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The D2C revolution: How Indian brands are redefining retail

EntrackrEntrackr · 11m ago
The D2C revolution: How Indian brands are redefining retail
Medial

India’s retail landscape is witnessing a seismic shift, especially post-pandemic, with direct-to-consumer (D2C) brands spearheading the transformation that challenges the traditional business models. By cutting out intermediaries, these brands have established direct connections with consumers, paving the way for a new era of personalized and efficient commerce. The D2C model enables brands to control the entire customer experience, from manufacturing to sales and customer service, which has proven to be a significant advantage in today’s competitive market. According to a recent report by 1Lattice and Sorin Investments, the D2C market in India is projected to reach a size of $61.3 billion by the financial year 2027, growing at a compound annual growth rate (CAGR) of approximately 38%. This report provides an in-depth exploration of the dynamic D2C landscape in India, analyzing unicorns, soonicorns, and notable D2C brands while evaluating the key growth drivers, challenges, and future outlook. [Indian D2C startups raked in $5 Bn in funding since 2021] As per startup intelligence platform TheKredible, Indian D2C startups have attracted over $5 billion in funding across 520 deals since 2021. The number of deals was 132 in 2021, 166 in 2022, 137 in 2023, and 87 in H1 (first half) of 2024. Leading the charge in fundraising, eyewear platform Lenskart, which also operates as a marketplace, accumulated $1.12 billion over the past four years. Meat delivery startup Licious tagged along with $587.1 million. E-commerce roll-up brand The Good Glamm Group followed with $221 million, consumer electronic company boAt with $166.7 million, and health supplements platform HealthKart with $135 million. Manufacturer of makeup products SUGAR Cosmetics, meat delivery firm FreshToHome, beauty brand MamaEarth, beverages company Bira 91, and producer of dosa-batter ID Fresh Food also managed to grab larger cheques during the years. [Top revenue generating D2C brands in FY23] In the fiscal year 2023, as many as 177 D2C brands collectively generated Rs 34,360 crore (approximately $4 billion) in revenue. Lenskart emerged as the leader, with a revenue of Rs 3,788 crore. Aman Gupta-led boAt, jewelry brand Caratlane, IPO-bound Kushal’s, and consumer electronic firm Noise followed with operating revenue of Rs 3,376 crore, Rs 2,168 crore, Rs 1,909 crore, and Rs 1,423.13 crore respectively. For the complete report, visit here. [Top profit/loss-making D2C brands in FY23] Despite the overall positive financial performance, profitability remains a challenge for many D2C brands. Only 24 of the 170+ companies considered in this report were profitable as of FY23, with Kushal’s leading the pack with Rs 157.28 crore in profits. Kushal’s is followed by Caratlane, Oziva, Rare Rabbit, Technosport, Urban Ladder, Zappfresh, Lahori, Minimalist, and Boult. On the other hand, The Good Glamm Group reported the highest losses, amounting to Rs 916.8 crore. Licious, Bira91, FreshToHome, Curefoods, Purplle, Wow Skin Science, Pepperfry, Wingreens Farms, and Bluestone are next on the list. [D2C brands with best and worst burn rate] As per the data sourced from TheKredible, beauty brand WishCare had the most healthy burn rate (Rs 0.77) in FY23 followed by sports apparel maker TechnoSport and apparel brand Rare Rabbit with Rs 0.86 and Rs 0.90 while Urban Ladder, The Divine Foods, and Kushal’s are next in the list, each having a burn rate of Rs 0.91. Pet-care startup Wagr, meat delivery firm FreshToHome, fashion startup Newme, Deepika Padukone’s 82°E, and luggage brand Uppercase are among the D2C brands having the worst burn rates at Rs 5.83, Rs 4.88, Rs 4.20, Rs 3.18, and Rs 3.08. Download the complete report at TheKredible. It’s worth highlighting that TheKredible has calculated these burn rates by dividing the total expenses of brands by their respective operating revenue. [Fashion, F&B, and Personal Care Brands Lead among D2C Categories] D2C brands span a diverse range of categories, including Food & Beverages, Personal Care, Apparel, Health & Wellness, Pet Care, Consumer electronics, Home & Kitchen, Jewellery, Furniture, Footwear, Eyewear, Travel Accessories, Decor, and Accessories. Among the 177 companies considered in the report, 48 belong to the Food & Beverages, contributing 18% to the total revenue generated by all the companies collectively. Personal Care brands (38) are next, forming 20% followed by 25 Apparel (27.72%), 21 Health & Wellness (6.7%), and 7 Pet Care (4.37%) brands. Among the D2C brands fashion (Apparel, Jewellery, Footwear, Eyewear, and Accessories), Food & Beverages, and Personal Care are the three largest categories attracting a large set of consumers. In contrast to more established D2C players like Mamaearth, Sugar Cosmetics, and boAt, newer entrants in fashion, footwear, and food delivery are aggressively adopting a hybrid business model. Unlike their predecessors, these new D2C brands are rapidly expanding into physical stores. Companies like Snitch, Mokobara, and Pilgrim are prioritizing an omnichannel approach, opening brick-and-mortar outlets soon after securing initial funding. [Conslusion] The D2C landscape in India is rapidly evolving, driven by factors such as increased internet penetration, rising disposable incomes, and a growing demand for personalized products. Since the onset of the COVID-19 pandemic, D2C brands have gained significant traction, challenging traditional retail models and reshaping consumer behavior. These brands are capitalizing on a data-driven approach to expand their physical presence, contributing to a significant shift in the retail ecosystem. The sector’s growth has been fueled by substantial investments underlining the growing investor confidence in the D2C model. As the market expands, D2C brands are also playing a crucial role in job creation, technology adoption, and supply chain innovation. However, they face challenges from intense competition and shifting consumer preferences, making innovation and customer retention essential for long-term success. Government initiatives, such as the Digital India push, the expansion of internet connectivity, and support for local businesses, are creating a conducive environment for D2C brands to thrive. As the e-commerce ecosystem matures, these brands are well-positioned to capture a significant market share.

