Demand for DNB and D2C witnessed faster growth than traditional brands in India: Redseer

Digital native brands are changing the E-commerce market with their unique brand positioning, as per Redseer, which also stated that the demand for DNB and D2C brands has witnessed faster growth than traditional brands and they now account for 40% of online sales.

The strategy consultants also said that DNBs, along with D2Cs, have seen a major boost post-Covid pandemic phase. 

DNB brands came into the picture to cater to a niche audience looking for new and specialised products, which large consumer brands didn’t offer at the time. Ecommerce and internet enabled the DNB brands to reach and serve these segments in a viable manner. Apparel brands like Bewakoof were amongst the first DNB brands to set shore, Redseer said.

It also stated that following the increasing growth of eCommerce giants Amazon and Flipkart, the market witnessed the rise of Nykaa, BigBasket, Myntra, and other verticals/super verticals that led to DNB’s growth in BPC, grocery, and apparel. By 2020, DNB, began to gain prominence, especially post-COVID times, as players emerged with differentiated offerings and an omnichannel presence.

As per it, the demand for DNB and D2C brands has witnessed faster growth than traditional brands and they now account for 40% of online sales. This is because of the ability of DNBs to align themselves to the needs of the digital marketplaces and online consumers, as per Redseer.

“They were willing to experiment, launch niche products and invest in digital marketing and discounts. Rapid proliferation of internet and ecommerce also led to emergence of a large number of digitally savvy consumers who had mid- high disposable incomes and wanted to try curated products/experiences. This was further facilitated by horizontal platforms that invested heavily in changing consumer habits to drive ecommerce adoption.”

Redseer further said that DNBs are now increasingly moving towards offline channel and quick commerce. Offline stores continue to be a much larger channel for most categories and selling on offline channel, enables the DNBs to capture a greater share of market.

The offline foray ranges from exclusive stores, to organised retail to even general trade for the bigger digital brands.

As per Redseer, currently D2C brands are a $17 billion industry and are poised to attain tremendous growth at a CAGR of 37% and reach $60 billion by 2026. Several factors including the Covid pandemic, higher internet penetration, growth of digital infrastructure and rise in the number of millennials have fuelled the rise of D2C brands, it said.

Some of the factors that will influence the strong future of D2C model:

some of the factors that will influence the strong future of D2C model are:

• Traditional brands launch digital only brands- Technology and digitisation have changed market dynamics and consumer behaviour. To keep up with mobile, tech-savvy customers, traditional brands introduce digital only brands.
• Continued rapid growth in eCommerce- As the online world continues to grow in importance, reach and influence, the rise of eCommerce comes as no surprise. So D2C brands today have acquired a sense of confidence in the digital medium.
• Further maturity and scale of DNBs, emergence of digital brand aggregators is expected to drive the growth of D2C brands.

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