Premium espresso, tea, specialty meals and wonder; 2021 marked legacy manufacturers’ entry into D2C
E-commerce for most of these old businesses has started contributing between 8 and 15% (just 3% to 5% in the pre-pandemic period) of their total revenues. While D2C is still in its infancy, they all have aggressive growth goals. According to Kannan Sitaram, venture partner Fireside Ventures, D2C is an opportunity for legacy companies to segment consumers. “How do I meet the requirements of women between 18 and 25 years of age who are starting their careers for the first time? Can I segment more finely and create brands that, while not sold in every retail store, are inherently profitable? These are some of the factors that play a role in your D2C strategy. “
“D2C enables us to address consumers without distributing resources across the entire room. It enables us to bypass execution issues and target the consumer, ”said Sunil D’Souza, MD & CEO, Tata Consumer Products, in a previous interview with Fortune India.
So will D2C grow at the expense of legacy companies’ traditional distribution network? It won’t, but it is certainly poised for decent growth as a parallel platform.