What Does 2022 Hold For India's D2C Market?
The D2C sector is relatively at a nascent stage, providing brands with abundant opportunities to explore with the evolving market and consumer expectations
India’s D2C market is on an all-time rise and is not set to slow down anytime soon. While the COVID-19 pandemic certainly gave way to business disruptions across verticals, categorically for online brands and marketplaces, there is also a permanent change in how the customers are behaving. Pandemic certainly fueled the rapid growth of the D2C sector but also altered customer expectations. Now consumers expect a frictionless post check out journey that entails tech-first solutions such as one step check-out, pre-filled addresses, RTO predicts, among other aspects. But this is the present situation, let’s talk about the future, the opportunity.
According to data by KPMG, India currently has over 800 D2C brands, with the sector being worth approximately $44.6 billion in 2021 and projected to touch $100 billion by 2025. Multiple factors have contributed to this skyrocketing growth, including internet penetration and the pandemic accelerating consumers’ reliance on online shopping. However, despite the recent boost, the D2C sector is relatively at a nascent stage, providing brands with abundant opportunities to explore with the evolving market and consumer expectations to find what works best for them and drives them to success. Let’s deep dive.
Talk to the customers in a way that customers understand or include unique elements to strengthen the brand's relationship with the customer thereby creating loyalty. With data trends, and AI controlling customization, brands now have an option to understand the customers and then give unique offers to entice them. D2C gives an opportunity to sellers to track their customers' behavior and understand their motivations while tech solutions produce multiple messages in no time that saves both time and cost, making personalization a reality for D2C brands today.
The Omnichannel advantage
Say omnichannel and see a seller’s joy. One platform that aggregates all their orders helps them to manage inventory in no way like before, it takes away stress and gives real-time prediction trends. Data-driven decisions add to manual experience, to make a brand successful. A single view shows them all orders received from multiple avenues such as email, WhatsApp, SMS, Instagram, Facebook, etc. This allows them to increase their sales channels without worrying about who will manage the same.
Knitting the data together to solve problems is another trend that will be witnessed next year. Each online brand has collected data but it is departmentalized. Omnichannel for all data collected by a brand will be transformational for its strategic directions. One united layer will depict what the users want in ways that are more powerful than trend predicts today. From product first brands, companies will change to user first brands. This will also help in identifying cross selling and upselling opportunities.
Optimizing logistics to drive growth
Although the D2C model is lucrative, with numerous brands adopting this approach, the market is witnessing cut-throat competition and does come with its fair share of challenges. One of the primary challenges that D2C brands, especially small and medium sellers, have to tackle is efficient logistics management. The COVID-19 pandemic indisputably highlighted the significance of streamlined, seamless logistics operations and how it can make a difference to D2C/e-commerce brands.
Whether it is warehousing and inventory management, integrated payment options, efficient last-mile delivery, or end-to-end fulfillment, D2C brands are increasingly inclining towards availing the services of third-party logistics platforms. Third-party logistics platforms, with their vast pin code reach, an extensive network of expert courier partners, and technology-integrated operations, can efficiently handle end-to-end fulfillment of the products. While this is not a new concept for D2C brands, 2022, which is expected to be the post-pandemic year truly, will see increased emphasis by D2C brands on logistics management to fuel growth opportunities. After all, one of the keys to success for a D2C brand is its reach and ability to connect with customers through hassle-free, quick services.
The road ahead
Under the D2C wave that is sweeping across the country, one can expect omnichannel and personalization to be the focus areas for the next year. Solving it and making it better is what companies will focus on. With the pandemic causing widespread disruptions in nearly every aspect of business operations, brands have been exploring various strategies to elevate the customer experience. That said, we can safely say that 2022 will be the year of growth, evolution, and progress for D2C brands in the country, and a bright future lies ahead even amidst the increasing competition.
Saahil Goel is the CEO and co-founder of ShipRocket (BigFoot Retail Solutions Pvt. Ltd.)