Traditionally, any small retail business needed distributors like supermarkets and other retail outlets to make their product reach the masses. This meant sharing a great deal of profit with wholesalers and retailers. The only direct relationship manufacturers could secure with consumers was through unorganized door-to-door selling which became outdated and of little use in understanding the target market and consumers’ needs.
However, with the advent of the internet after the 1990s, it became easier for companies in India to directly reach out to their consumers with e-commerce platforms coming to the fore. Such companies came to be known as Direct To Consumer brands, or D2C Brands.
D2C business model eliminates middlemen to reach their target consumers and thus saves a lot of costs spent on distribution.
How does the D2C Model work?
D2C model, as defined above, is a sincere process. Any seller or manufacturer willing to sell his products directly to his end-customers can set up an online website cum store, or promote the products on various social media platforms independent of a middleman.
A study revealed that around 55% of consumers prefer to buy products directly from a brand or manufacturer’s website rather than retailers and distributors. This is a benefit for D2C brands and gives them an edge over conventional middlemen companies.
Advantages of D2C Business
- Increase in Sales: As more and more consumers are finding it convenient and reliable to buy products from the manufacturer’s website, it assures a flourishing increase in sales of the business.
- Understanding consumer’s needs: Establishing a direct relationship with consumers enables the companies to clearly understand their needs and in turn, personalize their experience so that they can feel satisfied and come again to shop.
- Saving Profits: When the company is self-sufficient in reaching its customers, it negates the role of any third-party distributors who earlier had to be paid to sell their products.
- Diverse Catalog of Products: Now that the companies do not require a physical area for selling their products, they can sell from a diverse catalog of products, enabling them to offer extensive variety to attract customers.
List of Some of the Top D2C Brands of India
Mamaearth an online retailer company providing baby care products. It is one of India’s fastest-growing brands crossing the Rs 100 crore turnover mark in just four years and Asia’s first brand to get the MadeSafe certification for its toxin-free products.
Co-founded by a married couple, Ghazal Aalgh and Varun Aalgh, the idea of this company started when they were expecting their baby. Like any protective parents, they browsed the internet for healthy and toxic-free baby care products, but couldn’t find any product in the market that matched the required safety standards. This drove them to create their own company in 2016, manufacturing chemical-free products for babies using the best available ingredients.
The company has attracted over 1.5 million consumers directly and via e-commerce in more than 500 cities across India.
Fit & Glow(WOW Skin Science)
F&G is a wellness and personal care company that uses organic ingredients. In 2016, Wow became a top-five brand in the health segment on Amazon India.
Arvind and Ashwin Sokke, Manish, and Karan Chowdhary are two pairs of brothers who made their dreams come true via this company. They began the journey of F&G when they became bankrupt. But today, their company has turned up to be a $50 million (Rs 350 crore) business and its brand, Wow is a national and global hit.
Fit&Glow has built its business purely via e-commerce with a very little offline presence. They are a challenger brand, taking on the dominant player in the market.
Amazon India’s Head Amit Agarwal has gone on record to say that Wow, a brand of Fit and Glow, is a hit among all their sellers.
Zissto Sauces is a Mumbai-based company that offers a selection of convenient, tasty, and authentic sauces. Launched by Kanhai Porecha in 2017, the company aimed to save cooking time, especially for bachelors and working couples.
Kanhai started Zissto after returning to India from the UK where he did his graduation. He said he wanted to introduce authentic and easy-to-go Indian cooking sauces.
Today, the brand sells 50,000 sauces bottles across Mumbai, Chennai, and in online portals like Amazon and Flipkart.
Everpret manufactures and sells designer bags for working women. The founder, Yashas Alur, worked in a Bengaluru-based company before starting his own business. There, he noticed many women employees carrying more than one bag which was highly inconvenient that didn’t suit their work attires.
From there, the idea of redesigning workbags to fit all essentials seeded inside him. So he quit his job and raised funding of Rs 8lakh for his idea from his former boss.
Yashas launched the Everpret website in January 2018 and started selling designer bags for working women that had enough room to fit all their essentials and also complimented their work clothes.
The company recorded a turnover of Rs 3.5 crore last year but the brand is still in its early stages. Most sales happen in Delhi, Mumbai, Bengaluru, and Chennai, and the company may soon set up kiosks in IT parks to boost brand visibility.
Super Smelly is India’s first and only zero toxin certified personal care brand that offers products specially formulated for the teenage skin.
The company was launched by Dipali Mathur along with her friend Milan Sharma in New Delhi, in 2018. Dipali Mathur wanted to find a deodorant for her teen daughter, but after researching realized the lack of age-suitable toxin-free personal care products for adolescents. From there, she came up with the idea of Super Smelly.
As the brand is still too young to have its own manufacturing setup, Super Smelly products are manufactured at third-party facilities located across other parts of India. However, R&D is done in-house. They only use fragrances that are completely free from any toxins and allergens. The outcome is that the product is not only effective but also completely toxin-free.
Super Smelly is available across all major e-commerce channels, including Purplle, Nykaa, Smitten, Bigbasket, Amazon, and others. The brand also serves US and UK customers through Amazon.
It is now witnessing a month-on-month sales growth of 70 percent.
Some more emerging D2C Brands in India
1) Bare Anatomy
4) Upakarma Ayurveda
5) Namhya Foods
7) Bombay Shirt Company
The internet has brought people closer than ever before. Today, with the internet not just being a luxury for few, but turning into every household commodity, we have seen the emergence of direct to consumer e-commerce (D2C) brands and as a commerce model in the consumer arena. D2C Model is the future of Indian trade and retail.