India is becoming a hotspot for D2C, especially post-Covid. In the backdrop of the pandemic, Indian consumers have been nudged to move to digital platforms. Having experienced the convenience and personalisation offered by e-commerce, they are now constantly looking for a superlative and seamless customer experience.

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Currently, the country has over 800 D2C brands, and this will only grow given the congenial economics (GenZ & millennial consumers with high spending power seeking authentic experience). D2C has the potential to touch $60 billion by 2025, according to the Shiprocket CII report.

This search for the authentic experience, for instance, is the starting point for popular Indian coffee brand, Sleepy Owl – while at law school, Sleepy Owl Co-Founder Arman Sood wasn’t able to get good coffee. His research showed that India is one of the world’s largest coffee exporters, but surprisingly the country didn’t have any good coffee brands (artisanal coffee!!).

For Mohit Sadani, Co-Founder, Moms Co., the Aha moment came when he found out his daughter had very sensitive skin and India had no products targeted at children (with sensitive skin). He launched Moms Co. in 2017. The brand’s goal was to address the gap of toxin-free products in the Indian market for prenatal and postnatal consumption, and baby care.

In both instances, these brands created a market category. While Sleepy Owl started with cold brew, the Moms Co looked at new-to-be moms and then extended an array of products within the brand.

Lessons:

• If you are an aspiring D2C brand, look at categories or building a category that incumbents wouldn’t look at

• Find the missing gap which needs to be serviced

• Look at the total available market, cost of goods sold and lifetime value.


Creating the Customer Connect

According to Ankur Khaitan, Principal, Fireside Ventures, aspiring D2C entrepreneurs have to ask certain fundamental questions:

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On categorisation and market opportunities:

• What needs to be done for a category to be created?

• How do you tap the opportunities available in India right now?

• Are there signs of tailwinds that you look at?

• How are you thinking of creating your business into your brand? How do you make consumers associate with your brand, have a deeper engagement?

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On building profitability:


• Do I need to be profitable?
• COGS should allow you to scale up your brand as your business grows, but how do you keep it low?

Khaitan also advises D2C companies to look at other metrics including the cost to market to sell the product, cost of customer acquisition and lifetime value.

On creating deep customer relationships:

• Are there channels giving high repeat consumers?
• Are you getting customer feedback? Is there a customer loop in place?
• How is the post purchase experience for each customer?

• Is there an early sign of consumer love?

Building market with minimal spends

Trust is a critical currency when marketing D2C brands. After all, D2C brands are all about selling to the consumer directly. “For us, certifications played an important part in building trust,” revealed Mohit Sadaani, Co-Founder, The Moms Co. Given that The Moms Co sells products to expectant mothers, new mothers and children certifications are important since it reflects product efficacy. Besides this, targeting the right influencer groups who will provide word-of-mouth publicity, good product packaging, and superlative customer experience compound together to build the Cycle of Trust.

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As Khaitan cautions, if after D+45 or D+60 the consumer doesn’t buy your product again, this calls for a check-in and course correction; do it sooner instead of waiting too late.
Net net – Always listen to the customer and keep your ears to the ground!

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