India is one of the most extensive retail markets globally, forecasted to outdo US$ 1.7 trillion by 2025. India has added 80 million online customers in the last three years alone, now reaching 130 million.
The retail market is mainly disorganised, given the low number of marketplaces and shopping complexes and large real estate and rental prices. As far as authorised retail goes, a higher e-tail invasion will lead to organised retail in the near five years in India. The trend is comparable to that seen in businesses like in China, where e-tail aggregates more than two-thirds of the established retail share.
Evolution of D2C Brands in India
Indian D2C brands work in a brand starved ‘neo-consumerist’ group and profit from learning from the blunders of their global competitors. Today, India is seeing the ascension of D2C brands across categories and is calculated to have US$ 100 billion addressable markets by 2025.
D2C brands such as Lenskart, Licious, Zivame, BoAt, Wow Skin Science, Healthkart, Mamaearth, MyGlamm, Sugar, IncNut, Country Delight, with others, are occupying recesses and building themselves as an aspirational brand with tremendous force in their respective domains.
Future of D2C Brands in India
A vast amount of funding ventures in this area is anticipated, as more successful D2C upshots will endorse the hypothesis for more modern capital deployment. There will elevate the investor share in high-quality startups with a focus on capital productivity. A sturdy alliance venture is expected in the next 3-4 years, either as roll-ups or administrators buying new-age D2C businesses. It is estimated that IPO timelines may be 3-5 years beyond in this sector.
To properly understand the D2C ecosystem, we have explored the key operators and success agents for the rise of D2C brands in India.
Evolution of the Consumption Fashion
India sees an unfolding in user types. Women, the new powerhouse consumers, now have the ultimate share of household settlements, and they now form nearly half of the online shoppers. Classical players underserved New-age customers inquiring about the niche and customised commodities.
Growth of Online Shopping
India’s rise in online shopping is stoked by the 639 million large internet community, exhibiting a 24% y-o-y growth. The COVID-19 pandemic has moreover quickened the online choosings amidst the momentary closure of physical retail stores and the increasing wariness for country places. In this backdrop, online spending in India is foreseen to expand at a CAGR of 35%+ from $39 billion today to $200 billion over the next 5 years, also backed by internet and payment infrastructure advancements.
The 22 organisations were sustained on platforms considered the post-dot-com internet — Amazon, Facebook, Google, Instagram, and Kickstarter.
As we look forward to 2021, digital-first D2C brands will appear, with massive brands originating their digital-first fins. D2C brands that intend to outstay the race will require leveraging insights from consumer data to amp up their traffic, engagement and transformations. Market enablers like website tech, marketing tools, logistics and supply chain providers and fintech startups will play a crucial role in this and will continue to advance. We are also likely to see more substantial e-commerce sales coming from users in tier-2, tier-3, semi-urban and rural markets as their income levels rise. Above all, technology, innovation and reform will be essential to success. With trends like AI-enabled judgment making, advanced forecasting and guidance, localised material and native regional language interfaces, conversational economics and social commerce set to direct the way for D2C growth in 2021.
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