As quick commerce gains ground, emerging direct-to-consumer (D2C) brands are betting big on digital channels to drive growth.
According to Aman Gupta, co-founder of wearables brand BoAt, new-age brands in India have been expanding at a much faster pace than expected, driven by digital channels like quick-commerce.
“Investors doubted the potential of D2C brands when we started, but today there are multiple brands in the startup market that are growing on the shoulders of these digital channels,” Gupta said while addressing a session at Razorpay’s D2C and Retail Summit recently.
He pointed out several challenges that D2C brands such as BoAt had to face initially.
“We had to deal with a lot of cash when we started as people would prefer ‘cash on delivery’ services to avoid the complexities of digital payments,” he said.
Gupta said digital commerce has evolved on multiple fronts and payment gateways have become faster, simpler, and user-friendly, yet secured with time.
Quick commerce is now BoAt’s third largest channel for sales.
Companies like fintech major Razorpay — in the realm of online payments — have been working with D2C brands.
D2C brands face a host of unsolved technological challenges while trying to implement quicker deliveries, be it via quick commerce platforms or their own online distribution channels, says Razorpay co-founder Shashank Kumar.
“There are a lot of opportunities in quick commerce where the experience can be improved, be it payments, logistics, loyalty programmes, or otherwise,” Kumar told Business Standard.
Elucidating on it, he said Razorpay recently partnered with food delivery major Zomato to build a payments solution that addresses a ‘spare change’ problem for consumers.
Using the solution, customers can pay delivery partners in cash and ask for the balance amount to be instantly added to their Zomato Money account.
“Helping D2C brands connect with quick commerce platforms is not easy – it’s not a plug-and-play solution.
"There is a lot of work that needs to be done there.
"On the logistics side, a lot of brands are looking to open their own dark stores or partner with dark store operators to offer quick deliveries, which is also an unaddressed challenge,” Kumar said.
One such platform addressing these challenges is full-stack fulfilment startup Zippee.
Founded in 2021, the company aims to empower D2C brands with seamless, same-day deliveries by leveraging its network of 150 dark stores and last-mile delivery fleet.
The platform claims its plug-and-play model can “effortlessly integrate” its online stores with any e-commerce fulfilment platform in just a few clicks.
According to data from market intelligence platform Tracxn, Zippee has raised a total of $3.5 million to date across four rounds from the likes of Haldiram’s, Piper Serica VC, and South Asia Technology Partners.
It has also picked up investments from prominent entrepreneurs like Peyush Bansal, Ashneer Grover, and Kunal Shah, among others.
The company currently operates in 10 cities and claims to have served as many as 120 D2C brands, including Lenskart, Clinikally, Mondelez, Masterchow, Supertails, and more.
“We democratise Amazon-grade logistics for brands that want to sell more through their own online stores, have greater control over customer data, & offer solid post-purchase experiences to customers through same-day deliveries,” said Madhav Kasturia, founder and CEO, Zippee.
Quick commerce firms — including Zomato-owned Blinkit, Swiggy Instamart and Zepto — are now rapidly expanding their dark store footprints, or category expansion to include bigger-ticket items like electronics, fashion, beauty, and eyewear.
The growth of D2C brands on these quick commerce channels has overtaken traditional e-commerce, and the medium is proving to be more profitable.
Flushed with funds, the sector does not show any signs of slowing down anytime soon.
How D2C brands capitalise on this opportunity, however, remains to be seen.
