First came Amazon and Flipkart, sprawling e-commerce entities with hundreds of thousands of sellers fighting for space alongside these platforms’ own private label brands.
Then came smaller direct-to-customer (D2C) shopping sites, set up by brands tired of being subjected to the whims and fancies of e-commerce majors. Thanks to the likes of full-stack e-commerce enabler Shopify Shopify The Ken Shopify shops for e-commerce’s business in India Read more , these stores mushroomed rapidly.
The final step in this evolution of India’s e-commerce segment seems to be a hybrid of its predecessors—platforms that give sellers and buyers an intimate, consumer-focused experience, while also offering variety akin to larger marketplaces. In short, a D2C online marketplace. Hundreds of startups—from early-stage ones like health snacks brand True Elements to unicorns like beauty brand Mamaearth—have made a beeline to these marketplaces, which are, more often than not, niche and category-focused.
Like FirstCry, an online marketplace for new mom and baby products. The company began in 2010 as an offline retail chain with 380 stores across the country at its peak. Currently, its online store claims to have around 5,000 brands and 7.5 million registered users. Or Little Black Book (LBB), which started off as a lifestyle recommendation blog in 2012 and pivoted into an e-commerce platform in 2015. Currently, it has over 4,000 brands. “Such micro-channels build an experience that’s more suited to your category of products, unlike a monolithic buying experience,” says Bharat Srinivasamurthy, co-founder of BrandRat, a D2C discovery platform.
Brands aren’t restricting themselves to one or two platforms, either. India’s D2C growth over the last five years came from a common playbook—find a product-market fit on marketplaces, drive traffic to one’s own websites, and then go offline. Now, however, the underlying philosophy seems to be the more channels, the merrier, no matter the size of the brand.
For instance, True Elements and personal care brand mCaffeine both sell on over 80 platforms. For the year ending March 2022, the two companies boast a revenue run rate of Rs 80 crore ($10 million) and Rs 350 crore ($46 million), respectively. “Whenever we’ve sold on long-tail channels, we’ve seen great traction. We ensure we’re present everywhere so that when any of these niche channels become huge, we’re there as an early adopter,” says mCaffeine’s co-founder and chief executive Tarun Sharma.
It’s an additional source of revenue for brands, particularly if the market has hit saturation on horizontal marketplaces. A health food brand may find more takers on e-pharmacy platforms such as Tata-owned 1MG, which anyway cater to customers looking for healthcare, than on Flipkart.
