The Next Frontier: New Models of Indian Commerce
The Next Frontier: New Models of Indian Commerce

As Indian commerce evolves, the most critical question is, what new models of commerce allow businesses to serve the needs of the next billion Indians?

What are New Models of Commerce, and Why Do They Matter?

As e-commerce in India matures and as we’ve seen across other countries such as China, new models of commerce come up that allow businesses to reach and service the consumer in new innovative ways.

In this context, the theory of 'Distribution and Demand', as noted by Tech-writer Ben Thompson, is of utility. Thompson distinguishes between 'Distribution' and 'Discovery'. Distribution is essentially the ability to get your product to the consumer. Discovery, on the other hand, is the ability for you to be discovered by consumers. As a business, the obvious aim is to be discovered by the maximum number of consumers at the lowest cost and serve the largest number of them, again at the lowest cost.

New models aim to play on these two aspects of distribution and discovery, to create economic value. Additionally, it is essential to realize that when any new channel of discovery or distribution comes up, competition increases over time. Quite simply, it costs a business increasingly higher amounts of money to make consumers discover their products and buy their products as competitors crowd the channels of discovery and distribution. The one exception being when the channel of discovery and distribution is 'proprietary', i.e., the business has an exclusive monopoly on its use.

To understand the above concept better, let us peek into the past as businesses transformed from existing purely in the physical world to e-commerce. Before the prevalence of e-commerce, physical stores were required for distribution so that the business could reach the consumer. Additionally, the stores also offered discovery. If consumers walked past a store, they discovered products, thereby driving purchasing decisions. A fragmented Ad market largely drove the discovery component, as Ben Thompson points out in his article 'Ad Agencies and Accountability'. Therefore, to compete in retail, not only would I need to set up my stores, but I would also need to tackle a fragmented ad market for driving discovery.

How Did the Advent of the Internet Change Commerce?

The advent of the internet and e-commerce changed that. The process got rapidly charged with businesses such as Shopify emerging in the last two decades that made selling on the internet easily and cheap. Essentially, as Thompson points out, distribution was available for free on the internet. To compete with an existing business, I did not have to make a significant capital expenditure for setting up a store but could do so on the internet for thirty dollars a month.

However, discovery on the internet, as Thompson points out, is an entirely different issue. If I have a website, how do I get consumers to show up? If the distribution is free, discovery on the internet meant getting web traffic, which had significant costs. The world of online discovery has evolved through influencers, content, subscriptions, etc., all aimed at lowering the cost of discovery, even as the space became more crowded.

Why Do New Models of Commerce Come Up?

With the above discussion in the background, one can see that new models of commerce come up to aid in distribution and, most importantly, discovery. Distribution and discovery are also very context-dependent in terms of countries, cultures, and social structures. China illustrates the Asian story that as the e-commerce ecosystem of Alibaba and JD matured, new models of commerce, such as Pinduoduo, Alibaba’s New Retail, and Shihuituan, based around agents (differentiated distribution and discovery), phygital (merging of the physical and online worlds), bundling of goods (bundling theory) emerged to drive new ways of driving discovery and distribution.

India stands at a stage where 90 percent of commerce in India still happens offline at the unorganized retail stores. Technology solutions aimed at this space have been more about driving efficiency or creating ease and have been horizontal solutions. However, few, if any, have been able to address the need to create new ways of distribution and discovery. That said, as the future evolves, the question isn’t so much about what is online, as it is about who can use technology and the digital world to come up with business models that can drive discovery and distribution over and above what exists today.

How Do We Create New Markets to Unlock Economic Value?

The future holds value in terms of creating business models that can unlock new economic value by creating new markets through a vertical solution. The models of commerce that emerged in China found innovative ways within the cultural and social context to drive discovery, create demand, and fulfill the demand. As Indian commerce evolves, the ability to find unique ways to reach the consumer and make the consumer transact with the help of technology will be the winners of the Indian commerce story in the decades to come. As Indian business models in telecom and banking have shown, the future business models may look very different from what industries in the developed economies look at by the time a Billion Indians truly access a product and service.

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D2C Impact on Natural Skincare Sales: Exploring How Direct-To-Consumer Models Affect The Sales Of Natural Skincare, Emphasising Engagement
D2C Impact on Natural Skincare Sales: Exploring How Direct-To-Consumer Models Affect The Sales Of Natural Skincare, Emphasising Engagement

In the ever-changing landscape of the skincare industry, the rise of Direct-to-Consumer (D2C) models has been a transformative force, reshaping the way natural skincare products are sold and experienced. The fascinating world of  (D2C) marketing has had a profound impact on natural skincare sales, centered around the key element of customer engagement.

