THE COMING

OF AGE OF D2C
IN INDIA

June, 2024 Confidential and proprietary © 1Lattice

Table of
contents
1 Executive Summary

2 India Retail Market Overview

2.1 Retail Contribution to GDP
2.2 India Retail Market Deep-Dive
2.3 Sales Channel Comparison

3 India D2C Market Overview

3.1 India D2C Market Deep-Dive
3.2 D2C Impact on Retail & Economy
3.3 Inception of D2C as a Sales Channel

4 India D2C Investment Landscape

4.1 India D2C Market Investment Scenario
4.2 D2C Investments Comparison
4.3 D2C Growth Drivers & Challenges

5 India D2C Segment Specific Deep-Dives

5.1 Electronics
5.2 Beauty & Personal Care
5.3 Fashion
5.4 Grocery

6 Benchmarking Sub-Segments
Across the D2C Landscape

7 Looking Back
7.1 Key Success Factors for D2C Brands
7.2 Key Enablers for D2C Brands

8 Looking Ahead
8.1 Predicting the Way Ahead for D2C Brands
Foreword

Ashish Dhir Abhishek Maiti

Senior Director Director

India's retail market comprises ~50% of consumer spending, highlighting the

remarkable potential for further expansion, particularly through increased online
penetration. With constantly evolving consumer behavior & retail expansion, D2C
is developing as an ecosystem reshaping the e-commerce landscape. D2C
brands are mobilizing technology along with a deep understanding of consumer
needs & preferences to establish direct connections with their customer base.

This report conducts an analysis of the evolutionary journey of D2C in India thus
far, examining the emerging tech-based approaches, key drivers, evolving
trends, and the substantial benefits to all stakeholders. Additionally, it highlights
the challenges & bottlenecks in greater omnichannel integration in the coming
years. Furthermore, the report underlines the role of enablers within the D2C
ecosystem, emphasizing how they streamline the process of establishing and
enhancing the competitiveness of D2C brands in the market.

With further expansion of the online market & integration of offline aspects into
the D2C ecosystem, there will be large numbers of brands entering the market in
the coming years. The report shed light on dynamic forces shaping the D2C
landscape offering valuable insights for businesses seeking to thrive in this new
era of commerce. It also aims to provide various industry stakeholders including
business leaders with an overall perspective on the market. The report reflects
our perspectives as of March 2024. We, at 1Lattice, look forward to continuing the
discussion with our friends across sectors and exchanging notes.
Foreword

Mandar Dandekar Anshul Bansal Harsh Khara

Partner Principal Vice President

India’s retail market is a core element of its overall GDP. As India continues to
grow, so will its overall retail market. However, this growth might differ from the
past with the emergence of new distribution channels and their respective
ecosystems. India’s per capita income is also at an inflection point that will
lead to an increase in discretionary spending going forward. Thus we believe
that mid-term growth is bound to accelerate vs the past. We also foresee a
shift in the overall channel mix, with marketplace + brand.com channels
poised to gain at the expense of offline. Coupled with accelerating growth and
channel share gains, we believe that the next 3-5 years are ripe for digital first
brands to potentially breakthrough and establish themselves. We also believe
that this opportunity isn’t limited to any particular category but far more
homogenous.

Through this report we’ve endeavoured to provide an overview of the Indian

Retail and D2C markets with segment specific deep-dives. Our objective was
to layout the massive opportunity for digital first brands and highlight key
success stories while providing a potential framework for segments covered.
We spoke to several players from the ecosystem (entrepreneurs,
marketplaces, investors, employees, consumers etc) and have embedded our
key learnings and takeaways. We believe that this report will serve as a great
repository for anyone interested in learning more about digital consumer
brands and the coming of age of D2C.

