Market Trends of India D2C E-commerce Industry
This section covers the major market trends shaping the India D2C E-commerce Market according to our research experts:
Fashion is Expected to Hold the Largest Market Share
- The Covid-19 outbreak has propelled the traditional retail sectors to shift toward a digital-first, direct-to-consumer(D2C) model. The fashion industry has witnessed a major shift as it adopted and promoted digital transformation.
- India is also witnessing an evolution in consumer types. Women, the new class of consumers, now form almost half of the online shoppers. Consumption trends are also evolving, and large pockets of product and price white spaces remain untapped by industry incumbents. New-age consumers seeking niche and customized products are underserved by traditional players. D2C brands can be noted to target the existing gaps in the fashion industry.
- Moreover, the trending digital platforms have made the D2C model more accessible and reliable for quick and comfortable shopping. The digital platforms have attracted a lot of targeted audiences and added more buyers according to different preferences while indulging in extensive marketing campaigns.
- The players in the market are investing in mergers and acquisitions in order to establish and expand their digital e-commerce footprint. For instance, in February 2022, Aditya Birla Fashion and Retail Limited (ABFRL) announced to set up an entity that will acquire digital brands across fashion, beauty, and other lifestyle segments to build direct-to-consumer brands. The firm will accelerate the process of building the D2C framework and identifying key skills for this entity by tapping into the broader tech ecosystem and will collaborate effectively with its e-commerce partners.
- Furthermore, the increased smartphone penetration and the comfort of online shopping are also driving the e-commerce D2C sales in India's fashion segment. According to Avendus, India has over 700 million internet users, and the start-ups continuously innovate and integrate technology in their operations and offerings. They have seen a rapid surge in their growth and other prospects.
- The start-ups in India benefit from the D2C model for their survival in a competitive marketplace dominated by large players. Indis has over 600 D2C brands, which is witnessing a rise by the launch of emerging start-ups in the market. Furthermore, fashion brands are increasingly focussing on the D2C channel as the growth trajectory in the country has been exponential. Brands like Zivame have reached the INR 100 crore mark within a short period of 7 years setting benchmark growth rates in the country.
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Personal Care to Drive Market Growth
- The shifts caused by the covid-19 pandemic changed consumer behavior, and the country is witnessing the increasing adoption of herbal cosmetics and homemade products. The segment is expected to see a growing trend in the coming years. It is driving growth, and the segment is expected to grow in the coming years.
- India has significant rising players in the D2C personal care segment. The companies like Mamaearth, m-caffeine, Oziva, Sugar Cosmetics, Habbit, Plumm, MyGlamm, and other digital-first personal care brands have successfully carved out a niche in the market. They have developed a robust connection with their consumers.
- According to Invest India, the online shopper base in India is predicted to be the second largest globally by 2030, with nearly 500-600 million shoppers. The D2C Ecommerce will benefit from government initiatives to boost rural broadband penetration within the ambit of Digital India. Such initiatives by the government are boosting the e-commerce sector in India, which in turn is accelerating the D2C e-commerce market in the country.
- The Personal care sector is witnessing rising demand in India, and firms are making strategic acquisitions in order to meet the customer's demand. In December 2021, ITC announced the acquisition of the D2C brand Mother Sparsh, and the company has acquired an 8.70 percent equity stake in Mother Sparsh Baby Care. The acquisition will facilitate access to the fast-growing direct-to-consumer (D2C) space in the 'personal care category.
- Moreover, the brands in the country are expanding their product portfolio by stepping into the personal beauty segment. For instance, in July 2021, Bewakoof, D2C apparel and accessories firm, announced the launch of its beauty and personal care products under the brand Cosmos Beauty.
