Meet Priya Sharma, a 30-year-old former corporate executive who left her cushy job to start her own skincare brand, leveraging the power of social media and e-commerce platforms or Meenu, a 28-year-old digital native, starts her day by scrolling through her favourite homegrown brands on Instagram, marveling at the unique, handcrafted jewelry from a startup in Jaipur and eco-friendly skincare products from a sustainable brand in Kerala. Well, these are not isolated stories . This is the new face of Indian commerce, a vibrant, dynamic Direct-to-Consumer (D2C) industry that’s rewriting the rules of retail.
Across India, from the tech hubs of Bangalore to the cultural heart of Kolkata, entrepreneurs are seizing the opportunity to connect directly with consumers, bypassing traditional retail channels. From fashion to food, and beauty to home decor, the Indian D2C industry is not just about selling products; it’s about creating stories, fostering communities, and building brands that resonate deeply with consumers’ values and lifestyles.
This week’s edition of “The People Weekly”, we delve into the rise of the Indian D2C industry, exploring the key drivers behind its explosive growth, the challenges it faces, and the innovative strategies that are setting these brands apart in a crowded marketplace.
D2C(Direct to Customer) Market
India has around 820 million internet users and 250 million online shoppers.It is forecasted that by 2027 India will have over 425 million online shoppers. The Indian e-commerce market is projected to grow at a CAGR of 19% between 2020 – 2030, and the D2C segment is projected to grow at 49% during the same period. In fact as per reports, the Indian D2C market will reach USD 61.3 billion by 2027, tripling its market size. After the US and China, India has the largest D2C market in the world. Over 600 new brands have entered the D2C space since 2016 and have attracted total investments of over $4 billion across about 730 deals between 2020 and 2023. Many D2C brands founded by family scions of traditional businesses have gotten VC backing.
So what is D2C? D2C stands for Direct-to-Consumer. It’s a business model where a company sells its products directly to consumers, bypassing traditional retail channels like wholesalers and retailers both online and offline. With changes in consumer preference and behaviour especially during and after the pandemic the D2C segment in e-commerce is poised for exponential growth.
Some of the major drivers for D2C growth are
- Internet and Smartphone penetration
- Tech Savvy consumers especially the Gen Zs
- Convenience of an online store
- Better pricing
- Free & Fast Delivery ; Rise of Q commerce
- Government Support
- Changing consumer preferences which include customisation and personalisation
D2C market models and segments
The D2C market is primarily comprised of two models: digitally native vertical brands (DNVBs) and traditional brands transitioning to a direct-to-consumer approach. Driven by consumers’ increasing demand for personalised, customised, and informed shopping experiences, coupled with a strong emphasis on customer loyalty, established brands have largely adopted the D2C model. To deliver exceptional customer journeys, many brands are now merging online and offline channels. This, combined with the omnichannel strategies employed by D2C players, has fueled the explosive growth of the D2C market.
As for the customer segments, 70% of the D2C customer base comprises millennials and the rest the GenZs.
Some of the major segments where D2C players shine are
Mama Earth, Nykaa, Sugar Cosmetics, Paper Boat, Licious, Bewakoof, boAT, Bombay Shaving Company, DaMENSCH, Bacca Bucci, Country Delight, Chai Point, Wakefit, Bluestone, CaratLane etc are some of the top players in the Indian D2C segment.
Trends to look for in D2C
Tier II and III Penetration: D2Cs are increasingly wooing consumers in Tier 2 & 3 cities. On the inaugural day of Nykaa’s Pink Friday sale last year, a notable 57% of customers hailed from Tier 2 and Tier 3 cities. Over 60% of SUGAR’s sales come from small towns like Siliguri, Karnal, and Bhatinda etc. Not to mention the Great Indian Festival sale of Amazon India, where 75% of customers hailed from tier 2 & 3 cities.
