D2C — About time to be taken seriously? Is it applicable for all categories?

Back to writing on E-commerce, trying to be more regular.✍️ I was deliberating on how D2C is being currently embraced, especially considering the Indian context.

CPG distribution system was a smooth operator fine-tuned over decades until the pandemic came along. Companies leveraged other mediums to keep their customers happy by making them available on the likes of Amazon, Flipkart, BigBasket, JioMart, etc.

Case in point — ITC partnered with food tech majors Zomato and Swiggy, hyperlocal delivery startup Dunzo, and others.

Image Credits: ITC

Companies are increasingly looking to double down on their own portals due to multiple reasons — Understanding changing consumer preferences, leveraging ever-increasing data & reducing dependence on retailers. Example — ITC rolled out ITC Store, which sells the company’s entire range of FMCG brands. HUL did the same with U Shop.

Image Credits: U Shop

Multiple research surveys show that majority of a customer’s monthly shopping basket is made up of grocery items, with home & personal care comprising the rest. Within foods, two-thirds are mostly unbranded products such as vegetables, etc. So HUL’s and ITC’s D2C websites are competing for a small portion of the customer’s wallet share.

I believe brand-specific D2C efforts in some categories could have more traction. Skincare startups such as Mamaearth, WowSkin, and MyGlamm have shown FMCG majors the potential of D2C in this category. The same was observed in HUL’s latest investor quarterly results.

Cosmetics & Fashion is also another similar area — where the likes of Nykaa, Purplle & AJIO are leveraging a combination of Digital + Physical channels. (Omnichannel)

Going forward, D2C is a term that will certainly feature more frequently and prominently. Other categories where the D2C approach could work are niche products that have a small, but high-spending, customer base.

🧠But it may not be taken all that seriously except in the case of a handful of companies and brands and by a specific set of customers.

Feel free to reach me at forritesh@gmail.com for feedback, questions, and ideas. Thanks for reading!
Disclaimer: credits to all images used in this post are attributed to the original source in the captions. The author takes no credit for the awesomeness of these images and consequently all copyright claims should stay within the original source’s boundaries.



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