands in India stated that the addressable market size for this industry would be $100 billion by 2025. Another report by PGA Labs and Knowledge Capital suggested that investors had put in $1.4 billion into D2C companies between 2014 and 2020. The sector saw an investment of close to $ 417 million in 2020.
India has more than 600-plus D2C brands, including well-known names like Wakefit, Licious, Wrogn, Mamaearth, MCaffeine, and Mom’s Co. Many others are waiting in the wings to become big businesses: NuttyGritties, Itsy Bitsy, Cosmix, and Captain Zack. All of them plan to scale up their e-commerce channels to capture growing consumption in India. Several brands such as boAt, Wow Skin Science, MCaffeine, and Wakefit have been profitable from the very beginning.
How does the market dynamics change as companies move from B2C selling to D2C selling?