In recent years, the D2C ecosystem has seen tremendous growth with more than 800 brands now following this retail approach in India. The D2C method is far from novel, but the onset of digitalization gave it momentum, offering a convenient platform for entrepreneurs to directly reach a wider base of consumers and vice versa. However, it was the pandemic that leveraged it further, accelerating its growth with an ever-widening base of consumers. With more brands now taking the direct route to reach out to consumers, the D2C market in India was valued at US$ 44.6 billion in 2021 and is expected to reach US$ 100 billion by 2025. In terms of funding, D2C brands have raised US$ 2.04 billion in the 2014-21 period.
While the pandemic was the push that accelerated the growth of the D2C industry, it was also the change in consumer preferences and sentiments that has led to its rapid expansion. The modern consumer is product savvy and willing to support local businesses, especially for a product that promises tangible value addition or supports their value system. Another marked characteristic behind India’s D2C story is the rise of woman power, both as an entrepreneur and as a consumer. Along with an increase in their purchasing power, it is also women entrepreneurs who are changing the story and leading the D2C revolution.
Rise of Women Entrepreneurs
One of the remarkable aspects of the D2C ecosystem is the emergence of the female entrepreneur as the driving force. Instamojo, a digital solutions provider for D2C businesses, recently revealed that women accounted for 40 percent of their clientele with increasing traction among women above 50 years of age. The company also reported more than 500,000 queries by women who were interested in setting up shop on the e-commerce platform.
The digital D2C ecosystem can be attributed to the wave of change brought by women entrepreneurs. Today, many of the leading D2C platforms, such as Nykaa and MamaEarth (beauty brand), are led by women. Digital platforms offered these entrepreneurs a medium to directly connect with consumers without going through any intermediaries. Many smaller businesses were, thus, able to circumvent any gender-based hurdles as manufacturers or business owners.
For women entrepreneurs in the digital space, funding was also comparatively easier than their brick-and-mortar retail counterparts, since the new-age digital funding ecosystem is relatively gender-neutral. The central government recognized the growing potential of women entrepreneurs in bringing social change. Therefore, in 2018, Niti Aayog launched a Women Entrepreneurship Platform (WEP) in association with SIDBI to support women-founded businesses through various initiatives, including funding.
The Female Economy
With more women joining the workforce, there is also a corresponding rise in their spending power. Even without economic parity, women exert a huge impact on purchasing decisions with one estimate pegging their influence at 85 percent of all products and services. They account for almost 50 percent of all online shopping and have the definitive say in more than half of household purchases. Social media is one of the best indicators of this social dynamics with women influencers accounting for a whopping 84 percent of sponsored posts in 2019.
Women entrepreneurs have a unique insight into this growing demographic and are best placed to tap into their ambitions as well as pain points. Many of the leading women-led D2C startups have exploited this market by offering solutions that were missing or addressed their unique concerns, be it beauty products at one platform, parenting advice, or consumer goods that promised a better quality of life.
The rise of women entrepreneurs echoes the social shift where a greater emphasis on diversity is changing gender dynamics in the market and the workforce. It is an encouraging sign that indicates their move towards economic parity and social mobility. In addition, it also portends a positive trend for the future as the success of women-led independent homegrown brands encourages more women to take up the reins of their own future.