Omnichannel Presence: The distinction between online and offline will continue to fade as D2C brands explore hybrid models. Most D2C brands are embracing omnichannel sales more than ever. Customers are preferring multiple touchpoints in their journey before they can decide. Omnichannel does exactly that. Many D2C brands have offline stores. Creating immersive in-store experiences to build brand loyalty and offering customers flexibility in how they receive their purchases will be the game changer in the D2C industry.
Hyper-Personalization: Utilising customer data to create highly personalised product recommendations and marketing campaigns by employing advanced technologies to understand customer behaviour and preferences will be another trend to watch out for in the D2C space.
Sustainability and Ethical Consumption: Customers, especially the GenZs are influenced by buying for a cause which are driven by sustainability and ethical consideration. Demand for environmentally friendly products is on the rise. Building trust by showcasing ethical sourcing and production practices Aligning with social causes will resonate with conscious consumers.
Easy payment options: Most of the time the shopping cart is abandoned due to complex checkout and payment options. As digital adoption surges, consumers increasingly expect seamless and convenient payment experiences. This has compelled D2C brands to offer a diverse range of payment methods to cater to the varying preferences of their target audience.
ONDC: ONDC, a GoI backed initiative provides a level playing field for all ecommerce companies. By connecting with multiple platforms and apps, D2C brands can reach a wider audience, including those in tier II and III cities.
D2C Ecosystem and Career Opportunities
The growth of the D2C market will create 10 million direct and indirect jobs in the retail space as per a report. With plethora of job opportunities across various functions, from marketing, sales, and customer support to product development, logistics, and technology, there is a growing demand for skilled professionals.Key roles in the D2C ecosystem include:
Digital marketing specialists: To create and execute effective digital marketing campaigns.
Customer success managers: To build strong relationships with customers and resolve their queries.
Supply chain managers: To optimise the supply chain and ensure timely delivery of products.
Data analysts: To analyse customer data and derive insights for business growth.
E-commerce professionals: To manage the online store and customer experience.
Product Developments professionals : Product managers, designers, and quality control specialists.
Hiring for D2C brands
As they increase their offline presence through brick and mortar stores, many D2C companies are ramping up their hiring . Companies like Wakefit, Licious, Noise are looking for professionals with hyperlocal understanding along with an understanding of offline and online landscape, supply chain, digital and ecommerce . There is a rise in demand for leadership and C suite executive roles.
However, the nascent D2C ecosystem presents unique hiring challenges. The industry’s dynamic nature demands adaptable professionals who can navigate its rapidly changing landscape. D2C startups often face stiff competition for top talent from larger, established companies. Building a strong employer brand to differentiate oneself in this competitive environment is crucial. Identifying and retaining leadership capable of steering the company through the D2C industry’s volatility is another significant hurdle. Matching candidate expectations with the benefits and perks offered could also be a challenge for a startup.
PeopleLogic Opinion
India’s D2C industry is experiencing meteoric growth, driven by a confluence of factors including rising internet penetration, a burgeoning middle class, and a preference for personalised experiences. With a substantial market share and immense growth potential, the sector is a magnet for talent, attracting professionals across marketing, technology, and operations. As the industry evolves, we can anticipate a surge in innovation, with a focus on sustainability, augmented reality, and deeper customer engagement. The D2C landscape in India is not just reshaping consumer behaviour but also creating a new wave of entrepreneurial opportunities and employment avenues.
PeopleLogic, one of the best recruitment agencies in india is uniquely positioned to identify and recruit top talent for the dynamic D2C industry. With a deep understanding of the sector’s unique hiring challenges, such as the need for digital-first professionals, data-driven thinkers, and brand-building experts, we leverage our expertise to source and assess candidates who align with a company’s specific goals. Our data-driven approach, combined with a strong network in the D2C ecosystem, enables us to efficiently identify top talent, assess their cultural fit, and deliver exceptional results, helping D2C brands build high-performing teams that drive growth and success.
