2023 will be the year of D2C: 5 Trends Brands Must Know
2023 will be the year of D2C: 5 Trends Brands Must Know

2022 saw one of India's most talked about festive seasons in recent years. Last year’s sales number set newer records and an increase in demand from Tier II and III cities. Redseer claimed that during the one-month sales period in India, e-commerce retailers selling on Amazon and Flipkart generated sales worth Rs 76,000 crore, which is about twice as much as the pre-pandemic 2019. On the other hand, the Indian D2C industry continues to grow, buoyed by rising awareness and consumers’ willingness to experiment. Projected to grow by 21 percent, the D2C industry size in 2023 is all set to cross the $66 billion mark.

This data offers evidence of the evolution of the Indian e-commerce environment, and emerging trends have the ability to influence how the country's direct-to-consumer (D2C) market develops and increases its share in overall retail sales. If you are building a D2C brand, here are 5 trends that can help you formulate your strategy for a successful 2023.

1. Fashion Brands Should Focus on ‘Bharat’

According to reports that looked at sales over the Diwali season in India, Tier II and III cities are the main driving forces behind these purchases, accounting for 64 percent of all consumers who made transactions. During this phase, almost 125 million customers placed orders across platforms, helped by Tier II cities, and growth was driven by fashion in these markets. One of every five orders placed here was for ethnic wear like a Kurti or saree. Tier II and beyond cities growing appetite to shop online is a trend that’s here to stay and D2C brands should not miss this. It can help them increase both sales and customer base. Meesho’s recent sales saw nearly 60 percent of sales coming from Tier IV cities. Demand from ‘Bharat’ will only rise and D2C brands will play an important role in fulfilling this demand.

2. Local Marketplaces Attract International Brands

The beauty and personal care sector had a declining trend in 2022, with the market contracting by almost 11 percent year over year as a result of lower expenditure after the pandemic. However, online stores like Nykaa attracted at least 30 foreign brands to India, which currently accounts for 15-20 percent of its total income. At least 60 percent of sales were recorded from Tier II and III cities in the beauty and personal care market. In 2023, the BPC segment is expected to grow to $27 billion, D2C brands can plan ahead and benefit from this surge.

3. Consumer Durables will Continue to Thrive

Last year has been healthy for the consumer durables sector despite rising inflation. The Consumer Electronics and Appliance Manufacturers Association reports that sales have increased in value and volume by over 30 percent in 2022. Sales of entry-level products, however, decreased by 10-15 percent, which is largely related to the customer's tendency to upgrade. However, the desire for durables that are simple to use, smart, intuitive, and sustainable has increased significantly and, in 2023, brands selling these goods stand to gain.

4. Tools are your Best Friend - Use Them to Increase Engagement and Conversion

Shoppers love to bargain. Earlier, it was possible only when selling offline, but with the latest tools, you can let your shoppers bargain online too! Kari by Kriti uses this selling technique efficiently. Brands are also adopting gamification tools to increase engagement and sales. Tools like a discount spin wheel can be used to surprise users with an instant discount and further improve sales. A study that surveyed popular Shopify stores found that at least 66% of them use at least one engagement tool.

5. Alcohol and Beverage Brands Run Smooth with New Launches

Despite the discussion about inflation, 2022’s festive season saw no decline in sales or consumer satisfaction for alcohol and beverage firms. In order to command premium pricing, brands like Radico Khaitan and Bira91 have been concentrating on acquiring their regular products as well as developing and inventing new product mixes. In order to attract customers and further influence the market, these brands actually introduced new products throughout this season. New and legacy brands that plan their new product launches well in advance and have a robust supply chain stand a greater chance to corner a larger market share in 2023.

With the pandemic and supply chain disruption behind them, e-commerce companies in 2022 demonstrated how the festive season was effective in reviving the direct-to-consumer sector in the Indian market and it is important for brands to use it as a blueprint for succeeding in 2023.

Stay on top – Get the daily news from Indian Retailer in your inbox
Also Worth Reading