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Clarity of proposition, focus on consumer insights and using right media and engagement can help D2C ventures attain profitability. According to a report released by MMA Global and Publicis Commerce India, while D2C ventures have been bagging big investments, the majority of D2C businesses in India struggle to attain profitability.
The report, titled ‘D2C Advantage – Guide to Maximise ROI Of E-Commerce Investments, includes survey findings (conducted by Publicis Groupe India and MMA Global India), which revealed that 80 per cent of D2C ventures are yet to achieve profitability. This means merely 12 per cent D2C ventures are declaring themselves profitable. This is even as D2C is one of the fastest growing segments, bagging nearly 42.9 per cent of e-commerce investments in India.
Key challenges
The three key challenges cited by respondents included high customer acquisition costs, operational complexities, and unclear returns on investments, the report noted. “Moreover, while many traditional businesses have ventured into D2C, standalone D2C revenue remains modest, comprising less than 5 per cent of overall e-commerce revenue for 50 per cent of respondents,” the report added.
Anupriya Acharya, South Asia CEO, Publicis Groupe pointed out that India is home to the second-largest online shopper base after China. “The new-age consumer is very much Omnichannel, traversing between the real world and various digital platforms and devices. With the right kind of strategic planning for D2C and complementing it with the right e-commerce channels, brands are sure to see huge success However, in scaling up commerce and particularly D2C, brands need clear, well-defined, and differentiated strategies,” Acharya added.
Unique proposition
The report recommends “razor sharp focus on consumers’ needs” to offer them a unique proposition. It also states that developing consumer insights through data enrichment and analytics is key. “Successful D2C businesses maintain an unwavering focus on consumer experience across all aspects of the customer lifecycle, including acquisition, onboarding, product discovery, personalisation, transaction, service, and loyalty. They consistently analyze end-to-end consumer journeys, identify breakages/ pain points, and devise ways to address them,” it added.
The report also noted that “consistent high-quality creative assets” go a long way in growing awareness of the brand and helping scale up sales.
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