If you are a current entrepreneur, budding entrepreneur or an investor

focusing on D2C, we would love to chat and exchange notes.
Executive summary
India Retail & D2C Market Overview
• In FY23, Indian GDP was estimated to be ~US$
3.4T, out of which retail contributed ~30%
• Indian retail market size is expected to reach
~US$ 1.4T in FY27, growing at a CAGR of ~10%
from FY23-27
• Food & grocery (65%), appliances &
consumer durables (9%), & apparel &
footwear (8%) are the three biggest
categories across the Indian retail market
• The overall India D2C market was estimated
to be ~US$ 16.9B in FY23, expected to grow at
a CAGR of ~38% & reach ~US$ 61.3B by FY27
- Grocery (39%), fashion (27%) & beauty &
personal care (13%) are the three biggest
categories in the India D2C market
- Marketplace (64%) continued to dominate
the overall sales channel mix followed by
brand.com (21%) and offline (15%)
• The increase in D2C brands is fostering India’s
economy, retail market, entrepreneurial
ecosystem, driving technological
advancements & enhancing customer
satisfaction
- D2C shipments are expected to increase
from ~0.6B in FY23 to ~2.3B in FY27
- D2C brands also seem to be ahead of the
curve in AI & analytics adoption; ~65%
brands adopted AI & analytics in CY23
Note(s): 1Orignal equipment manufacturer
Source(s): 1Lattice & Sorin analysis
India D2C Investment Scenario
• India’s D2C industry witnessed a total
investment of ~US$ 4.1B from CY20-23 across
~730 transactions
- The investments peaked in CY22, with total
investments around ~US$ 1.6B across ~240
transactions
- Post-COVID (CY22-23), ~US$ 2.5B has
been invested in the India D2C industry
- Beauty & personal care, & fashion have
been the key categories attracting a lion’s
share of investments in the India D2C
market
• Marketplace expansion, technology adoption,
& nuanced marketing strategies are the
biggest growth drivers for D2C market in India
• OEM1 dependency, cost of acquisition & brand
loyalty, & talent acquisition are the three
biggest challenges visible
D2C Segment Deep-Dive
• India’s D2C electronics market was estimated
to be ~US$ 1.8B in FY23 & is expected to grow
at a CAGR of ~40% from FY23-27
- Increasing demand for premium
products, increase in affordability, & rising
demand across tier 2 cities are some of
the key trends
© 1Lattice | 05
 - Achieving product-market fit &
user-driven innovation are some of the
key success factors
• India’s D2C beauty & personal care market
was estimated to be ~US$ 2.2B in FY23 & is
expected to grow at a CAGR of ~36% from
FY23-27
- Leveraging digital channels &
technology, personalization &
subscription services, & expansion of
men’s grooming are some of the key
trends
- Innovation & product development, &
creating customer resonance are some
of the key success factors
• India’s D2C fashion market was estimated
to be ~US$ 4.6B in FY23 & is expected to
grow at a CAGR of ~34% from FY23-27
- Personalization & customization,
celebrity-owned labels & growing men's
fashion are some of the key trends
- Revenue optimization & demand-driven
product assortment are some of the key
success factors
• India’s D2C grocery market was estimated
to be ~US$ 6.7B in FY23 & expected to grow
at a CAGR of ~41% from FY23-27
- Unadulterated & fresh offerings,
subscription & customization model, &
conscious snacking options are some of
the key trends
Source(s): 1Lattice & Sorin analysis
- Quality & differentiation, & optimization
of E-Commerce platform are some of
the key success factors
D2C Market Way-Ahead
• The focus & key success factors in the D2C
market evolve basis the scale of the brand
- Budding brands (revenue < US$ 6M)
should ideally focus on getting product
market fit & brand building
- Growing brands (revenue US$ 6M –
12M) should ideally focus on customer
acquisition & growth
- Established brands (revenue >US$ 12M)
should ideally focus on increasing
overall efficiency & expanding
omnichannel presence
• Different tools & enablers exist to help D2C
brands optimize operations, enhance
personalization capabilities & drive
business growth through different parts of
the brand’s value chain
• Process automation, social commerce
integration, & hyper-localization are some
of the levers expected to drive D2C brand
growth in the future
© 1Lattice | 06
Agenda

India Retail Market Overview

Retail Contribution to GDP

India Retail Market Deep-Dive

Sales Channel Comparison

India D2C Market Overview

India D2C Investment Landscape

Segment Specific Deep-Dives

Benchmarking Sub-Segments Across the

D2C Landscape

Looking Back

Looking Ahead

© 1Lattice | 07
Significance of Retail in India’s GDP

Retail contributes ~30% of India’s GDP; Offline retail continues to dominate

with the lion’s share

Retail Contribution in India’s GDP

(%, FY23)

~US$ 3.39T ~US$ 2.05T ~US$ 0.95T

Brand.com, 1%
Government Marketplace,
spending, Others**, 15% 7%
10%
Communication, 2%
Education, 4%
Investments, Health, 5%
29%
Fuels*, 12%

Transport,
15% Offline, 92%

Consumer
spending,
61% Retail,
46%

GDP Consumer Spending Retail

Note(s): *Includes housing, water, electricity, gas & other fuels, **Includes spend on recreation, restaurants & hotels, & other goods & services
Source(s): Ministry of Statistics and Programme Implementation (MoSPI), Industry reports, 1Lattice & Sorin analysis
© 1Lattice | 08
India Retail Market Deep-Dive: Sales Channel Comparison

Benchmarking offline retail & online marketplaces viz-a-viz Brand.com

Offline Marketplace Brand.com

Definition (Traditional brick-and-mortar (Digital platforms that connect (Digital-first brands, selling
stores, consumers physically buyers & sellers, facilitating products directly to consumers,
visit for purchases) transactions between them) bypassing intermediaries)

Customer • In-person shopping • Vast array of options, • Direct interaction

experience experience, with the but less direct allowing for a
ability to touch & feel interaction with personalized &
products individual brands controlled customer
experience

Control over • Limited control as • Brands share space • Full control over
branding products are with competitors, brand image &
displayed within the potentially impacting opportunity to drive
store's context individual brand customer loyalty
visibility

Supply chain • Inventory • Dependence on the • Higher supply chain

logistics management is marketplace's control, but full-scale
crucial & distribution logistics, however, benefits take time
is typically benefit of economies
centralized of scale

