By Mr. Aanan Khurma, Co-Founder & CEO of Wellversed
Ever since the pandemic, we have developed tendencies where we prefer doing things from the closed walls of our homes.
Rather than going outside to shop for our daily necessities, we prefer buying them online through different websites and E-commerce platforms.
There has been a rise in online activities in the D2C sector with the wave of digitization. This has made lives easier.
Be it shopping for apparels, essentials, luxury or even daily groceries, people have started to purchase from online portals because of the flexibility it provides.
Online shopping has given birth to different E-commerce platforms where people can easily do price comparisons and choose from thousands of options before making the final decision.
The convenience of online shopping has pushed more and more D2C brands to shift to their online presence in order to ensure that their operations and sales run smoothly without any interference.
This has significantly boosted sales as well. The customers can now easily find the brands they like and purchase them from the comfort of their homes.
Online shopping has eliminated any third party sellers and marketplaces, rather they now use their own E-commerce platforms, websites and social media handles to sell their products.
This elimination of any third-party middleman has helped them to earn more revenue along with boosting their sales.
The e-commerce market in India was valued at $38.5 billion in 2020 and is expected to reach $99 billion by 2024, growing at a CAGR of 27% between 2020 and 2024.
E-commerce has laid down the path for direct-to-consumer (D2C) brands in India. The growth of e-commerce in India has been driven by factors such as increasing internet penetration, affordable smartphones, and rising consumer demand for convenience. D2C is a segment of the eCommerce market that is growing at a CAGR of 65-70%.
The key components of e-commerce include: (a) Website or online store (b) Payment gateway like Paytm, Razorpay, and CCAvenue (c.) Logistics and delivery (d) Customer service (d) Marketing and advertising (e) Security and data privacy.
These key components of e-commerce work together to create a seamless and convenient online shopping experience for customers, while enabling businesses to reach new markets and grow their sales.
India’s D2C (direct-to-consumer) market is diverse and includes a wide range of product categories like Beauty and personal care,
Food and beverage, Fashion and apparel, Home and lifestyle, Electronics and gadgets, Baby and maternity, Health and wellness.
All these categories have been able to evolve due to evolution of the eCommerce infrastructure which has played a crucial role in enabling the growth of D2C (direct-to-consumer) brands in India.
The infrastructure includes a range of digital technologies and platforms that facilitate online transactions, logistics, and customer engagement.
- Online marketplaces: E-commerce platforms like Amazon, Flipkart, Nykaa, Myntra, and Snapdeal provide D2C brands with a ready-made customer base and logistics support, enabling them to sell their products directly to consumers without the need for physical retail space.
- E-commerce platforms: E-commerce platforms like Shopify, Magento, and WooCommerce provide D2C brands with easy-to-use tools for building and managing online stores, including payment gateways, inventory management, and order fulfillment.
- Digital payments: The widespread adoption of digital payment systems like UPI (Unified Payments Interface) and mobile wallets has made it easier for D2C brands to accept payments from customers, even in remote areas of the country.
- Logistics: E-commerce companies like Delhivery, Ecom Express, and Blue Dart provide D2C brands with reliable logistics and last-mile delivery services, enabling them to reach customers across India.
- Social media and influencer marketing: Social media platforms like Instagram, Facebook, and Twitter have become important channels for D2C brands to reach and engage with customers, while influencer marketing has emerged as an effective way to promote products and build brand awareness.
- The e-commerce infrastructure has been instrumental in enabling the growth of D2C brands in India – increasing penetration rate to 28% in 2020, up from 5% in 2013. As of 2021, there are an estimated 100 million online shoppers in India, and this number is expected to reach 220 million by 2025.
Mobile commerce is driving the growth of e-commerce in India, with over 70% of e-commerce transactions happening on mobile devices.
eCommerce is the primary driver for D2C players providing them with the tools and platforms needed to build and scale their businesses, reach new customers, and compete with established brands.
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