Sales on direct-to-consumer company websites grew significantly during the festive season compared to sales on marketplaces like Amazon and Flipkart due to effective marketing campaigns and faster order delivery.
Nestasia is a Kolkata-based home décor and accessories manufacturer that generates more than 70% of its sales from its own website and offline, said co-founder and CEO Anurag Agrawal store, reducing its reliance on online markets to double digits. Mint.
Jatan Bawa, founder of Shark Tank-famous oral care brand Perfora, said that more than 50% of sales during the holiday season came from its website, marking a major shift in consumer brand strategy.
According to GoKwik estimates, during the recent promotion period, the order growth of consumer brands exceeded that of e-commerce platforms, with order volume increasing by 64% compared with last year, while the order growth of e-commerce platforms was 26%. The e-commerce enablement platform works with over 10,000 consumer goods companies including Lenskart and Shoppers Stop to help them manage orders, expand cash on delivery and reduce returns.
Chirag Taneja, co-founder and CEO of GoKwik, said: “This shift reflects growing consumer confidence and trust in D2C brands, thereby creating inertia towards market sales.”
“The charm of the market is slowly disappearing in the minds of consumers. Brands are also trying to build moats through their websites because it can be a key differentiator in a crowded segment,” Perfora’s Bawa told us Mint.
better visibility
Considered the busiest shopping season of the year, India’s festive season is crucial for manufacturers and retailers of electronics, consumer durables and apparel to launch new models, offer discounts and introduce easy payment options to attract customers. Consumers also often indulge in celebrating festivals such as Lunar New Year, Dussehra and Diwali.
Marketplaces such as Amazon, Flipkart and Meesho have been an indispensable sales channel for D2C companies to reach customers easily. However, with the boom in online shopping, users have become more comfortable shopping through brand websites, especially if they have tried the products before, said Archana Jahagirdar, founder and managing partner of early-stage venture capital firm Rukam Capital.
“Today, consumer brands have more tools at their disposal to help increase awareness. This also reduces reliance on the marketplace.
Many companies have cut back on marketing spending this year. Perfora’s Bawa said its marketing spend is down 35% from last year, giving it confidence that its site is converting customers.
The marketplace charges a commission on every sale made through its platform (ranging from 2% to 30%, depending on the category), thus reducing sellers’ income. Companies also need to spend money promoting their products to stand out in a cluttered online marketplace.
D2C company founders are now working to establish clear differentiation on their sites, often through extensive marketing efforts or discounts.
Nestasia’s Agrawal said its promotions with actress Sanya Malhotra have helped attract users to make their homes a place they don’t want to leave. Perfora is launching a “buy one, get two free” offer early in the holiday season.
Need now
This year, consumer demand for faster delivery, often within 24 hours, has prompted companies to partner with hyperlocal logistics companies to meet customer demand. Agrawal said Nestasia has signed partnerships with Shadowfax and Porter, significantly reducing delivery times.
“More than 10% of our orders are now delivered within hours. Customers are also increasingly choosing the express delivery option on our website,” Agrawal noted.
Nestasia has also expanded its offline stores to 10 this year, aiming to use them as hubs for faster delivery. Agrawal said it aims to cover 15 stores by the end of this year.
Perfora co-founder Bawa said Perfora is less concerned with delivering orders quickly but is willing to invest in effective social media marketing and consumer research.
Unicommerce data shows that e-commerce transaction volume in the first 10 days of the holiday is up 16% compared with the same period last year, while total merchandise value has also seen a similar increase. The driving factors for growth include healthy snacks and food categories, which increased by more than 65% year-on-year during the same period, kitchenware orders increased by 34%, and clothing orders increased by more than 22%.
Overall, e-commerce companies expect sales to increase by 35% during this year’s holiday season, driven by rapid commerce and increased consumer spending capabilities, according to a report by recruitment and recruiting services platform TeamLease.