D2C’s Dilemma- My way of Interpretation.

 

Communication is very dynamic nowadays; many new



things are evolving differently. Technology is making it dynamic and playing an
important role in our day-to-day life. The pieces of information which once
were secret and were handy with few people in the market, now it is one finger
click on our mobile. Helping businesses to think beyond the peripheral and
time. The same way consumers are getting market updates every second and AI on
social media is capturing every move of their thoughts and trying to get the
inside of our minds. Especially when we are searching grocery, home appliances,
electronics or any other products on a website, means we are exposing our
interest to the world.  They are forcing us to think about their products
and trying to change or judge our preferences, interests, and even hobbies.  Changes
in e-commerce take place when customers’ preferences change. Exactly
technology companies through a social platform, Application or information
through other means trying to change our preference and interest.

Let's validate this thought of change in consumer
preference. 

Let’s move to the year 2000  and try to memorize the market scenario
especially in Retail. you will find products that are approached to consumers
that such a brand is best for health etc and promotions were done through
Newspaper, Radio, and Television. Few standalone supermarkets were there in
metro cities which were showcasing the merchandise in the best way. In the
modern world, retail was evolved 3 decades ago so consumers are aware of brand
and branding. 

Indian retail is vast in terms of size and rise so
opportunities are there in a very ample way.  $500 billion grocery retail
size is huge for an unorganised sector here in India. Covid brought new
synergies and opened a new line of business for companies or start-ups who are
willing to use this ecosystem for more fields to plough.  Yes, change is
unavoidable but persistent so things move on for new dynamics and new heights
to touch. A consumer must have felt the touch during the covid wave, how
e-commerce companies facilitated them and fulfilled their daily needs
unorganized. Also, numerous new products have been seen and tasted.  I am
very close to this ecosystem of retail so I can feel that things are going in
the right and disruptive way. Startups and organizations started introducing
FMCG products across categories and getting huge investments. 

Terminologies have been changed significantly,
dramatically, Consumer and logically but products remain the same but the way
new products are introduced in the market is changed. What are those
terminologies?  Let's figure it out and explain how it is forcing us to
think and adapt.

Consumer’s preference is changing towards hygiene,
sanitation, convenience, quality, and health and welcoming brands entering
these segments. Well, now directly come to the article about D2C ( Direct to
consumer).  This is new terminology for brands reaching directly to
consumers via e-commerce platform or direct distribution like direct marketing
but still, we can find lots of change in way of working and making its market
fit.  Old terminologies are used by the company to consumers i.e. C2C,
Private label for standalone supermarkets, and consumer brands in the
fast-moving segment.  Let’s jump to the names which got fame and name
during the last two or three years, most brands got earmarks only after
2015. 

Below is the list of a few known startups in D2C
brands,  let’s figure out how many are available near your Kirana
stores.  Stand-alone stores of a few D2C startups are now there in tier I
& Tier-II cities like Lenskart, firstcry are very visible and consumers
footfall is there in these physical stores. They are asset-heavy startups, yes
but still brands like mama earth and beardo are very much on the b2c commerce
platform and doing great. 

Startups	Starting	Segment	Life Cycle as on date
Lenskart	2010	Eyewear	11
Firstcry	2010	Baby Care	11
Healthkart	2011	Fitness Products	10
Pepperfry	2012	Home Furnishing	9
Bewakoof	2012	Clothing	9
Plum	2014	Organic Beauty Products	7
Noise	2014	Electronic Lifestyle	7
MyGlamm	2015	Beauty Products	6
Sugar Cosmetics	2015	Beauty Products	6
Licious	2015	Non-Veg Segment	6
Country Delight	2015	Dairy	6
Melorra	2015	Jewellery	6
Candes	2015	Home Appliances	6
Bombay Shaving Company	2016	Men's Grooming	5
Mamaearth	2016	Personal Care	5
The Moms Co.	2016	Healthcare	5
Wakefit	2016	Home Furnishing	5
Wow Skin Science	2016	Skin Care	5
BoAt	2016	Electronic Lifestyle	5
Sleepy Owl	2016	Beverages ( Coffee)	5
Flatheads	2018	Footwear	3
Indus valley	2016	Kitchenwear	5
Mcaffeine	2015	Personal Care	6
Vahdam	2015	Beverages ( Tea )	6
Nyumi	2019	Nutraceutical	2
Onlife	2019	Healthcare	2
Mensa	2021	Fashion & Apparel	Unicorn
Monrow	2016	Footwear	5
True Elements	2014	Plant Based Food	7
Juicy Chemistry	2014	Skin Care	7
Oziva	2016	Plant Based Food	5

Do we think that these all are newly invented concepts or ideas or they
were not in existence before or have we never seen such products at physical
stores?  They were there but we hardly know the name not because we are
not using them but we are treating those brands just as a product or
commodity.  We know them by the name Private Label, mark, brand. 
Status etc. but now it is the era of start-ups with new ideas and with speed to
grow in a short period.

