D2C Grew by 36 pc in Volume in Oct-Dec 2020
D2C Grew by 36 pc in Volume in Oct-Dec 2020

In 2020, the COVID-19 pandemic affected industries across sectors. E-commerce as an industry saw a significant uptick in demand during these times. Moreover, the last quarter was extremely interesting, as it showed the real reflection of changing consumer behaviour, and highlighted the actual shift to online shopping even after the lockdown was lifted.

E-commerce in the post COVID-19 and trends witnessed:

•    The last quarter of 2020 saw D2C grow by 36 percent and 30 percent YOY in terms of order volume and GMV respectively, while the average order value declined by 5 percent in Q4-2020 as compare to same period last year
•    Last year, the e-commerce industry reported 26 percent order volume growth in Q4-2019 vis-a-vis Q4-2018. The sharp spike in volume growth of Q4 2020 signifies that the demand for e-commerce has increased significantly in the last year
•    The growth accelerated in light of COVID-19 and the effects of lockdown led to a massive change in consumer habits with many new shoppers and sellers coming online
•    The offline retail continues to have a single-digit growth, whereas the ecommerce sector is growing at a CAGR of more than 20 percent

New segments making their presence felt:

•    Personal care, Beauty and Wellness (PCB&W) as well as FMCG & Healthcare (F&H) were the biggest beneficiaries and saw volumes grow by 95 percent and 46 percent YOY respectively
•    FMCG & Healthcare (F&H) is one of the fastest growing category, with value growth of 94 percent in Q4-20 compared to the same period last year. The strong value growth is supported by the 46 percent order volume growth in Q4 2020. This has helped the category to achieve the highest AOV growth of over 33 percent in the quarter. The category has been able to record strong growth with the increased size of the consumer basket as consumers seek larger packs/ more SKUs. Major FMCG companies in India are now looking to ramp up e-commerce efforts with many adopting online-only or online-first for select brands and products. 
•    Electronics segment was buoyed by homebound consumers turning towards high-end products. The category witnessed 12 percent YOY growth in AOV in addition to 27 percent YOY growth in volumes and continues to drive the highest share of the e-commerce value
•    Fashion and accessories continue to be the largest segment by volume. It reported 37 percent YOY volume growth but AOV declined by 7 percent YOY in Q4-2020 as compared to the same period last year. With people still working from home, the growth of the category is supported by the purchase of lower value products such as comfort wear and loungewear.
•    The lockdowns and reluctance to venture out resulted in many first-time online grocery shoppers, making it an important category for mainstream e-commerce players like Flipkart and Amazon to actively focus and promote the grocery business

Tier-II and beyond continue to drive e-commerce growth:

•    As e-commerce companies start focusing on Tier II and III cities, their contribution to the overall e-commerce pie continues to increase gradually over the last few years
•    During the quarter in review, these cities accounted for a whopping 90 percent YOY incremental volume and value growth
•    As a result, these cities reported significant gains in share of overall e-commerce sales –volume share grew to 46 percent from 32 percent and value share grew to 43 percent from 26 percent during the Q4 CY2020 as compared to the same period last year
•    FMCG & Healthcare is the fastest growing category in Tier I and metropolitan with 150 percent+ growth
•    The growth in Tier II and Tier III is supported by multiple factors like the rising adoption of social commerce, faster and timely deliveries, content in vernacular language, and rising adoption of digital payment coupled with greater internet penetration
•    The mature categories such as fashion & accessories and Electronics & Home appliances have shown maximum growth in Tier III cities. 
•    Personal care is the only category that has reported almost similar growth across regions of India

Direct to consumer getting a new lease of life:

•    Brands are adopting Direct-to-consumer strategy with renewed vigour to develop a strong connect with consumers. The strong volume growth of 94 percent for brand websites showcases immense potential going forward. The growth of D2C is visible across almost all segments
•    Many new sellers chose the brand.com route to drive sales – the number of clients investing in developing their own websites increased by 51 percent YOY in Q3 and 66 percent YOY in Q4 20
•    Personal Care, Beauty & Wellness have been the biggest gainers of the D2C trend. They have been able to create their niche by leveraging the limited online presence of big traditional players. The new-age digital-only D2C brands continue to drive the category growth with 142 percent growth of brand website as compared 76 percent growth on the marketplace
•    Fashion and accessories as a category is witnessing a rising number of D2C brands in India. Brand websites in the category reported a growth of 92 percent on brands websites as compared to the slow growth of just 9 percent on marketplaces. 
•    FMCG and pharma as a category reported impressive growth of 92 percent on the brand website and 62 percent growth on the marketplaces.

Unicommerce, one of India’s biggest e-commerce focused supply-chain SaaS technology platform, and Kearney, released ‘Q4-2020 -E-commerce Trends Report’ for the last quarter of 2020. The report assesses the e-commerce growth in Q4 2020 and deep-dives into the sector-wise analysis. It extensively covers trends related to the overall e-commerce growth, region-wise consumer demand and D2C trends and how it affects the industry in the post COVID-19 world.