Lifting The Curtain: Enhanced Transparency: Transparency and sustainability have become critical for conscious consumers seeking for natural skincare solutions. D2C brands, equipped with the ability to communicate directly with their target audience, have the opportunity to showcase their meticulous sourcing practices, manufacturing ethics, and commitment to sustainability. This not only aligns with the values of environmentally conscious consumers but also develops a sense of trust and authenticity.

Tailoring Customer’s Skincare Journeys: D2C models build direct communication channels, allowing brands to offer their customers a personalized and customized experience. Through engaging interactions, brands gain insight into individual preferences, skin concerns, and feedback. This personal touch fosters a sense of connection, converting a transaction into a relationship. The skincare journey is transformed into a one-of-a-kind and personalized experience that resonates strongly with customers.

Building A Skincare Community: D2C brands thrive on community building, cultivating an environment where customers feel valued and connected. Exclusive benefits, early access to new products, special discounts, and loyalty rewards programs are the foundation of establishing a skincare community. This increases customer retention and also converts customers into brand advocates, which starts a chain reaction of positive word-of-mouth marketing.

Overcoming Geographical Barriers: Natural skincare brands that use direct-to-consumer methods are no longer constrained by traditional retail limitations. Brands can reach a broader audience, including those in remote areas, by moving beyond physical stores towards online platforms. The virtual shelf space has no boundaries, making it accessible to all those looking for high-quality natural skincare solutions.

Data-Driven Marketing:  In the age of analytics, direct-to-consumer brands use data to understand the nuances of customer preferences, behaviors, and purchasing patterns. This wealth of data is an extremely effective tool for targeted advertising and strategic marketing. Brands can create compelling campaigns that resonate with their customers and foster a deeper connection by acquiring a detailed understanding of their audience.

The Backbone of Brand Credibility: Trust is the backbone of successful direct-to-consumer natural skincare sales. Positive feedback, customer loyalty, and word-of-mouth recommendations increase a brand's credibility. When customers believe in the efficacy and quality of the products, trust increases. D2C models strengthen trust by promoting direct communication and community engagement, laying the foundation for long-term success.

The Online Advantage Offers Maximum Reach at Lower Prices: Online platforms and targeted marketing strategies enable D2C brands to reach a wide range of demographics and geographic locations. The low cost of online channels allows for maximum visibility, propelling brands into untapped markets and increasing market reach while eliminating the constraints of traditional retail overheads.

Real-Time Feedback Loops: Direct sales channels allow brands to create real-time feedback loops with their customers. This process of continual improvement enables brands to improve their products and services in response to community preferences and needs. The dialogue between brand and consumer grows into a dynamic collaboration, ensuring that skincare offerings evolve according to customer expectations.

Subscription Services: Subscription models are emerging as a strategic play for direct-to-consumer natural skincare brands. Brands can secure a steady stream of revenue by offering subscription services, as customers commit to receiving products regularly. This not only ensures consistent sales and cash flow but also strengthens the brand's relationship with its subscribers, ultimately leading to a loyal customer base.

Social Media Influence: Influencers have a significant influence on consumers in today's social media age. D2C natural skincare brands can tap into this power by collaborating with influencers who authentically represent their brand's values. User-generated content (UGC) which demonstrates real people using the brand's products is valuable social proof. Utilizing this content across social media platforms and the brand's website creates a compelling narrative that appeals to potential customers.

Conclusion: Direct-to-consumer (D2C) models have a significant impact on natural skincare sales. Enhanced transparency, personalized experiences, community building, increased accessibility, data-driven marketing, trust-building, online reach, feedback loops, subscription services, and social media influence all contribute to a shift in the way consumers perceive and interact with natural skincare brands. As brands navigate this transformative landscape, the key is to harness the power of direct-to-consumer models to not only sell products but also build long-term relationships with a community of skincare enthusiasts. The future of natural skincare sales is more than just a transaction; it's an immersive experience in which brands and consumers interact to create a narrative of beauty, authenticity, and sustainability.


Authored By


Himanshu Sharma, Co-founder & Managing Director, ORGATRE


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