MMA Global India and Publicis Commerce recently launched their insightful report ‘D2C Advantage – Guide to Maximise ROI Of E-Commerce Investments’ with leaders from various corporations in attendance, in addition to the Publicis Commerce and MMA Global India leadership team.
This toolkit is the first of its kind for the C-suite and Brand Leaders on making D2C ventures a success by investing in sound strategies and having a clear value proposition, taking into considerations and capabilities required for profitability.
The toolkit consisted of a joint survey conducted by Publicis Groupe India and MMA Global India which reveals that >80% of D2C ventures are yet to achieve profitability, citing high customer acquisition costs, operational complexities, and unclear returns on investment as primary obstacles. The top three key challenges in scaling D2C businesses in India are namely high customer acquisition cost (70 percent respondents), operational complexities (20 percent of respondents) and unclear ROI (10 percent of respondents.) Moreover, while many traditional businesses have ventured into D2C, standalone D2C revenue remains modest, comprising less than five percent of overall ecommerce revenue for 50 percent of respondents.
However, businesses that have seen success with D2C have done it primarily through clarity of proposition, developing consumer insights through data enrichment and utilisation and analytics and reporting, augmenting the consumer share of mind through unique and compelling shopping experiences, the right media and engagement and innovating on product UI/UX. While the path to profitability of D2C business is quite challenging when viewed independently, the true value of D2C investment is unlocked when insights from D2C businesses are connected to the overall e-commerce business. In a conservative estimate, when done right, D2C businesses have potential to deliver 8%+ operating margin consistently.
D2C channels provide the best way to capture first-party consumer data as seen in the survey findings. When done right, first-party data has potential to deliver ~4%+ lift in overall D2C revenue. Therefore, D2C brands must have a structured roadmap to collect, manage and use first party data in scaling their D2C business.
Anupriya Acharya, South Asia CEO, Publicis Groupe said, “D2C enables real, direct, and very personal connections with consumers, driving brand loyalty and long-term relationships. The overall ecommerce landscape is evolving at rapid speed and within that, D2C channels are a goldmine opportunity for companies to better manage the way they sell to consumers, comprehend consumer interests and preferences through valuable data and insights, bring in strong differentiators and innovation and personalised commerce experiences. Our toolkit D2C Advantage X – Guide to Maximise ROI Of E-Commerce comes at the apt time when D2C is at an inflection point in India and more companies are looking for direction and differentiated strategies when it comes to their leveraging their D2C commerce channels. The insights in our survey will help more companies make the most of the D2C opportunity, building market share and enduring relationships with consumers.”
Moneka Khurana, country head and board member, MMA Global India said, “MMA Global India through its e-Commerce Council aims to build an overall understanding of the eCommerce play in which D2C is integral to omnichannel strategy. Building a strong D2C platform feeds into enabling insights/learnings for decision-making for the larger eCommerce market. We hope this playbook will redefine the significance of D2C in eCommerce landscape more than ever before. As we prepare for a cookie-less journey this year, investing into D2C is the most potent way to build first party data for effective marketing. D2C is here for the long haul and will propel hyper growth, brand building, and opportunities to drive content-driven commerce.”
Lalatendu Das, CEO, Performics India which is a key growth driver of Publicis Commerce India, “A significant part of the e-commerce funding in India goes to D2C businesses, overtaking marketplaces as the most funded ecommerce subsector in 2023. In fact, even the brick-and-mortar businesses are now launching D2C channels as part of their omni-channel strategy. However, D2C is an area which is still underleveraged because >80% of D2C ventures as per our survey are yet to achieve profitability. Our toolkit D2C Advantage X – Guide to Maximise ROI Of E-Commerce Investments has the best of knowledge and actionable strategies on D2C. It gives a clear understanding on why some companies can implement successful D2C businesses while others are on a slower trajectory. D2C, which is a faster way to go to the market needs to be part of a company’s longer-term play, strategy, and vision and to be successful, companies must implement the sort of thinking, investment, agility in execution that is required for an omni-channel world.”