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The D2C model has introduced several digital-first brands to the Indian consumers. This trend has gained momentum due to the rise of e-commerce platforms, social media and the increasing desire for unique and personalised products.
How has the D2C story evolved?
“When we started trying to build a brand, people told us if you don’t have INR 40 crore you will not be able to build a brand,” said Kaushik Banerjee, co-founder and chief operating officer, Sugar Cosmetics in a fireside chat with Devesh Gupta, content lead, product and community, ETBrandEquity at the India Communication Summit 2023 curated by ETBrandEquity.
There is only one way to build a brand and that is by building a product, Banerjee was told. “Then the advice came to push it in the market, basically distribution and third was to get a celebrity and run television ads. Now how to do that being a startup,” he wondered.
From a broader perspective, Banerjee believes that in the Indian market, if one wants to become a large business, they need to cross the D2C step and become omnichannel.
Speaking of communication, he mentioned that new age brands have now realised that communication is a two way street. “Today brands are active in talking to their consumers,” Banerjee said.
He however added that it is uncertain how a two way communication would work for a behemoth like Godrej, Marico or Unilever, who have millions of consumers. “But for the new age brands, it does.”
The key to the right communication is to get the consumer to stop scrolling through social and take the communication in.
Normally the target audience for a digital first D2C brand would be millenials. Banerjee too shared that Sugar Cosmetics started off as a brand creating products for the millenials. “But now, millennials are older. I am a borderline millennial,” he joked.
The brand is now even looking at how to communicate in the right way with Gen alpha and Gen Z.
Giving the example of Apple as a brand, he said that it started off by catering to a passionate group of creators. It communicated itself as a creators’ tool. “Initially they never showed a phone. They showed a picture and said shot on an iPhone,” Banerjee pointed out as he spoke on how Apple has been very vocal about its core communication.
Speaking of global aspirations for D2C brands, Banerjee said that he doesn’t think it would be as easy.
He even pointed out that today, a lot of legacy brands are constantly being challenged by aware consumers. “Ten years back there was nothing called zero trans fat, someday someone decided to speak about it and now even a lot of legacy brands have it on their packaging,” Banerjee shared.
Sharing Sugar‘s strategy and importance of good packaging, he mentioned that when they started, they realised that a good looking package can make the consumer stop scrolling and look at the product. “Initially, legacy brands also didn’t focus on packaging much. Now they do,” he said.
Concluding, Banerjee shared that he felt a little sad about the fact that a lot of people launch a brand and immediately start discounting. “Someone has told them that is how to build a brand. Giving heavy discounts in the beginning of brand building will separate winners from losers,” he said.
He advised that it is very important to stay patient. “Brand building doesn’t happen on steroids,” he added.
High-income shoppers splurged on clothes and accessories as they returned to their pre-pandemic lifestyles, especially during the wedding season between January and March. Cooling inflation and some softening in raw-material costs also helped.
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