Startup founders unpack the D2C movement at TechSparks 2021

The clean beauty and go green movement are changing the face of the Indian skincare industry, with consumers now exploring digital channels to find the right products. Over the years, several startups have joined the direct-to-consumer space, bringing products to customers’ doorsteps. It is no wonder then that investors have made a beeline for these new-age D2C platforms. 

At TechSparks 2021, YourStory’s flagship event, four top D2C startup founders – Rahul Yadav of Minimalist, Gaurav Mangla of Pickrr, Saroja Yeramilli of Melorra, Darpan Sanghvi of Good Glamm Group –along with Sakshi Chopra, Managing Director, Sequoia India discussed the way forward in the segment.

Selling gold online

Currently, all our shopping from groceries to clothes, beauty and grooming products to sanitary needs have shifted from our local stores to online but buying gold jewellery is still dominated by traditional jewellers. However, Saroja changed this through her startup Melorra that sells gold jewellery online. 

“We are in the fine jewellery space, and it is the second largest industry in India after food and grocery and it is already valued at $65 billion and expected to get to $100 billion soon. While it’s true that the local jewellers continue to dominate the industry but the government regulations including the hallmarking movement have organised the industry a lot,” Saroja said. 

“In small towns, especially, the access to hallmarked gold jewellery with local jewellers is not there. They don’t have access to trendy designs which the young India wants. They don’t have access to affordable price points so in smaller towns, there is tremendous aspiration but there is no access to good brands and hence internet has proved to be a boon both for consumers and retail companies to directly reach consumers wherever they may be in the most capital efficient manner,” she added.

D2C from Tier II city

Another D2C startup that is creating ripples in the skincare industry is Minimalist co-founded by Rahul. Started from tier II city of Jaipur, the platform has garnered a loyal fan following. At TechSparks 2021, Rahul discussed whether launching from a tier II city is any different from starting a business from a metropolitan city. 

“While tier II cities have seen fewer startups emerging from them so far, the reality is fast changing. Now people are moving back to their native cities from metropolitan cities because of a better lifestyle, living conditions and environment so that has helped. Apart from that, one’s location doesn’t have much impact on their startup. In fact, a lot of things are easier in tier II cities. For us, we have our own manufacturing unit, so we don’t have to outsource to third-parties. Having a factor is much easier than having a factory in Bangalore or Delhi,” said Rahul adding that the R&D team at Minimalist is geographically diverse as there are people from Ghaziabad, Punjab, Amravati etc.

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New customer acquisition – Key metric 

Good Glamm Group is another D2C company that’s ramping up its business with multiple acquisitions. With Baby Chakra, PopXo and now ScoopWhoop under its belt, Darpan Sanghvi believes that scaling in India with one category one brand is limited. 

“The way to scale to Rs 3000 – Rs. 4000 crore revenue is to have brands across adjacent categories and all of them doing Rs 500-700 crores in revenue. We could do it effectively because we thought that content-to-commerce was something that we figured out when we acquired PopXo last year. One of the key metrics to gauge our growth is our online new customer acquisition,” Darpan said. 

According to Darpan, before acquiring PopXo, MyGlamm, a brand under the group, was looking at 30,000 new customer acquisitions per month. However, post the deal, the company saw 60,000 new customer acquisitions per month and in a year. MyGlamm is reportedly at 3,50,000 new customers a month.

None of the D2C startups would be possible without a robust logistics company connecting consumers to the sellers.

Gaurav spoke about enabling delivery of products between brands and customers. He said, “While D2C brands were discovered by consumers first on Amazon after which they moved to open their own platform. But they wanted to give their customers similar experience in delivery as Amazon which is where we positioned ourselves. We brought in the same delivery in 2-4 , 4-6 days that Amazon has and managed the post-purchase experience."

"As brands are scaling up, there is also an increase in customer base and hence increase in delivery of products. We saw Bella Vita scale up with us from 300-400 orders to doing 3,000-4,000 orders now," Gaurav added. Bella Vita is an online skincare platform.

Funding in D2C on the rise

Indian D2C startups raised $783.7 million across 66 funding deals between January and August 2021, with fashion emerging as the most attractive category for investors. Around 65 fashion brands raised up to $1.1 billion this year.

Sakshi reflected on funding in D2C startups and said, “D2C brands leverage data and insights better than their traditional peers and these insights help them in doing better in product innovation. They create better content and they are able to provide better services to their customers and are far more agile to the changing consumer needs. Apart from this, we look at the unique insight a founder has about his or her business and the team they are operating with. So in the early days when we evaluate the startups, we try to understand the things they are doing differently.”

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For a line-up of all the action-packed sessions at YourStory's flagship startup-tech conference, check out TechSparks 2021 website.