The pandemic of 2020 has paved the way to establish India as an important landmark for various industries. Gradually growing into a hub for one of the emerging sectors - direct-to-consumer (D2C) companies have been significantly boosting to create a positive impact. The development of e-commerce and new AI-powered technologies have accelerated D2C business growth.
Pertaining to the idea, the fashion industry has grabbed the lead in this area along with several segments that are performing well in this space. The discretionary expenditure in the fashion segment is higher than in other D2C industries, but it also increases competitiveness in the D2C fashion market. According to a study, the D2C sector's development potential is strongest in the apparel industry.
By 2025, 77.6 percent of the online D2C fashion industry will be made up of the categories of clothing and footwear, which are the most important ones in the fashion sector. The rise of e-commerce, social media, and new technology has made this process immensely easier for businesses. In today’s era, people want more individualized goods and services, which has resulted in a substantial shift in consumer behavior since the pandemic.
Rise of D2C Fashion Brands
The new generation of Indian consumers now shops only at D2C fashion brands. Fashion brands can perform incredibly well by adopting the D2C model since it gives them complete access to consumer data, superior control over the customer experience, and the opportunity to foster and capitalize on brand loyalty. By investing in cutting-edge technologies like artificial intelligence and setting up a reliable supply chain, D2C fashion firms may effectively plan their long-term growth strategy.
With the D2C model, businesses have total freedom to use chatbots to engage with customers, respond to their questions, and connect with them. Through conversational commerce, a further application of chatbots, businesses are even using social media sites like WhatsApp, Facebook, e-mail, and Instagram to offer goods and services to clients directly. Consumers increasingly receive curated handwritten notes and personalized messaging that offer them a special perspective and a sense of connection to the business and the brand. To stand out in the growing market, several companies employ community-building tactics.
The Inclination of Consumers Towards D2C Businesses
Nowadays, consumers rely largely on internet fashion since it is more affordable, convenient, and provides immediate gratification. Compared to other industries, fashion has an edge in terms of logistics - shipping to thousands of pin codes across India, which is not necessarily the case for high-end watches, jewelry, electronics, and furniture. Due to social media exposure, customers are more aware of their needs and open to discovering new regional brands that operate on direct-to-consumer (D2C) channels. This has made it possible for D2C and fresh start-up brands to compete with established ones in the fashion industry. Above all, the simple exchange, refund, and return policies have provided online fashion shops with the best means of gaining the trust of their customers.
In the end, these elements are luring more investors to fund domestic fashion firms. They are also doing so since a lot of new start-ups are using their client base and social media presence to dominate the Indian markets. They surpass the Rs 100 crore revenue milestone before the established brands.
Expansion of Consumer Base
With fashion D2C brands intending to increase their presence in Tier II and Tier III cities after growing with good efficiency in Tier I cities, smaller towns have promise, and businesses should make use of this to investigate and expand their consumer base. Constantly working to adapt to new and developing trends in order to stay one step ahead of their rivals, personalization of items is on the rise.
In the last two years, D2C brands have undoubtedly been able to boost engagement and bring in more customers, but the next challenge will be to maintain them and earn their loyalty. The aforementioned elements point to the D2C fashion industry's enormous potential, which, if realized, will set the tone for the next ten years.