Commenting on the report release, Kapil Makhija, CEO, Unicommerce said, “The impact of the COVID-19 pandemic has been widely visible ever since the lockdown was announced in March last year. The e-commerce industry has emerged as the backbone of the retail industry and small and big players have realized the immense potential that e-commerce holds. The e-commerce volume growth continued to accelerate in the last quarter of the pandemic hit year. This report aims to deep dive into interesting insights that will help brands in their ecommerce journey. The report highlights growth of various categories, traditional brands shifting towards online platforms, and its impact on the e-commerce industry. As life gradually returns back to normal, we believe that this report is a reflection of the changing consumer behaviour. We at Unicommerce will continue to simplify ecommerce selling and provide best in class solutions to e-tailers and ecommerce companies across the country.”

Speaking on the launch of report Siddharth Jain, Partner, Kearney said “The Personal Care, Beauty & Wellness category is an incredibly interesting area of growth online, as it has seen stupendous volume growth of over 95 percent in Q4-2020, as compared to the same period last year. Tier II and Tier III+ markets have shown maximum growth potential, outpacing that of Tier I cities. During the quarter in review, these cities accounted for a whopping 90 percent YOY incremental volume and value growth.” 
 

 
Stay on top – Get the daily news from Indian Retailer in your inbox
How URturms Bagged a Rs1.2 Cr Deal on Shark Tank India: A Sustainable Fashion Success Story
How URturms Bagged a Rs1.2 Cr Deal on Shark Tank India: A Sustainable Fashion Success Story
 

In an era where sustainability and innovation are becoming paramount in every industry, URturms stands out as a beacon of change in the fashion world. Founded by Surender Singh Rajpurohit, this apparel brand is on a mission to cater to eco-conscious individuals who refuse to compromise on style or sustainability. With a vision that blends cutting-edge technology and eco-friendly practices, URturms has redefined the narrative surrounding fashion, proving that style and sustainability can coexist harmoniously.

Surender Singh Rajpurohit's journey to becoming the owner of URturms is as inspiring as the brand itself. With a background entrenched in the automotive industry, Surender's foray into the world of sustainable fashion began when he became a customer of URturms in 2018. Recognizing the brand's potential to make a significant impact, he made the bold decision to acquire URturms in 2022, infusing it with fresh perspectives and a commitment to excellence.

Innovative Technology Meets Fashion

At the heart of URturms lies its innovative approach to clothing, leveraging advanced hydrophobic technology to create garments that are not only stylish but also practical and durable. From their signature 30-day no-wash denim jeans to AC cool tech shirts and 7-day no-smell socks, URturms' product line embodies the perfect synergy between fashion and technology. By integrating these cutting-edge technologies into their designs, URturms is revolutionizing the way we perceive and interact with our clothing.

 

"Innovation and sustainability are not just buzzwords; they're the driving forces behind meaningful change in the fashion industry," states Surender Singh Rajpurohit

Optimization and Restructuring

Before URturms made its debut on Shark Tank India, Surender embarked on a mission to streamline the brand's operations and optimize its resources for maximum efficiency. With a keen eye for business operations, Surender reduced the number of SKUs, optimized packaging costs, and trimmed the team from 60 to 9 people. These strategic decisions not only helped improve the brand's bottom line but also positioned URturms for exponential growth and success in the future.

Shark Tank India: A Platform for Success

When Surender stepped into the den of investors on Shark Tank India, he presented a compelling case for URturms, seeking Rs 1.2 Crore for a 2 percent equity stake, valuing the company at Rs 60 Crore. Despite facing tough negotiations and intense scrutiny from the sharks, Surender remained steadfast in his vision for the brand, showcasing its impressive growth trajectory and solid unit economics. His passion and determination caught the attention of the sharks, ultimately leading to a lucrative deal for URturms.

Sealing the Deal

After a series of intense negotiations, URturms secured a deal with Azhar Iqubal, who offered Rs 1.2 Crore for a 4 percent equity stake in the company. This landmark moment not only validated URturms' potential but also provided the brand with the necessary resources and expertise to propel it to new heights of success. With Azhar Iqubal's backing and the exposure from Shark Tank India, URturms' net worth soared to Rs 30 Crore post-deal, solidifying its position as a trailblazer in the fashion industry.

Continuing the Journey

Even after its momentous success on Shark Tank India, URturms remains committed to its core values of sustainability, innovation, and style. With a renewed sense of purpose and determination, URturms is poised to continue pushing the boundaries of fashion while staying true to its eco-friendly ethos. As the brand continues to grow and evolve, it serves as an inspiration for both consumers and aspiring entrepreneurs, proving that sustainability and style can go hand in hand.

URturms' journey from eco-conscious ideals to Shark Tank triumph is a testament to the power of innovation, determination, and sustainability in reshaping the fashion industry. As the brand continues to make waves with its groundbreaking designs and eco-friendly practices, it remains a shining example of how fashion can be both stylish and sustainable. With URturms leading the charge, the future of fashion looks brighter than ever before.

 

Next Story
Also Worth Reading