D2C companies move over e-commerce marketplaces, ride on “Unbundling of E-commerce”.
India is witnessing a shift of Direct-to-Consumer (D2C) companies from large e-commerce marketplaces to individual service providers across the value chain. From developing the platform (website and apps) to driving discovery through social media and partnering with Checkout network providers to provide a seamless payment experience, D2C companies are looking beyond large e-commerce marketplaces to establish their brands. This is a part of the larger “Unbundling of E-commerce” trend unfolding in India.
While D2C companies were able to get pan-India market access and become profitable courtesy the e-commerce marketplaces, they were unable to build a direct relationship with the consumers and also had to face high commissions. This is being addressed by the ‘Unbundling of E-commerce’ where D2C brands can choose the platform, logistics and checkout network provider of their choice at significantly lower costs than marketplaces.
Brands such as Boult Audio, Hammer, Gizmore, Corseca and Organic India, who began by selling their products through e-commerce marketplaces, have started serving customers through their own platforms as well. According to consulting firm KPMG, the Indian D2C market currently stands at approximately $12 billion in 2022 and is projected to cross $60 billion by 2027, growing at a CAGR of 40 per cent.
“As D2C brands come out of the shadows of the large e-commerce marketplaces, offering a checkout experience similar to these marketplaces becomes important to reduce friction in customer journey. At Simpl, we have built a Merchant First Checkout Network integrated with our revolutionary 1-tap pay which enables a seamless payment experience and customers can also view the status of their shipment like they experience on large marketplaces. This becomes important to ensure the brand constantly receives repeat customers which is essential for its success ,” said Nitya Sharma, Founder and CEO of Simpl.
Currently, over 26,000 small and large merchants including D2C brands and over 50 lakh active customers use Simpl’s 1-tap pay and Checkout Network across the country.
“With Simpl, our conversions grew by 36.2% in 5 months. We also saw an increase of 77% on prepaid share, while our RTOs dipped by 22%. Simpl has been a true D2C enabler for us,” said Gizmore founder and CEO Sanjay Kalirona.
Apart from offering a seamless checkout experience, there are multiple other pain points of emerging D2C brands that need to be solved such as easy access to credit, lack of marketing and legal support among others. Simpl through its D2C Simplified initiative is driving several community efforts to empower the D2C ecosystem and has partnered with nearly a dozen companies over the last 1 year such as Klub, Adyogi and Zolvit to provide support to the ecosystem.