Are Indian D2C startups really D2C?

64% sales are from marketplaces. ͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­ Forwarded this email? [Subscribe here]() for more [Are Indian D2C startups really D2C?]( 64% sales are from marketplaces. Jun 11   [READ IN APP](   The term "Direct-to-Consumer" (D2C) traditionally refers to businesses that sell their products directly to consumers without intermediaries, typically through their own e-commerce websites or physical stores.  [man in orange and yellow floral long sleeve shirt riding motorcycle]( real or fake? Here is the latest data on Indian D2C startups (via ET). About 64% of the overall sales for D2C firms come from marketplaces like Amazon and Flipkart, with brands' own platform accounting for 21% of sales and offline stores contributing 15% of sales. [Upgrade to paid]( .some D2C brands are agreeing to pay up to 30-45% commissions for a spot on quick-commerce platforms as sales on them surge ([via](. This begs an important question (from a position of curiosity and not pointing fingers at their business prop): Are these D2C startups really D2C? What’s D2C? And where is the direct relationship? One of the core aspects of being D2C, i.e. Direct-to-Consumer is the fact that you own a direct relationship with your customer (I am not talking just about the customer data, i.e mobile + email id here, but relationship) - and with ~64% sales being driven by marketplaces, then where is the relationship? [Share]( You can’t even own or influence the customer journey. Tech startups are often known to giveaway their products for free (or massively discounted rate) in the early days, but they do collect analytics/data/ customer feedback in return. But D2C startups? Given that most D2C startups are dependent on marketplaces, there is very little they are getting back in return, right? Of course, startups need to ‘pay’ for distribution and marketplaces strategy is a good place to get stared, but are the ones who are Series B onwards cutting down on marketplaces and driving more sales from their own platforms? I’d love to know. Omnichannel strategy And then there is the omnichannel strategy which is getting popular especially in BPC segment (Beauty and Personal Care) and I’d love to understand the thesis behind the valuation. Eventually, most D2C startups will have to go the offline route to build a connect with the customer - and that means heavy operational expense and a lot of branding / marketing efforts (as opposed to digital channels). The thing is that most D2C startups are valued like a tech startup, but the truth of the matter is that these eventually are operational businesses and I am not sure whether they can hit the exponenential growth curve, without exponential costs (operations + marketing). The big question What’s the real moat in D2C business? What’s your take? PS: You can’t even throw the AI keyword in D2C 😅 [Share Ashish Sinha: On startups, AI and Platforms]() You're currently a free subscriber to [Ashish Sinha: On startups, AI and Platforms](. For the full experience, [upgrade your subscription.]( [Upgrade to paid](   [Like]( [Comment]( [Restack](   © 2024 Zakti Techmedia Private Limited 677, 27th main, HSR Layout, Bangalore-560102 [Unsubscribe]() [Get the app]( writing]()