What works for brands – a D2C enabler platform or an e-commerce website?

Recently, a home-grown, multi-brand, D2C enabler platform was launched in India- D2C Ecommerce. In the recent times, several other such platforms, like Shopify and Shiprocket, have been launched in the Indian market.

Home-grown, new-age brands no longer rely only on e-commerce marketplaces to reach out to their target audiences. Through these D2C enabler platforms, brands are redefining their marketing strategy.

India’s D2C market has grown exponentially over the last few years. Today, consumers spend a lot of time online, and brands are scaling their digital marketing efforts to boost their ad spends across different channels on the Internet.

As per a report by e-commerce enablement platform Shiprocket, on the D2C market in India in collaboration with CII (Confederation of Indian Industries) and Praxis Global Alliance, D2C is a $12 billion market and is witnessing remarkable and rapid growth. The report states that several D2C brands in India have crossed Rs 100 crore revenue in three to five years after the launch.

Major e-commerce marketplaces, like Amazon and Flipkart, have played a vital role in the success of D2C brands, driving over 50% of their sales volume. Brands now want to strengthen their presence online and solidify their own D2C channels.

But why are brands taking the D2C route? How are e-commerce giants different from D2C enabler platforms?

D2C enabler platforms empower a brand to build its online stores seamlessly. A marketplace, on the other hand, acts as a separate sales and user acquisition channel for a brand. Unlike marketplace portals, the D2C channel enables the brand to sell and interact directly with the consumers, without any third party involvement.

This helps brands to understand the complete buyer journey and control their brand messaging – right from merchandising, product pricing, packaging & logistics to crafting the post-purchase experience.

Ritika Taneja, head of e-commerce, GroupM India, comments, "Brands can personalise the user experience, and introduce the consumers to more products and sub-brands based on user affinity and browsing. Brands get access to first-party data, which they can later use for remarketing purposes."

Chirag Taneja, co-founder at GoKwik, adds, "Brands taking the D2C route, is a secular shift that is happening today. This is because marketplaces are maturing and reaching a stage where commissions are increasing. Hence, building a profitable brand is getting marginalised."

Taking the example of leading audio devices brand boAt, Taneja mentions, "boAt has a huge dependency on marketplaces. Around 85% of their sales come from them. Earlier, the brand used to sponsor Flipkart or Amazon sales, but now it wants to focus on D2C, as a channel. D2C gives the brands access to data, and is faster and resonates more with the consumers."

Sonakshi Nathani, co-Founder & CEO, Bikayi, comments, "With e-commerce giants such as Amazon and Flipkart, there is a lack of personal touch between the shoppers and the brands they are purchasing from. Standalone websites by D2C brands have widgets and chatbots which ensures higher user engagement and product awareness."

She adds, "With D2C sites, a brand can leverage the customer data for better acquisition, conversion and re-targeting. On a D2C website, there are better ways of engaging customers using content (such as blogs and Instagram feed) than through e-commerce marketplaces."

Samir Gupta, chief business officer - Bzinga, states, "Brands are taking the D2C route due to the need to democratise the seller ecosystems. Currently e-commerce enablers and traditional distribution models are almost mirror images of each other, barring commonalities such as digitisation of journeys, enhancement of customer experience and transparency of transactions."

Homegrown brands strengthen online presence

Today, home-grown/local brands have an additional opportunity to understand the consumer journey and grow their business by building D2C as a separate sales channel.

Taneja mentions, "Collaborating with marketplace platforms to boost their brand awareness and sales, plays an important role in building brand discoverability online."

E-commerce has seen an exponential rise in India over the last decade. However, COVID changed the business dynamics/models. Now, brands have started to realise the side effects of finding customers in online marketplace.

Taneja mentions, "A few years ago, when Amazon and Flipkart were in the making, they were spending dollars to get hold of the customers. Now, things have changed. New brands will not be created on marketplaces. If you want to sell the consumer a new story, then a marketplace like Amazon is not the right place, as the intent is very different there. Hence, you open up a D2C platform to explain your story, how your products are different, in a better way."

To propel the growth of early-stage D2C and e-commerce startups across the length and breadth of India, Shiprocket recently collaborated with Startup India for a programme ‘D2C 2.0’. During the three-month accelerator program, Shiprocket has supported D2C startups with top-tier logistics privileges and e-commerce services.

Challenges

Since many brands typically start their journey on D2C, they spend a lot of money on these platforms to achieve a product fit enough for the market. So, the brands face a lot of challenges.

"One of the big challenges is that in India, after the TikTok ban, brands have been left with a very few channels to acquire customers. Hence, the cost of acquisition has gone up. The other challenge is that our country is very widespread that leads to higher logistics expense. Back in 2019, people were not shopping using D2C. But now, it is changing and people are shopping outside Amazon/Flipkart also," Taneja comments.

"Some challenges, while using the D2C enabler platform, include lesser room for customising the pre-provided web store layouts versus the open-source self-hosted platforms. Although D2C enabler platforms provide multiple plugins and themes, the charge for every small integration may pose a challenge, as brands look to scale their businesses (to a higher level)."