D2C a realistic alternative to traditional business
Entrepreneur magazine|May 2021
D2C has been quite the rage. As an emerging business model, it has garnered quite a large audience and has been a solution to the problem called Covid. D2C has come to the fore largely due to the pandemic and has become bigger than ever with D2C brands competing with established brands. With more and more D2C brands coming into the market, we discuss the future of the D2C brands. Pankaj Makkar, Managing Director, Bertelsmann India Investments in conversation with Ritu Marya, Editor-in-chief, Entrepreneur APAC and India shares why D2C startups are finding strong footholds within local markets in India- as a result of rapid digitization.
Ritu Marya

As we’ve seen, the D2C industry has been growing by leaps and bounds and particularly the Pandemic has come out well in the help of D2C industry, our objective is to understand, what are the opportunities that you see as an investor in the D2C sector? Where do you see the sector emerging and what categories within D2C you see growing bigger and larger?

As an investor, I am genuinely excited for the D2C sector and to get the nomenclature right, the definition of D2C is any brand, product or service which is going directly to the consumer whether it is going through aggregators or online portals such as Amazon, Swiggy, Zomato or Flipkart. Within the D2C sphere, there are large established brands which were otherwise offline, they tested waters with online by going into e-commerce with aggregators like Amazon and Flipkart and how they feel like the online channel has become large enough to have a direct presence, then those brands would of course build their own businesses and sell, then there would be middle brands. Middle brands are retailers and wholesalers who eventually were also exporters of sorts and they are doing relatively decent business of approximately 100-200 Crores and they created a web front to sell. They are well capitalized players and they are now selling directly. Then, there is the lower end of business like social commerce, resorting to social media and influencers-led commerce and home entrepreneurship. Amazon has an extremely large dominant share in the U.S.A., they own 50% of the retailing market but looking at the balanced retailing market that is fundamentally owned by a lot of large brands which are running their own shops. India’s scenario of e-commerce today, the market in the coming time will be worth 50-60 billion dollars but at some point it will become 100-200 billion dollar e-commerce market. Assuming, the D2C is a 30% market which I feel there will be an increase due to the bigger number of SMEs in the Indian market, this market will 30-50 Billion dollars but it might be fragmented at the same time.

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