Mamaearth ranks as India’s 3rd largest skincare brand: Euromonitor

EntrackrEntrackr · 9m ago
Mamaearth ranks as India’s 3rd largest skincare brand: Euromonitor
Medial

D2C brand Mamaearth announced on Thursday that it has been ranked as the 3rd largest skincare brand in India, as per Euromonitor International. The Gurugram-based company also rose to the 9th spot among India’s top beauty and personal care brands, up from 13th last year. The latest Euromonitor report highlights the growing impact of direct-to-consumer (D2C) brands, with Mamaearth, under Honasa Consumer Ltd., gaining considerable market share. Honasa Consumer’s second brand, The Derma Co., has entered the top 20 skincare brands in India, emerging as the largest active-based skincare brand in the country. Varun Alagh, co-founder and CEO of Honasa Consumer, attributed this success to the company’s commitment to natural, toxin-free products and the trust of Indian consumers. Honasa Consumer’s expanding portfolio now includes brands like Aqualogica, Dr. Sheth’s, and BBlunt, catering to the evolving needs of Indian consumers. Mamaearth, Honasa’s flagship brand, reported a 17.6% quarter-on-quarter revenue increase, reaching Rs 554 crore—its most profitable quarter to date, with a profit after tax (PAT) of Rs 40 crore. Last month, early investors divested shares worth Rs 1,600 crore ($190 million) in the company.

Titan’s Helios to launch exclusive luxury watch stores as demand surges

LivemintLivemint · 10m ago
Titan’s Helios to launch exclusive luxury watch stores as demand surges
Medial

- Helios—The Watch Store is planning to launch exclusive outlets for luxury watches in India. - The first store, called 'Helios Luxe', will open at Delhi’s T1 terminal this month, followed by stores in Goa, Chennai, Bengaluru, and Mumbai. - India has shown the fastest growth in demand for Swiss timepieces globally, with imports in this category rising by 23% in the first nine months of 2024. - Helios is the fastest-growing segment for Titan Co. Ltd's watches and wearables business, with revenue increasing by 18.4% in FY24. - Helios plans to expand its bridge-to-luxury portfolio by launching three to four new brands this year. - The company is intensifying its digital marketing efforts, with 25% of its digital advertising budget being spent on Instagram to attract millennials and Gen Z consumers.

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