Can digital-first brands take on their larger counterparts?

D2C brands are challenging traditional brands through closer customer connections, competitive pricing, and other strategic advantages. Experts examined whether these factors can help D2C brands win the race.

Customer shopping behaviour is evolving. Previously, traditional brands dominated each category, enjoying the lion's market share. However, the rise of direct-to-consumer (D2C) brands in the last few years is redistributing the market. Consumers are now more willing to experiment with different brands across various categories.

At the fourth edition of the Marketers' Excellence Conference 2024, hosted by afaqs!, a panel discussion titled "Fighting the Invisible Competition" explored the challenges faced by D2C brands. The conversation delved into how big D2C brands can grow, and how traditional brands are preparing to compete with these new entrants in their niche markets.

The panel comprised Krishnarao Buddha, senior category head at Parle Products, Indian multinational food corporation and Rishi Kakar, head of marketing and strategy at Kokuyo Camlin, a stationery company. The session was moderated by Sreekant Khandekar, co-founder and CEO, afaqs!

Khandekar opened the panel with the rise of new entrants, discussing the change in consumer perception.

Buddha opines that two decades ago obtaining a trade mark was a relatively easy task as compared to now, reflecting new businesses and brand launches.  

“Traditional brands like Parle started with a conventional distribution model, from manufacturing to the end consumer, and this model remains robust for us. However, it's not the only option. Modern retail has emerged in recent years, offering brands exclusive access to specific markets,” he highlights. 

Kakar mentions that in the past getting a brand onto a shelf was a formidable task, but now with technology and business infrastructure, it has become easier for D2C brands. 

“Now D2C brands have a real chance of winning consumers, identifying niches, offering unique solutions and larger value propositions,” he points out. 

He also cites an example of an adult population who loves stationery of Japanese design due to its sensibility and aesthetics. A D2C brand can serve this group, and make a business from it.

Young brands engage with customers more robustly than traditional brands. If a brand fails to resolve an issue, customers escalate it on social media, potentially impacting its image.

Kakar says that traditional brands often reply late on social media, while D2C brands converse with their customers. He says, “Even their founders are quite active on social media. The high level of engagement from these young brands is raising expectations for traditional brands as well," he mentions.” 

Can D2C brands challenge traditional brands?

In the market, traditional brands have established their distribution channels and earned consumer trust. Conversely, D2C brands must put in significant effort to gain market share. Usually, D2C brands focus on specific niches, catering to particular markets. 

According to Statista, India's market houses over 600 D2C brands offering a wide range of products from grocery and personal care products to consumer electronics. 

The question remains, Can the D2C brands grow to the size of traditional brands?

Kakar answers, “D2C brands are fine-tuning their business models. Currently, their ambition is not to remain small but to grow. In pursuit of it, they will either move into different product categories or target new customers.”

Buddha says that categories such as banking, travel and insurance have grown significantly through online mode. Transitioning to the offline market as compared to online requires adapting to different demands and investments. “Brands are learning and improving in that area,” he says.

You can watch the pannel here

We would like to thank our Marketers’ Excellence Awards 2024 sponsors, MiQ, JioAds, and RedFM 93.5.