The red hot sector, Direct-to-Customer(DTC), is a growing retail trend today because more and more DTC startups are entering the market. DTC eCommerce business model allows businesses to sell their products directly to their target customers without the involvement of wholesalers or third-party retailers. Besides, it also helps businesses to shape the customer experience and build stronger brand-customer relationships.
Numerous brands, like MamaEarth, Boat, WakeFit, MyGlam, etc., have achieved unicorn status and reached a total valuation of Rs 100 crore after adopting the DTC model. Selling products through middlemen was restricting the brands’ access to end-users; however, DTC eCommerce has helped these brands, along with many others, take a leap in the market.
With the ever-evolving internet penetration and adoption of e-commerce, this model is a win-win for brands and shoppers. Customers can directly connect with the brands online to purchase products of their choice. For example, UShop is a DTC company with a network of more than 10 million direct selling partners successfully fulfilling the needs of its target customers.
India has seen a boom in the DTC eCommerce model since the pandemic outbreak. Across consumption cohorts, metros, and tier 1 and 2 cities, people’s buying habits have changed a lot. It feels like digital commerce resides in their minds, hearts, and homes. They frequently choose online shopping for all of their needs.
Numerous Indian companies, like Licious, SUGAR Cosmetics, Pepper Fry, Lenskart, etc., have already implemented this widely popular business model. Similarly, UShop is also associated with well-known brands like Surf Excel, Vaseline, Dove, etc., to promote sustainable living.
5 Reasons Why DTC E-commerce is the Future of Digital Markets in India
Brands now find it simpler to implement DTC strategies because of the expansion of e-commerce and digital media firms. Brands can now approach customers directly, thus eliminating the need for retailers to sell their products. However, with everything becoming digital, customers are spending more time on online platforms and less time in physical stores. A broad range of products from U Shop India thrill millions of households.
Here are the reasons why DTC eCommerce is the future of digital markets in India.
1. Fostering a positive relationship with customers
Direct-to-Customer(DTC) eCommerce allows every brand to connect directly to its customer base. It helps to build better relationships with them and provide the best products that resonate with their needs.
Moreover, by thoroughly comprehending the buyer persona, a business model like DTC brings a brand closer to its clients that fosters a positive brand-customer relationship.
For instance, MamaEarth achieved unicorn status through revenue generation from eCommerce platforms like Flipkart, Nykaa, Amazon, etc. These eCommerce sites account for 90% of their sales.
2. Improves Customer Experience
When a brand is aware of its target audience’s needs, it connects with its customers more effectively. Therefore, DTC eCommerce has made it possible for companies to interact with their target clients directly without the involvement of an intermediary. As a result, the customer experience is improved, and their needs are better understood.
Additionally, strong customer relationships boost client loyalty, which is another crucial element in the expansion of any e-commerce firm. It has helped the development of DTC eCommerce in India to a great extent.
3. Optimized product launches
Direct-to-Customer or DTC eCommerce implies that companies reach out to their customers directly to inform them of newly launched products. Brands employ a variety of channels which include websites, email, social media platforms, and many more, to connect directly to their target consumers.
Through these mediums, a brand can direct its messaging in a personalized and informative way to reach its potential customer base. This is the reason why DTC is the future of digital markets.
4. Helps brands to better understand the demographics
The digital market environment involves only the product from a brand and the customers. When there is no involvement from a third party, a brand understands its customers in a better way. Further, it also helps segment customer demographics appropriately and effectively sell products to them.
Additionally, DTC eCommerce enables brands to gather data about demographics and their purchasing pattern to understand the customers and connect effectively with them.
For example, UShop has transformed people’s lives by understanding the demographics and recognizing their needs. With a holistic approach to making India healthy and Wealthy, it has created a variety of FMCG products that are suitable for every household in the nation.
5. Increasing Customer faith to buy from brands
DTC eCommerce is the future of digital markets because of the changing habits of consumers. The growing digital habits of people encourage them to purchase products directly from brands instead of buying from an intermediary(usually retail).
People are now interacting with brands directly because of the tremendous growth of internet shopping. A report by Statistica suggests that over 55%(approx) of consumers are willing to purchase products from a brand without the involvement of a third party. Also, the DTC market is expected to grow 15 times over 10 years(2015 to 2025).
The reasons which encourage consumers to buy directly from brands can be:
- To obtain detailed information on products offered by the brands.
- To get better prices and a variety of products.
- To get better product recommendations and excellent customer experience.
Conclusion
Due to accelerated digitization and a shift in customers’ shopping behavior, DTC eCommerce is a model worth investing in for your target customers. DTC eCommerce enhances a brand’s ability to communicate directly with its target customer base, elevate brand perception, and foster brand loyalty.
However, such brands should not ignore the power of offline marketing because numerous people still shop offline. As a DTC eCommerce brand, try to capture the pan-India demands by building an offline presence also. It will eventually lead to the growth of online shopping among them.