Human psychology is unpredictable and hard to understand. You must have
heard a famous sentence mostly used by a politician “ that, the memory of
general people is very weak so remind them at the very start of election
otherwise they will forget the gold you have given them during your
term”.  This same saying seems to fit with the end consumer, but not every
time.  The brand is a brand that is inherent sometimes in our memories.
Things are changing very fast which further pressurizes individuals to think
about the communication which is done by the brands, by the advertisers, by the
social media platform, and by word of mouth. The continuous hammering of events
is activating the subconscious mind to be addicted to those things which we
should not try but buy.

So far D2C brands that are selling their products through eB2B are in good
shape but if they want to grow what will be their strategy. Till they are
asset-light, must have positive EBITDA but tomorrow when they think to expand
in other territories?  Will e-commerce help them to reach there?  Or
they will come with an asset-heavy model of physical stores. 

 Questions are in Queue? 

 Let's surf with me with a few questions and will find the answer near to
your thoughts.

·         Startups have plenty of
commitments owed to their investors & other stakeholders which

         they need to fulfil within five years
i.e. short time frame,  do or die situation.

·         Scale to the tune of the top line
is a must – big accelerator of valuation

·         Burning money is unavoidable

·         Every time present in the market
to raise money

·         Market expansion is a must 
-  a milestone to achieve for greater valuation: But where to

         expand?

So far the presence of D2C brands are on the eB2C platform, I am okay
with their performance and agree that they are purely D2C and directly reaching
consumers without many market intermediaries or existing distribution channels.

But, further, if I think that they will expand the business to other
verticals or want to join the traditional distribution then what will
happen?  Again differentiation between GT and MT will happen, the same way
we need to change the margin structure. Finally, they will come to Retailers.
This would be done for sure because without the help or mediation of retailers
they will not reach to masses.   I must say, welcome to the Retail
network of Kirana Retailers. 

Problems start from now which they will feel starting from onboarding Super
Stockist, C&F,  distributors, Sales & Marketing staff, and backend
staff heavily. City-wise and state-wise distribution networks need to be
developed, stock will move from hand to hand adding cost at every stage. 
Challenges will come when the brand will start communication with consumers
i.e. demand creation.  Without proper distribution and availability at
every Kirana store, things of ATL/BTL marketing will not work, this will be a
failure and the brand will be out of sight, out of mind immediately. 
Dealing with a traditional mindset is not an easy task.  Kirana Retailer
and distributors both are business people, they have their own way of working
and dealings. The mere use of technology will not change their way of working.
They are masters, running businesses at low operating costs.  “penny wise
pound foolish” will change the mind of the brand owner. So, beware of this
mindset.

This is a long story of the brand’s journey through a traditional
system.  We can make this journey short & sweet. 

 “ Placement of new products on the  Grocery Retail shelf is a mammoth
task & hard to deal with a traditional mindset, Journey of the brand can go
long” ……… by Bhardari

No Worry,  here in Jaipur, we are making things easy by way of our
unique Kirana retailer’s network. This is a confluence of traditional and
innovative distribution systems, techniques, and best use of technology. 
A network of uniform retail stores across Jaipur city will help new D2C brands
to place their products and trigger a call for action for customer footfall at
these stores.  On a single click, the entire retail network is available
for distribution and will be available for centralized marketing activities.
The brand will have large coverage and penetration.  In a shorter period
of exploration, we will make the product /brand market fit in the
territory.   The power of empowering the existing ecosystem is more
energetic, economic, scalable & profitable than creating a new competition
so we believe in empowering them and connecting them with our technology stack.
I believe in connecting and empowering rather than disrupting.  Disruption
is a kind of disturbance in the ecosystem which can not be fruitful for the
system and finally the economy. 

Come to us to become part of our journey and introduce your D2C brands to
retailers through our platform. We are an offline- platform driven by
technology.

D2C is not a dream but again it will take time to come to reality i.e. on
the retailer’s platform. We are there to make it market fit.

Writer :: Balwant Singh Rana,

Written on 18.11.2021

Jaipur, Rajasthan

India,