More D2C brands will emerge from tier 2 or tier 3 cities and youth are driving digital commerce with 80% purchases from the channel according to experts speaking at the Internet Commerce Summit in Bengaluru
Bengaluru: Tier 2 and tier 3 cities will drive the next wave of growth for direct-to-consumer (D2C) brands and digital commerce in the country, according to experts speaking at the Internet Commerce Summit held in Bengaluru.
“More D2C brands will emerge from tier 2 or tier 3 cities, driven by increasing aspirations among consumers in these regions,” said Mahesh Patel, co-founder of Cloud Tailor, a D2C mobile app specialising in custom clothing.
As a digital-first brand primarily focusing on the southern market, Patel noted a substantial increase in consumer demand from smaller towns.
Experts agree that Bharat will influence the next wave of growth. Calling attention to the role youth play in driving the demand for D2C brands and increased adoption of digital commerce, Preeti Gupta, chief business officer at Nykaa said, “The rapid and intense growth in the adoption of digital platforms, especially among kids who discover online D2C brands, is directly influencing parents to follow suit and adapt to what their children are suggesting,” comparing this to the time when parents were the teachers and children were the learners. Today, kids are the ones teaching, and parents are the ones learning, she said.
Dhiraj Agarwal, the founder of Campus Sutra, a youth brand for apparel and accessories said that the youth market forms around 60-70% of the entire consumer base. He also calls attention to the different ways in which they shop.
“When examining the digital journey of the youth, it’s not merely about the number of their purchases. The buying behaviour of young individuals in India has undergone a significant transformation, driven by a surge in available options, the ease of accessing products from global brands, and the increasing role of online platforms as decision-makers, even when purchases are made offline. Remarkably, 80-90% of sales in the youth segment are influenced by digital platforms,” he said.
He further highlighted that the challenge for a brand lies not only in determining whether the youth segment is purchasing its products but also in ensuring ongoing relevance.
Addressing the steps for enhanced growth in the future, Gupta from Nykaa emphasised the necessity for the retail industry to integrate technology and artificial intelligence comprehensively. This integration, she noted, extends beyond sales and includes pivotal aspects like supply chain management and customer service.
“Consistently delivering on the core consumer value across all communication channels is essential. Building a cohort and fostering a community around it is equally crucial. The stronger the community, the more robust the brand recall, leading to a potential reduction in marketing expenditures,” added Gupta.
Agarwal of Campus Sutra observed that in the past two to three years, a notable trend has emerged where D2C brands displayed agility during the pandemic, reaping benefits. Although many retailers are currently facing a slowdown post a surge, Agarwal expresses optimism, believing that the statistics will continue to grow in the coming years and India will likely reach Rs 5000 crore in the next six to seven years.
Ashwini Seth, the founder of Dennison India, a Gwalior-based fashion apparel brand, emphasised the importance of emerging D2C brands to diversify into capsules in the future. “We began as a workwear brand and have expanded into various categories like fusion wear, fast fashion, sustainable, etc. This diversification contributes to the stability of the brand,” he added.
They were part of the IMAGES Group’s Internet Commerce Summit inaugural session titled ‘Digital CEOs Click on the ‘Future’ Button’ moderated by Barathi Srinivasan, a partner at global management consulting firm Kearney.
The session delved into various aspects, including the factors driving retail growth, the evolving consumer landscape, the industry’s aspirations for the future in terms of shaping and establishing retail brands and much more.
