India, which is one of the largest markets in the world, is projected to surpass $1.7 trillion by 2025. A major trend that is observable is the e-tail market leading the shift to organized retail in the next five years. The trend is said to be similar to China, where e-tail constitutes more than two-thirds of the organized retail share which is 45 percent of the total market.
In fact, the Covid-19 pandemic has further accelerated online adoption amidst the temporary closure of physical retail stores and the growing wariness for public places. On this backdrop, online spending in India is expected to grow at a CAGR of 35 percent + from $ 39 billion today to $200 billion over the next 5 years, supported by internet and payment infrastructure developments, according to a report by Financial Services Firm Avendus Capital.
“Indian D2C brands operate in a brand starved ‘neo-consumerist’ population and have the benefit of learning from the mistakes of global counterparts. Today, India is witnessing the rise of D2C brands across categories and is estimated to become a $ 100 billion addressable market by 2025,” said Pankaj Naik, Karan Sharma, Co-heads of Digital and Technology Investment Banking, Avendus Capital
Moreover, the space has seen increased funding activity in recent times. D2C brands such as Lenskart, Licious, Zivame, Boat, Wow Skin Science, Healthkart, Mamaearth, MyGlamm, Sugar, Incnut, Country Delight, Atomberg, Lifelong, among others, are occupying niches, and creating aspirational brands and extraordinary value in their respective sectors. Going ahead, the sector is going to see the entry of many such brands that are also getting reasonable funding.
D2C brands are characterized by their agile DNA, innovative marketing, efficient operational processes and effective use of technology. With access to customer data, D2C brands leverage consumption insights, work on a feedback-led model and rapidly develop products to ensure that the evolving customer needs are addressed.
READ MORE: Funding Galore in the D2C Sector