(Last Updated On: April 19, 2023)
Welcome to eCommerce 3.0 – the third stage where eCommerce sees a whole new level of sophistication. We first had offline goods, that were simply sold online. Then we had marketplaces that offered to bring your products to a wider audience. The third stage is marked by:
- Refined digital infrastructure and penetration
- A whole host of payment and platform solutions that power D2C channels
- Building an online identity
The #D2Ctech conference hosted by Instamojo wanted to celebrate the advent of eCommerce 3.0. The event was marked with intense discussions around the tech, data and design that is powering the next million D2C brands in India.
Here is a highlight reel from the panel discussion where we were joined by Supriya Donthi, (Founder – Leafy Affair), Arjun Vaidya (Co-founder- V3 Ventures, ex-founder of Dr. Vaidya’s), Rishi Vasudev (Co-founder – Goat Brand Labs) and Sampad Swain (CEO & Founder – Instamojo)
Want to know more about what we learnt from these industry experts? Here are our top 8 favourite takeaways from this discussion.
“D2C brands have the advantage of achieving ‘mind to market at a much higher speed”
Legacy brands are slow in moving from what’s trending to really launching, whereas D2C new-age digital brands study and predict trends from a year in advance to be able to capitalise on them. This is why there has been this high penetration of D2C brands in this industry.
“The market penetration for D2C by 2030 is going to be 7 or 8x”. Rishi Vasudev, Co-founder, Goat brands labs.
So even if you have not cracked it yet, don’t lose heart. There’s enough and more opportunity and headroom available for everyone to grow and build an exciting business by 2030
“D2C brands need the right technology stack to thrive”
New-age digital brands start with a high-end technology stack and then end up getting overwhelmed by all the plugins and integrations performance marketing etc. In the end, it results in slowing down their app and a worsened CX.
Technology should be able to help you optimise what little manpower and resources you have.
Start adopting technology stacks when you have the resources to do so. Till then, research and find out tech stacks that are giving you what you need for free.
For example: Start with what’s offered for free – social media, then transition to growth marketing tools and aggregator platforms like Instamojo, where you can create your own free online store.
Access to technology is what sets D2C brands apart. They are structurally built to incorporate and leverage technology, unlike legacy brands that need a mindset shift.
“In a world of abundance, reducing the time you take to execute a data-based optimal decision is critical” Sampad Swain, Founder – Instamojo.
eCommerce 3.0 belongs to those who can adopt speed and agility – the fundamental trait of a D2C brand.
“D2C brands can achieve hyper-scale once they achieve product-market fit”
The biggest advantage that digital brands have is, once they break even and reach the stage where you are making money on your orders even if you do the same things over and over again, you will be able to scale predictably.
This is what a product market fit essentially looks like.
Getting the playbook right takes time. But once D2C brands have understood what pattern of behaviour works for them, it’s easier for them to start scaling up by just repeating what they are already doing but with larger sample sizes.
“A positive contribution margin is essential in wooing investors”
All D2C brand owners want to become profitable. But chasing growth blindly can be fatal. With the correct analytic tools, you should be able to constantly monitor your unit economics. Once your fundamental metrics are in place, and your contribution margin is positive, you can start scaling.
For D2C brands that are growing, you need to know your revenue which is left over AFTER you have eliminated logistic costs, performance marketing costs, marketplace or eCommerce platform costs and other overhead costs. This is your contribution margin.
This leftover part of your revenue is your contribution margin. The bigger the margin, the better your business health. An essential factor of consideration for investors today.
Businesses built on a high-burn model are really dependent on a flow of capital. So unless you’re market value proposition is not strong and robust, your customers are buying from you because it’s too good to true (deep discounting) but that’s not sustainable at all.
Setting the price correctly is crucial for your eCommerce D2C brand to sustainably thrive.
The basic tech trinity that D2C brands need
Pre-checkout, checkout, post-checkout – you need to find a platform that can do ALL of this together.
10 years ago, you would have had 30 tabs open just to achieve this one action. Today – it’s all one-click, one-stop solutions.
What are investors of eCommerce 3.0 looking for in a brand?
Arjun Vaidya broke down what investors are looking for, especially during the current funding winter that D2C brands are experiencing.
- 50% – Qualities of the founder
- 30% – Business growth velocity, revenue gross margin, contribution margin, profitability, long-term lifetime value of customers, the team
- 20% – Market size, the ability for the business to scale even in a super nice
Mentorship is key for early-stage D2C brand owners
D2C new-age founders need direction. They may have been able to achieve mind-to-market but then what? How do they get the playbook right?
Solopreneurs do face the challenge of getting the team right – especially when it’s an intricate handmade business where the team’s creativity and operations should be in sync.
“All of these people form a puzzle. And as you grow bigger, you need more and more puzzle pieces to fit it. That’s when you start looking for mentors, investors, accelerators, incubators etc. Because D2C brand building is also ” Supriya Donthi, Founder, Leafy Affair
AI for eCommerce D2C brands
“Huge productivity booster” Newer tools will mushroom, some smart founders will adapt and then the copycats will come. “The world will belong to those who will know the right prompts”
Personalised messages – abandoned cards, celebratory messages, announcements, product launches
Using AI for content, art, audio, video
“We all have to pull up our socks as brand owners and start understanding the powerful impact of AI. The ship is here, either catch it or get left behind”
Be a part of eCommerce 3.0 with Instamojo
This is the BEST time for you to start a D2C business. With the right technological tools and an agile entrepreneurial mindset, there is no way to go but up. Build a business the right way.
Access a host of D2C eCommerce solutions like an online store, payment gateway and landing page builder at a one-stop destination. Start for free on Instamojo.
