There has been a rise in D2C brands and a structural shift in consumer behavior fueled by the COVID-19 pandemic, rising internet users in India, and increased smartphone penetration. The country is now observing an upward trend in online buying. 

As per KPMG India, currently, over 800 D2C brands are operating in India. D2C players have raised an excess of $2.5 billion since 2014, making the D2C sector worth $44.6 billion in India as of 2021. It is expected to reach $100 billion by 2025.

Below are the top 6 strategies highlighted by the panelists at Startup Summit 2022 that D2C brands can adopt to grow further in this landscape.

Focus on Data

Data is the game changer for the D2C industry which is blooming day by day with many brands working on it. For the D2C brand, data tells them about how the brand is moving, where exactly is the growth happening and where the brand needs to focus. It is very important for brands to understand which target customers are they trying to focus on. Even in small towns and cities, there are great opportunities because people over there have got immense wealth and they understand the value of a brand as well but unfortunately, they do not have the reach for the product or the brand so there are many cities where people are actually waiting for a great brand to show up so they can start buying. Hence, data can help brands to find those cities.

“Sometimes the product which you believe that might not be suitable for a certain kind of an audience will actually be working wonders for them so as a startup no matter if it a consumer-driven data or a distribution kind of a data or even from a logistics point of a data, it is very important for an entrepreneur to keep its eyes on these numbers all the time,” Ravi Kabra, Co-Founder, Skippi Ice Pops said.

“Data plays a very important role. The data of buyers enables us to know from which pin codes the orders are coming. This is what has enabled us to open up the first points of sales online. With Bella Vita Organic, we are present across 12,000 stores. So, data in terms of sales and everything has scaled up the business every day. So, data has not helped us to not just move from offline to online but even in terms of launching new products, creating new categories, enhancing existing categories and to open new portfolios,” Aakash Anand, Founder & CEO, IDAM House of Brands added.

Create More Awareness by Sampling

First, sampling should be the focus and then create awareness. Abhishek Sinha, Co-Founder, and CEO, GoodDot said that it’s important to know the novelty factor of the product. For instance, if the brand is into wafers or drinks, it’s easier for people to understand as they have a reference point. But some new categories like plant-based meat which people think is similar to a soya nugget or a soya chaap that’s where building education is important. This awareness can be created through sampling options so that consumers can understand and trust the product.

“For us, wherever we are going, we are also collaborating with society apps like my gate, etc., and do an aggressive marketing and product campaign. Awareness will always be followed by sampling,” Sinha stated.

Build a Portfolio of Products

When the brand is selling offline, the sales and marketing costs are very high and to load that on 4-5 products is very difficult, especially for a food brand. Doing retail with five products doesn’t make sense for any brand because the average order value (AOV) is very less.

“With the AOV so less, customer acquisition costs also increase. Therefore, it’s important to give consumers more options as the idea is to create an ecosystem. For instance, when somebody is looking for a snacking range and come to our website to buy, the vision has to be from day one to build a portfolio of products than just one product,” Chirag Gupta, Founder, 4700BC asserted.

Community Building Activity

Brands should focus on community-building activities. Alok Paul, Co-Founder, Berrylush said that 95 percent of the brand’s Instagram posts are user generated. Every day, Berrylush gets like 50 people tagging it and they are messaging the brand asking to post their photo on the brand’s page.

“It is incredible to see what we can achieve by performing community-building exercises on Instagram and Facebook,” Paul noted.

Personalization is Key

Understanding consumers’ likes, preferences, needs, history, and interests will help D2C brands in getting a competitive advantage as customers have become both critics and creators. Shopping has been redefined by the technological innovation of AI, VR, IoT, voice ordering, one-click ordering, or robot-assisted. By adopting these technologies brands are enhancing customer experience by providing ownership of a customized brand, better customer support, visual interaction, and building a long-lasting relationship.

“I found that there are a lot of people who want to do many things very quickly and that’s where they probably end up the pain because of cash burn and I think if we can quickly get the word out of the customer in terms of a look in feel that is where the purchase with the customer will happen,” Abhinav Talwar, CEO, Agro Composites told.

Building Offline Presence is Imperative

Humans need change, not that offline is going to come down or online is going to come down. But with the growing commercialization, both will continue to exist but looking at the current trends, a significant high part of India still shops offline, and a significantly high portion of the country still goes to the Kirana shop. So the idea of this vast penetration is being made possible through the offline presence and it’s not that you are going to mindlessly scatter across the country but the idea is to first understand the market.

“We rely a lot on customers but you know there’s a common saying in our office our personalities divide us and data unites us. So we look at data, we talk to the customers and then we also try and understand if there is a genuine need in that market before we start kind of being available offline in that area. Also, the way it is now offline fuels online and vice versa,” Shreedha Singh, CEO and Co-Founder,  The Ayurveda Company concluded.