Combonation Expounds a Brand New Proposition For D2C Sector

The global pandemic caused a paradigm shift in the businesses conducted across all industries, this led to a majority of brick-and-mortar stores shifting online while also giving impetus to the growth of exclusive online businesses

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Experiential retail has been emerging as the driving force behind the growth of the Indian retail industry. In that light, Combonation came about owing to a defined proposition to make shopping a more exciting and value-added experience by saving customers money and time.

Company handout
Pooja Sodhi

"We set out to create a direct-to-customer (D2C) distribution network that eventually transcended into a live manifestation of the expression – 'Steal the Deal'. Our ideology with Combonation has been quite rudimentary in the sense that we kept ourselves in the shoes of a common customer and observed the gaps they experience in retail shopping," said Pooja Sodhi, co-founder and CEO of Combonation.

The global pandemic caused a paradigm shift in the businesses conducted across all industries, this led to a majority of brick-and-mortar stores shifting online while also giving impetus to the growth of exclusive online businesses. India's e-retail market registered a CAGR of over 35% to reach INR 1.8 trillion in FY20, as per market insights. Easy, quick, and frequent transactions raising small ticket sizes in bulk have also been a significant contributing factor to the growth of e-commerce.

On this backdrop, while revealing the company's smart move to scale up in the sector, the CEO asserted that Combonation works at a slightly different tangent than most of the e-commerce marketplaces, without disrupting existing distribution networks of brands and their pricing, we aim to curate combos that excite and delight our customers from personal care to beauty and wellness to home decor, etc.

She further disclosed that the company's plan of scalability is not linear, but a dual approach that has both geographical expansion for targeted market penetration and enhancing the Combonation e- marketplace for a better customer shopping experience.

"Faster cart conversions, better API integrations, discount applications, and post-purchase experience are arenas where we are deploying the majority of our resources. We constantly work on making the website more user-friendly and also leverage big data to provide customized recommendations ensuring that our audience does not miss out on lucrative brand deals," said Pooja Sodhi.

It is reportedly estimated that D2C brands in India are growing at a CAGR of 40% but there is no certain hack so to speak, value addition above all is the key for any business, not just e-commerce. It is also expected that some recent trends that will for the foreseeable future be prevalent in the D2C space are health and wellness-based commodities, adoption of an omni-channel approach, front-footing with social-commerce, and subscription-sales model among others.

Being asked on the secret recipe for success in the D2C sector, Pooja said that, "Brands can only thrive by being relevant to their respective target audience and perpetually giving customers something to look forward to; this is the philosophy followed in Combonation as well. It is crucial for brands to cope with the rapidly changing demands of the end consumer. By design the D2C market is extremely sensitive to trends and brands that are able to cater to such dynamic needs are surely going to come out on top. As expectations of customers from their favorite brands are rising across the country, D2C players are expected to dig deeper into their resources to provide more customer-centric solutions in 2023."

When speaking about the key ingredients of a successful D2C brand, it is to be noted that marketing the product effectively plays a pivotal role in determining the success of a D2C brand. According to market studies, the high search volume from this year indicates that more brands want to choose a D2C marketing model. With reference to some approximate statistics, Indian D2C brands spent $157 million on advertising in FY21. Further, it was observed that the median advertising budget for top-funded D2C brands in India was $2.6 million in FY21.

As per Pooja's words, a prerequisite to good branding and marketing strategies is to ensure the quality of products and services because that will surpass everything, once that area of business is sorted then companies should start building campaigns that are self-explanatory and intuitive but not misleading or shammy.

"We at Combonation have always had a customer-centric approach and given the D2C model of our business, this becomes all the more relevant. Our aim remains to make the shopping experience a delight for the end consumer regardless of the mode of purchase, be it online or offline. We ensure that our deals are never subject to a specific brand or a certain product portfolio," she noted.

In the precariousness of the modern marketing landscape, brands across every sector are facing challenges. India's 700 million internet users and 180-190 million online shoppers claimed to make it the third- largest market for D2C brands after the US and China. In 2020, consumer demand for most D2C brands via website said to have risen by 88% compared to the years before Covid-19. The Indian D2C market is currently believed to be worth $1.9 billion, about 1% of the domestic market for consumer goods, home goods, and consumer accessories.

"For D2C brands, product and marketing are the two biggest focus areas. They should explore outsourcing other functions to partners who have domain expertise. The challenges faced by D2C brands in the early breakthrough periods can hinder e-commerce growth from sales conversion to logistical delays. Within the Indian D2C ecosystems, factors such as - Cost of customer acquisition and maintenance of brand loyalty; hiring and talent management; bottom-line challenges; working capital management, and ESG obligation as well as other sustainability factors are areas where a lot can be done smatter and are also places where there's a constant tussle. The success of D2C brands, therefore, depends a lot on tech-enabled fulfilment," said Pooja Sodhi.

Keeping all these challenges in mind, Pooja Sodhi advised the beginners in the sector to have a UVP (Unique Value Proposition) or take notes from the precedents and build the best version of it. She also added that it is important to evaluate the market budget for a said company and then focus on how your D2C brand can achieve the first set of goals without exhausting a big chunk of resources.

"Be aware of the difference between pivoting and devoting; pivoting is change but deviation will only lead to purpose dilution and make your brand unstable," said Pooja.

The D2C market in India is said to be growing at an incredible pace. In the D2C sector, consumer behavior is said to be one of the common focuses of market theory. The market behavior varies from place-to-place and time-to-time. Considering the Indian states' behavioral pattern, according to reports, the top 2 cities Delhi and Mumbai accounted for $71 billion of the overall retail spending across different city types. Followed by the next 6 which are Bangalore, Chennai, Ahmedabad, Pune, and Kolkata, contributed $79 billion. The rest of the states and cities accounted for 685 billion USD. Therefore, one thing is very evident, even though the metropolis cities have contributed significantly to e-commerce growth, over the years, tier 2 and tier 3 states have also absorbed market trends and they now make up for a huge chunk of the Indian e-commerce market.

Referring to this scenario while explaining the competition in the D2C ecosystem, Pooja Sodhi elaborated that, "The Indian e-commerce ecosystem has been blessed with the influx of new players; approximately, there are more than 19,000+ e-commerce companies in India today. A majority of the new players are now discovering more niche market segments; whereas other players are now trying to pivot from what they were initially. E-commerce by nature is a very demand-sensitive domain and suppliers are often hyper-respondents to trends. Today's competition goes beyond just the numbers but is more about who is more relevant in the long run."

Though the competition is evidently high, with the right spirit and focus, Combonation plans to grow multi-folds in terms of their overall market presence. Dwelling more into the company's vision, Pooja divulged that, "We are constantly in touch with brands to design the best possible deals and enlist new brands on our panel as well. We are actively deploying the best of tech-talent to enhance the Combonation website and make it an extremely user-friendly, fast as well as a secure place for all to shop without any apprehensions."

"Additionally, our offline retail stores are also growing; with further geographical expansion across metro and non-metro markets, we will be able to reach more of our online customers while bringing on board a new set of customers too," she added.