DIRECT-TO-CONSUMER (D2C) brands such as Mama Earth, Wow Skin Science, Lenskart and boAt, among others, may have managed to ride the pandemic-induced digital boom and clocked double-digit revenue growth over the last few years. But that isn't the overall D2C story in India. The market is slowing, according to conversations with multiple industry experts and investment bankers about the state of the sector.
The slide in the D2C market growth has coincided with a slowdown in the domestic e-commerce industry and a funding winter in the overall internet economy in the last year. Barring a few D2C brands, most are struggling to raise funds as investors turn cautious, the experts said.
The $60-billion e-commerce market in India slowed to levels of about 22% in terms of growth in FY23 from 36% reported in FY22, according to consultancy Redseer.
While the D2C segment is around 28% of the domestic e-commerce market, according to Redseer, growth rates have halved to about 25-30% from 50-70% seen during the pandemic period of March 2020-March 2022, some experts say.
And the pace of growth could slow further if the funding winter and e-commerce slowdown persist into the future (FY24).
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