Over 800+ Indian startups are reaching the consumers directly without middlemen. It’s a win-win situation for both business firms and consumers. The direct Consumer(D2C) model has become a massive hit across the country.
Let’s have a look at the key developments regarding the D2C ecosystem in India.
Rise of D2C Brands in India
The traditional retail industry was jolted due to the covid outbreak globally. Manufacturing companies lost a lot of money due to the non-delivery of their products to the consumers. Startups realised that the digital D2C model is the only way to survive in the current covid situation.
As per the recent release about startup growth, brands with websites observed 88% more traffic compared to the year 2020. That means people shifted their focus to the online solution due to nationwide lockdown.
Fast Moving Consumer Goods(FMCG) established brands like Himalaya, ITC, Hindustan Unilever and others are facing stiff competition from young D2C startups like Mamaearth, Pee Safe, Moms Co. And others.
D2C model is so popular that Mamaearth took just four years in reaching a Rs 100 crore revenue, whereas globally popular beauty brands reached Rs 100 crore revenue mark in 20 years, as per the Inc42 report. Companies like Sugar, Mamaearth utilized the digital D2C model very well to receive exponential growth.
Recent Statistics and the Future of D2C Ecosystem
Inc42 Plus recently released a report about the “Rise of India’s D2C”. As per the report, the D2C sector in India will be worth $100 billion by 2025. Currently, it is worth $44.6 billion at the end of the fiscal year 2021 compared to $33.1 billion in 2020.
In 2019, the D2C sector had a total valuation of $26.8 billion compared to $20.8 billion in 2018. The number suggests promising growth in the D2C market.
The fashion industry occupies the majority of D2C space. It received around $756 million between 2014 and 2021. Inc42 Plus report suggests that the fashion sector will be worth $43.2 billion by 2025. Inside the fashion sector, Apparel and footwear have the maximum growth as a sub-segment.
Consumer electronics brands will cross the $30.6 billion valuations by 2025, while FMCG will contribute $20.8 billion in an expected valuation of $100 billion by 2025. Home decor is another segment that has high potential to grow in the coming 4-5 years.
There are various reasons behind the popularity of the D2C model. E-commerce penetration, technology awareness, internet expansion, diverse offerings, and reasonable product cost are some of the major reasons behind the D2C sector success.
But, the covid emergency gave the ultimate push to D2C brands. People’s fear of going out(FOGO), social distancing and strict covid guidelines brought a massive change in consumers’ mindset.