Traditional retail brands in India are launching their own direct-to-consumer (D2C) online channels to reach mobile-savvy consumers and increase sales. Brands including Panasonic, Dabur, ITC, Emami, Tata, and Wipro are betting on D2C platforms to benefit from instant consumer feedback and provide hyper personalization. D2C online channels provide an opportunity for brands to interact directly with consumers and gain valuable first-party data to drive new product launches. According to a report by investment firm Avendus Capital, the online D2C segment is expected to have a $100bn addressable market by 2025. The online retail market in India is set to surpass $1.7tn by 2025, driven by an increase in new online shoppers, which has reached 80 million in the past three years alone.
Shoppers Stop, Emami, and TMRW have launched exclusive brands on their online channels. Dabur India has soft-launched its D2C e-commerce platform DaburShop with limited products but is working to expand the range. ITCstore is operational across 20,000 pincodes and offers its entire product range for direct sale to consumers. Tata Nutrikorner is a one-stop shop for consumers to buy Tata Consumer Products in six major cities. Marico aims to achieve a turnover of about INR500 crore ($68m) by FY24 from its D2C platform Saffola Stores that was launched during the pandemic.
D2C online channels have helped brand teams become more comfortable with using analytics as a predictive input for faster and effective decision-making. The model has been effective in discretionary categories, such as beauty and personal care, fast fashion, and personal electronics, because of their short product lifecycles and significant channel margins. The growth of e-commerce is driving the trend towards D2C platforms as companies seek to deepen their insights into consumer behavior and buying patterns, and offer unique and superior product offerings through omni-channel strategies.
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Traditional retail brands that relied heavily on offline channels for sales have started to rethink strategies, launching exclusive direct-to-consumer (D2C) online channels to reach out to more consumers. The move is set to target mobile-savvy consumers who have warmed up to the idea of shopping online for their daily needs.
Brands like Panasonic, Dabur, ITC, Emami, Tata and Wipro are betting big on their own e-commerce platforms with an eye on changing market dynamics and consumer behaviour, taking into account that instant consumer feedback and being ‘omni-channel’ are important market strategies today.
“D2C online channels are a good opportunity to interact directly with consumers. Since first party data is made available through D2C, it provides rich insights on usage, consumption, attitude and preferences towards the product and brand, and is useful from a learning standpoint, especially for accelerating new product launches and managing hyper personalisation,” said Anand Ramanathan, partner, Deloitte India.
Brands like Panasonic are built on stories, feels Fumiyasu Fujimori, MD, Panasonic Marketing India, Panasonic Life Solutions India, saying, “Who can tell that story better than the brand itself. With our D2C platform, our intent is to help consumers make an informed decision. Today, it’s imperative for brands like ours to build a direct line with consumers.”
Since the launch of its D2C e-store in September 2022, Panasonic has seen website traffic of about 2.5 million visitors and will soon add its entire range of products and services to the platform.
From an overall demand perspective, e-commerce is increasing its share in the overall retail business size with strong growth, with new consumer addition forecast to increase from the current base of 180 million to 350 million in the next four-five years, said Sumit Keshan, managing partner, Wipro Consumer Care Ventures, Wipro Consumer Care & Lighting. He added, “Companies would need to have deeper insights of their respective consumers’ behaviour in terms of buying patterns, urban vs rural, price points, uniqueness of product or service, fundamentals of quality, accessibility, delivery, etc. All of these would need to work in combination and not in isolation.”
Dabur India soft-launched its D2C online channel DaburShop around December last year. The FMCG major is eyeing `100 crore revenue from the sale of digital-first brands by the end of FY23. “E-commerce is doing very well for us and we have grown by roughly around 50%,” said Mohit Malhotra, CEO, Dabur India, in the company’s Q2 FY23 investor call.
“DaburShop has recently been launched with a limited assortment of products and we are working on progressively increasing the range. This will become a one-stop shop of the entire Dabur range, including ayurvedic medicines. With DaburShop, we can today deliver to almost 90% pincodes within 24-72 hours and are working on progressively increasing coverage across towns,” said Malhotra.
As per a report by investment firm Avendus Capital, the online D2C segment is expected to have a $100 billion addressable market by 2025. India is one of the largest retail markets in the world, projected to surpass $1.7 trillion by 2025 and has added 80 million online shoppers in the past three years alone to reach 130 million.
Department store chain Shoppers Stop launched over 100 exclusive brands on its online channel in 2021, while FMCG major Emami also introduced an online-only hair care range on its D2C platform ZanduCare.com.
For ITC, the ITCstore is operational across 20,000 pincodes with their entire range of products directly available to consumers. “Premiumisation is a key vector in the D2C strategy, and we will continue to innovate and create differentiated and superior product offerings,” said Shuvadip Banerjee, chief digital marketing officer, ITC.
Tata Consumer Products are available on Tata Nutrikorner, a one-stop shop for convenient shopping with expanded pincode reach in Delhi-NCR, Mumbai, Bengaluru, Chennai, Hyderabad and Ahmedabad.
Aditya Birla Group’s house of brands venture TMRW aims to become a $1-billion business, and is expected to invest `500-600 crore by growing its portfolio of D2C fashion and lifestyle brands from eight to 10 by end of this year.
FMCG firm Marico aims to achieve a turnover of about `500 crore by FY24 from its D2C platform Saffola Stores that was launched during the pandemic. “We have observed that consumers prefer to purchase through online channels. Our e-commerce sales soared, contributing 8% of the overall domestic business. Digital is a key pivot for consumer-facing businesses today,” said Sanjay Mishra, COO, India sales & CEO, new business, Marico.
Wipro sells its bathing products and accessories of Wipro Consumer Care on theBetterBath.in, besides selling Aramusk and Yardley London products.
Online D2C channels have also helped brand teams become comfortable with using analytics as a predictive input for faster and effective decision making. The model has been effective in discretionary categories such as beauty and personal care, fast fashion, and personal electronics. Ramanathan feels that these categories have relatively short product lifecycles, wide product portfolio width and significant channel margins that are key drivers that lead to interest in D2C models.