How Offline to Online Channel Shift by Consumers Fueling D2C Growth
How Offline to Online Channel Shift by Consumers Fueling D2C Growth

Consumer goods maker Hindustan Unilever shared that a significant part of direct-to-consumer brands' growth is driven by existing shoppers shifting to online channels instead of incremental growth.

"If you look at the total FMCG industry, direct-to-consumers (D2C) is still a very small part of the total mix," said Sanjiv Mehta, Chairman, HUL. "A large part of the growth that is coming to many of the e-commerce players are not consumer growth; they are channel shift growth."

D2C brands refer to businesses that have most of their revenue or customer acquisition from direct-to-consumer online channels or those started with an online-first distribution before going omnichannel.

The maker of Dove and Rin said it has an annual business of Rs. 50,000 crore, and if it grows by 10 percent, an additional Rs. 5,000 crore will be significantly higher than dozens of D2C brands put together.

"You may find some time that certain trends are captured by some company before us and so be it. Not all the trends would be captured first always by us and we could be second and still be better,” Mehta further said. 

Nearly 590 new D2C companies have entered the Indian market in the past three years, and they have raised Rs 6,700 crore altogether, according to Tracxn, a market intelligence provider of private company data.

With consumers' shopping behavior tilting towards online platforms post Covid-19 outbreak, experts said that D2C brands have already built reasonable heft in the sub-category by playing the role of category creators and disruptors. This is against a preconceived notion of such companies having the limited potential to scale.

"D2C companies are now looking at adjacencies, geographical expansion and omnichannel to achieve scale," a recent report by financial services firm Ambit. "Most D2C companies are guiding for 6-8 times revenue growth over the next 3-5 years, signifying share gains largely from incumbent players."

READ MORE: Trailblazing D2C: How the Full-Stack D2C Enabling Pioneer, GreenHonchos, Helped Brands Generate over Rs 10,000 mn+ in Revenue

Several mainstream companies have acquired online-first brands in the past three years. For instance, Colgate Palmolive bought a stake in Bombay Shaving Company, Emami purchased a majority stake in The Man Company, and Parle Products invested in health food company ASAP Bars. Unilever Ventures has a minority stake in personal care brands Phy, while Marico has acquired a stake in Just Herbs and Beardo.

 
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