How are D2C brands in India defining the future of retail?

D2C (Direct-to-Consumer) trends have profoundly reshaped the retail industry, upending conventional sales avenues and presenting fresh avenues for brands to connect directly with consumers. This shift, driven by competitive pricing, seamless delivery choices, and enhanced customer experiences, enables brands to sidestep traditional retail intermediaries and directly vend their goods to online shoppers. This fosters swift communication and facilitates direct engagement with the clientele.

India has the third-largest digital shopping base in the world, with more than 190 million internet users. More than 600 direct-to-consumer (D2C) brands already exist in the country. Bain & Company predict that by 2027, India’s retail market will be worth between $150 and $170 billion. And a sizeable portion of that expansion is attributable to direct-to-consumer (D2C) companies. The D2C fashion and beauty industry is the most lucrative.

Beauty & Personal Care Companies Growing:

In recent years, the value of the cosmetics market worldwide has increased and is expected to continue growing and is poised to change the future of retail. The market was projected to be about 131 billion U.S. dollars by 2026. The cosmetics business has weathered tough times, and looks like it will be even more robust. The tremendous technological acceleration of the industry in 2023 will make it unlike any other year before it. The trend in this sector is toward more openness and diversity.

Some of the D2C space for Cosmetics & Beauty Business:

One of India’s leading E-commerce platforms for Beauty Products began as a beauty marketplace and has expanded to become a significant player in the Indian e-commerce sector. The online store has expanded beyond cosmetics, entering the fashion industry, introducing private label products across various lifestyle categories, and preparing to enter international markets.

The leading e-commerce platform in the Indian beauty industry has consistently impressed observers with its rapid expansion. The fashion entity of this company struggles to maintain its current market share in the face of rising competition from well-funded rivals.

Even now, it is one of the few successful startups. However, its parent company reported a 71% decline in net profit to 8.5 crore in the December quarter of 2022-23 compared to the same period a year earlier. Its margins were eaten up by the cost of renting shops, offices, and warehouses. Positively, profits increased by 63% from the previous quarter, which ended in September.

One of India’s biggest Department store chain’s fourth quarter consolidated revenue was Rs 923.90 crore, a growth of 29% from the same period in the previous fiscal year. In addition to opening 12 new beauty locations and renovating five others, it has secured exclusive distribution for 15 cosmetics lines. This company also announced additional investment in its Global Beauty Brands subsidiary of up to Rs. 25 Crores in one or more tranches.

TATA Group’s E-commerce platform, founded in 2016, has recently raised Rs 1,600 crore. The platform’s strategic focus is on expanding its customer reach within tier 2 and 3 cities, where there has been a notable increase in demand. Simultaneously, the platform anticipates sustained growth within tier 1 and metro cities, consequently leading to a significant uptick in hiring activities.

India’s second-highest-valued startup in cosmetics experienced a notable growth of 71.6% in its revenue from operations, which increased from Rs 128.15 crore in FY21 to Rs 219.88 crore. These figures are based on the company’s consolidated financial statements submitted to the Registrar of Companies. Aside from its online sales platform, it manages a network of over ten offline stores across India, including prominent cities such as Mumbai, Pune, and Bangalore. This expansion trajectory consequently results in the recruitment of an increased workforce.

An omnichannel beauty retailer launched in 2023 could become a formidable rival to all the above-mentioned E-commerce spaces. It opened a second store in India after the success of its first location on Jio World Drive in April by moving into the Infinity Mall in Malad. Now its store model could be expanded to as many as one hundred Indian cities with local variations. This expansion plan is expected to result in a substantial augmentation of the workforce.

New Companies are entering this space

India’s personal care and cosmetics industry shows annual growth of 3.86 percent and year-over-year volume growth of 143 percent defining the future of retail sector in India. The market is predicted to top $100 billion globally in 2023. Countless new cosmetics companies have appeared, and manufacturers now employ a dizzying array of novel ingredients in their concoctions. Various online platforms offer a wide range of beauty products directly to consumers. However, these products are predominantly sold in retail stores.

Impact on the workforce with a rising retail market

The cosmetics and beauty retail industry is experiencing a substantial 35-50% increase in demand for beauty advisers, sales personnel, and beauticians. This growth surge transforms consumer preferences and creates a cascade of job opportunities across various sectors.

Retail stores are at the forefront, offering roles ranging from sales associates to beauty advisers, catering to personalised shopping experiences. Distribution centres are also booming, demanding logistics, inventory management, and supply chain optimisation experts to keep products flowing smoothly.

The digital landscape is evolving, too, with e-commerce operations requiring professionals skilled in customer service, digital marketing, and online sales management. Blue-collar workers are essential, handling tasks like stocking shelves, arranging displays, and maintaining store operations. Warehouse and delivery services are adjusting to increased demand, opening up roles in warehouse management and efficient last-mile delivery. As the industry expands, these diverse job opportunities are shaping the future of the job market, offering a range of careers for various skill sets.

Author

TeamLease Services Limited

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