Icici Securities Report: The era of big brands is behind us; D2C brands have some advantages for big companies – ICICI Securities report | Techno Glob


The era of big brands is behind us and large companies will have to take a more disruptive approach with a portfolio of many mid-tier brands and some emerging trends, says an ICICI Security report.

Using D2C or direct-to-consumer brands not only limits the speed of implementation, but is better for large companies in select areas. “With some underlying shifts in the environment, large companies are gaining a ‘level playing field’. Limited competitive advantage. Better consumer-level data and targeted marketing capabilities position consumer companies at an advantage over larger players,” the report said.

D2C brands refer to businesses that derive the majority of their revenue from direct-to-consumer online channels or start with online-first distribution before going omni-channel.

“D2C players will gradually impact large FMCG companies with their innovative products and variety of flavors. People are seeing D2C brands more often when they spend online and recall is increasing. Now that consumers are looking at options from their regular brands, D2C brands are seeing increased experimentation. Be it apparel, personal care or food, Soumyadeep Mukherjee, co-founder of Spicestory said. “But the challenge for D2C brands is to scale offline. At some point, All brands will need to build volumes offline to continue on the path to profitability.”

By picking up the ‘House of Brands’ game, cashing out for multiple promotions of D2C brands has become relatively easy and profitable. Mensa Brands; GlobalBees, Up Scalio, Thrasio (a US based company and a pioneer in this industry) are some of the popular companies here. ICICI is believed to have started with the intention of selling multiple D2C brands, while traditionally requiring a long operational history to demonstrate brand relevance and prove operational economics, mid-tier brand owners can now cash out. They exit early and generate good returns on their own invested capital.

“When a D2C startup enters the market and makes their products visible to the end customer, there are only two things that give them an edge over the existing big FMCG players. First, they need to have a focused marketing strategy through Facebook. Google ads and second, they need to have a strong logistics and supply chain infrastructure to reach their customers in any part of the country,” Dhianu Das. , said Cofounder, Agility Ventures.

In its earnings call last week, Hindustan Unilever said it now has 14 customized D2C platforms to provide a unique shopping experience to consumers. In fact, HUL recently expanded its Horlicks franchise, It developed a new format, Gummies, by launching two products, Nutri Gummies and Diabetes Gummies, on its D2C platforms.

“D2C is a channel like offline or e-commerce. In every channel you will find very different products and at the same time offer many of my products as well as low prices. The number of Me-too product offerings across all channels, including D2C, will always exceed differentiated products, said Anish Basu Roy, Cofounder, TagZ Foods, who believes in making innovative chips that sell D2C brand potato chips. fried okra Baked and fried, etc.



Source link