Over the past two years, approximately 150 to 200 direct-to-consumer (D2C) brands have diversified into new offline channels and quick-commerce platforms, as physical retail still constitutes more than three-fourths of all retail sales in India. Since 2016, over 600 D2C brands have initiated operations, attracting more than US$ 4 billion in investment over the past three years. However, the expansion into new stores has necessitated additional capital amid a funding winter in recent quarters.

"Over the past 12 to 18 months, we have dedicated our efforts to providing growth capital and collaborating closely with our portfolio brands in devising and executing their multi-channel expansion strategies. Our direct involvement with brands like WickedGud has yielded significant outcomes, including their presence in over 200 Reliance Retail stores," said Cofounder of GetVantage, Mr. Bhavik Vasa. He added that they secured exclusive distribution partnerships for brands like NOTO ice cream, Arata, BlueTokai, and EatBetter.

The India D2C market was estimated at US$ 16.9 billion in FY23 and is projected to grow at a CAGR of 38%, reaching US$ 61.3 billion by FY27. For instance, Udaipur-based D2C clothing brand Beyoung plans to open 100 stores by March next year and boost its gross merchandise value to US$ 77.6 million (Rs. 650 crore) by 2027. "As we strengthen our omnichannel presence, we focus on mass markets in India's tier 2, 3, and 4 cities, with plans to expand globally, especially into the MENA regions. We're set to launch 30 stores by December 2024, aiming for 300 stores by 2027," said co-founder of Beyoung, Ms. Shivani Soni.

Pee Safe has established a presence in nearly 25,000 retail outlets across over 100 cities with a distribution network of more than 15,000 pharmacy stores. "We are enhancing our market presence in the metro, tier I, and tier II cities, leveraging the online traction in these areas and expanding our in-store product mix," said the founder of Pee Safe, Mr. Vikas Bagaria.

Detailed Explanation

Offline Expansion and Quick-Commerce Platforms

The shift towards offline channels and quick-commerce platforms by D2C brands is driven by the dominance of physical retailing, which still accounts for more than three-fourths of all retail sales in India. This transition allows brands to tap into the vast consumer base that prefers in-store shopping experiences. The entry of 150 to 200 D2C brands into these channels over the past two years underscores a strategic move to capture a larger market share and enhance brand visibility.

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Investment Trends and Market Growth

Since 2016, the D2C market in India has seen a significant influx of new brands, with over 600 brands starting operations. The sector has attracted more than US$ 4 billion in investment over the past three years. This capital influx has fueled the growth and expansion of these brands, despite the recent funding winter that has made accessing capital more challenging. The Indian D2C market is on a robust growth trajectory, with its size expected to increase from US$ 16.9 billion in FY23 to US$ 61.3 billion by FY27, growing at a CAGR of 38%. This growth is indicative of the increasing consumer preference for D2C brands and their ability to meet evolving market demands.

Multi-Channel Expansion Strategies

Brands are increasingly adopting multi-channel strategies to maximize their reach and sales. GetVantage, a prominent player in providing growth capital to D2C brands, has been instrumental in helping brands like WickedGud expand their presence. WickedGud, for example, has successfully entered over 200 Reliance Retail stores. Similarly, exclusive distribution partnerships have been secured for brands such as NOTO ice cream, Arata, BlueTokai, and EatBetter, highlighting the importance of strategic collaborations in expanding market presence.

Omnichannel Presence and International Expansion

The Udaipur-based D2C clothing brand Beyoung exemplifies the ambitious expansion plans of Indian D2C brands. With plans to open 100 stores by March next year, Beyoung is targeting a gross merchandise value of US$ 77.6 million (Rs. 650 crore) by 2027. The brand is focusing on mass markets in India's tier 2, 3, and 4 cities, while also planning to expand globally, particularly into the MENA regions. Beyoung aims to launch 30 stores by December 2024, with a goal of 300 stores by 2027.

Enhanced Market Presence and Distribution Networks

Pee Safe has established a robust market presence with nearly 25,000 retail outlets across over 100 cities and a distribution network of more than 15,000 pharmacy stores. The brand is enhancing its market presence in metro, tier I, and tier II cities, leveraging online traction and expanding its in-store product mix. This approach not only strengthens Pee Safe's market position but also ensures a wider reach and availability of its products to consumers.

Conclusion

The D2C market in India is undergoing a significant transformation, with brands increasingly venturing into offline channels and quick-commerce platforms. This strategic shift is driven by the need to capture a larger share of the retail market, which is predominantly physical. The substantial investment of over US$ 4 billion in the past three years and the expected market growth to US$ 61.3 billion by FY27 highlight the immense potential and dynamism of the Indian D2C sector. Brands like Beyoung and Pee Safe are leading the way with ambitious expansion plans and robust distribution networks, ensuring their presence in both domestic and international markets. As the D2C landscape continues to evolve, strategic investments and multi-channel expansion will be key to sustaining growth and achieving market dominance.

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