For a new D2C brand or one planning to enter into the segment, certain things need to be kept in mind. The rapidly booming space in India has received mixed results globally. Despite being an attractive space with the freedom to control one’s entire distribution, the model is not without perils.
Notable global brands, on one hand, like Warby Parker, Fenty Beauty, Perfect Diary, Dollar Shave Club have seen phenomenal results, while many brands like Eleven James, Cocodune, Raden, etc. though had done fairly good initially ultimately missed the mark. Consumer demands, costs, awareness are some of the common challenges. Let’s look at how Indian D2C brands are tackling these challenges and what the future holds for the D2C sector.
As per data shared by KPMG India, currently, over 800 D2C brands are operating in India. D2C players have raised an excess of $2.5 billion since 2014, making the D2C sector worth $44.6 billion in India as of 2021. It is expected to reach $100 billion by 2025. In the last couple of years, several D2C brands such as Boat, Wow Skin Science, Lenskart, Licious, MamaEarth, etc. are occupying unique niches and building a strong brand experience for the consumers.
Several factors are enabling a rise in the D2C segment. The larger factor in play is the 700 million-strong internet population which is growing at 24 percent. Secondly, the Covid-19 pandemic has further accelerated online reliance willingly or unwillingly. Online spending in India, which expected to grow at a CAGR of over 35 percent from $39 billion today to $200 billion over the next five years (supported by internet and payment infrastructure developments) is another crucial reason.
Since D2C is still pretty much in the nascent stage, the above scenarios will prove to be just right for the D2C companies to explore and experiment with the market to find the right formula. However, even though the macroscopic factors may be in favor, obviously, D2C firms individually have to go through various challenges to succeed in the segment.
Riding on the D2C boom, In FY21, a Bengaluru-based D2C company Wakefit recorded 2X growth, clocking Rs 410 crore of revenue. Continuous and extensive focus on research and innovation, customer consciousness, personalization based on feedback are some of the reasons that the company cited for the growth. Wakefit pointed out that customer acquisition and retention along with a need for strengthening logistics infrastructure especially in remote parts are some of the major challenges it is facing.
Ankit Garg, CEO and Co-Founder, Wakefit stated, “We have invested in Capex regularly to strengthen our operational capabilities and have also set up a sleep laboratory at the factory to ensure our products are extensively tested in a simulated environment. Despite the challenges, we believe there are a plethora of growth opportunities within this segment.”
Another, a plant-based nutrition D2C brand Oziva has claimed to have grown 4x in the last 12 months. Currently, their annualized turnover is between Rs 150-200 crore and the company is looking at growing 2-2.5X YoY. The company has also said to have raised $12 million this year, $17 million to date.
The Mumbai-based company is allocating the funds in five areas: scaling the team, category expansion by investing in R&D, brand building, expanding offline presence, and scaling technology platform to provide more value-added services.
“2021-22 so far has been very promising as well. We have always focused on providing value and holistic solutions to the consumers which have helped us grow over the past year,” says Aarti Gill, Co-Founder and CEO, OZiva.
Another home appliance D2C brand Candes has clocked revenue worth Rs 60 crore in FY21 and aims to achieve Rs 200 crore revenue this year. The products manufactured by the company are low-priced as compared to larger companies like Crompton, Luminous, Usha, Bajaj and more. For instance, the fans by Candes start from Rs 1,200 whereas those sold by others start from somewhere around Rs 1,500. The company attributed 'sincere pricing' and 'well-planned strategy as reasons behind such cost structure from the company’s side.
The one major impact of the D2C model of business is on the brand-retailer relationship. If a customer visits one of the retail outlets for a brand, there are hardly any data available for the company to customize. However, if the customer goes to the website – there are over a dozen touch-points for the brands to connect with the customer: email, Whatsapp, SMS, Instagram, etc. (omnichannel). However, brands would rather want to look at their retailers as channel partners as D2C customers can be redirected to the nearby localized retailer stores for order fulfilment.
Harsha Razdan, Partner and Head, Consumer Markets and Internet Business, KPMG in India said, “D2C model helps in providing personalized products and services to the consumers and improving customer satisfaction. An omnichannel presence further enhances customer experience, leading to increased customer stickiness. Beauty and personal care along with food and beverage are segments that have witnessed a tremendous rise in D2C brands.”
In fact, ‘omnichannel’ has been one of the trending words in retail circles. For the Uber consumers living in Tier-1, Tier-2 cities, customer experience may be a greater priority than the price. Moreover, with the rise in influencer marketing, customer experience is becoming paramount for almost everyone. Likewise, we see almost every retail brand onboarding itself into the omnichannel front.
D2C brand Pee Safe, which has a strong pan-India footprint in more than 10,000 stores in over 100 cities, has been growing its omnichannel presence as well. The idea behind the omnichannel is to build touch-points with the customers anywhere and everywhere possible.
“It is important for us to reach customers wherever they are,” said Vikas Bagaria, Founder and CEO, Pee Safe. He added, “Hence, this (omnichannel) strategy works well for us and we have been seeing great traction across both online as well as offline retail channels.”
Future Of D2C
Pandemic has reminded that nothing, including in business, is certain. And, as we saw, the brands have been trying out different strategies in costs, retail experience, doing the needed research to provide the specific personalized service, etc. to sustain and excel in the D2C segment.
Razdan stated, “Going forward, as customer experience is building up to be an important lever for brands and retailers, technological dependence is also expected to be a game-changer for D2C brands. In order to boost sales, D2C companies could play more in the personalization and customization area.”
“With consumers now moving to more ‘safe and hygienic buying’ with D2C models, we expect order management and fulfilment to be key for long-term customer stickiness,” Razdan added.
Famous skincare brand Super Smelly is targeting a turnover of Rs 80-100 crore (currently bootstrapped) in the coming few years and aims to roll out products pan India and expand to the Middle East, the UK, and the US. Pee Safe is planning to diversify its product portfolio and increase its retail presence. Similar growth plans are in the process for other D2C brands as well.
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.
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