Market • Localized presence • Global reach with • Benefit of targeting

reach required coupled with access to a specific
distributor & Stockist diversified customer demographics, but
relationships base with smaller reach
initially

Incurred • High overhead cost • Minimal overhead • While

expenses as rent, staff, and
physical
infrastructure incur
significant expenses
cost, however, no-commissions &
significant lesser overhead costs,
commissions paid significant
out to marketplaces performance
marketing & branding
expenses required

Outlook • Offline retail expected • Marketplace • Brand.com brands

to remain an penetration expected expected to emerge
important touchpoint to increase due to a on the back of
for brands plethora of choices & innovative marketing
customers’ strategies
convenience

Source(s): Industry reports, 1Lattice & Sorin analysis

© 1Lattice | 09
India Retail Market Deep-Dive

India retail market size expected to be ~US$ 1.4T in FY27; growth expected to accelerate
to ~10% from FY23 to FY27
India Retail Market
(US$ B, FY23-27P)

CAGR 1,396
~10%
CAGR
~7%
953
763

FY20 FY23 FY27P*

Share of Brand.com expected to grow from ~1% in FY23 to ~2% in FY27

India Retail Market Sales Channel Mix
(%, FY23-27P)

953 1396
1% 2%
7% 9%

Brand.com
Marketplace
92% 89% Offline

FY23 FY27P*

Retail market expected to grow due to increase in consumer spending, however,

category split expected to remain same
India Retail Market Basis Category
(%, FY23-27P)

FY23 65% 9% 8% 7% 3% 3% 5%

FY27P* 65% 9% 8% 7% 3% 3% 5%

Food & grocery Appliances & consumer durable Apparel & footwear

Gems & jewellery Furniture & furnishing BPC Others**

20%
60% 80%

Notes(s): *Projected, **Pharmacy & other categories

Sources(s): Industry reports, 1Lattice & Sorin analysis
© 1Lattice | 10
Agenda

India Retail Market Overview

India D2C Market Overview

India D2C Market Deep-Dive

D2C Impact on Retail & Economy

Inception of D2C as a Sales Channel

India D2C Investment Landscape

Segment Specific Deep-Dives

Benchmarking Sub-Segments Across the

D2C Landscape

Looking Back

Looking Ahead

© 1Lattice | 11
India D2C Market Deep-Dive [1/2]

India D2C market expected to Uniform growth expected across

grow at a CAGR of ~38% & reach all three channels till FY27
~US$ 60B in FY27

India D2C Market Size Category Mix India D2C Market Sales Channel Mix
(US$ B, FY23-27P) (US$ B, FY23-27P)

61.3 61.3
5%
5% 13%
11%
CAGR
12% 22%
~38%

24%

16.9 16.9 65%

6% 11% 4% 15%
13% 42%
27% 21%

39% 64%

FY23 FY27P* FY23 FY27P*

Grocery Fashion Marketplace Brand.com Offline

Beauty & personal care Electronics
Home decor, household Healthcare
supplies & garden

D2C brands typically

index on an online first
persona for building
their presence, post
brand resonance they
shift to adopt an
omni-channel strategy

Note(s): *Projected
Source(s): CII India D2C report, IAMAI DNB report, 1Lattice & Sorin analysis © 1Lattice | 12
India D2C Market Deep-Dive [2/2]

Grocery & fashion expected to add ~US$ 30B incrementally to the overall D2C market
by FY27

India D2C Market Category Mix

(US$ B, FY23-27P**)
CAGR
(FY23-27)
61.3 38%
2.1 2.8 42%
2.3
3.3 35%
5.1
6.9 40%
5.4
7.6 36%
10.3

14.9 34%

19.4

16.9
0.7 1.0
1.8
2.2 26.0 41%
4.6

6.6

FY23 Grocery Fashion BPC* Electronics Home Healthcare FY27P**

Note(s): *Beauty & personal care, **Projected

Source(s): CII India D2C report, IAMAI DNB report, 1Lattice & Sorin analysis © 1Lattice | 13
India D2C Market Deep-Dive: Impact on Retail & Economic Growth

D2C shipments projected to grow at a India retail expected to create an

CAGR of ~45%; FY27 shipments incremental ~10M jobs by FY27; D2C to
expected to be ~4x of FY23 help drive an incremental ~2.5M jobs

D2C Shipments Employment in Retail

(in B, FY23-27P*) (in M, FY23-27P*)

~US$ 4T 2.3 56.0

2.5 2.4
46.0 5.1
CAGR
~43%

0.6
~9%~9%

FY23 FY27P* FY23E** Offline FY27P*

Auxiliary Marketplace
services*** / Brand.com

Increase in D2C brands is fostering India’s entrepreneurial ecosystem, driving

technological advancements & enhancing customer satisfaction

~25% ~20% ~65% ~20%

Increase in Rise in Brands Reduction in

brands in CY23 direct brand adopting AI1 & shipping costs
vs CY22 interactions in analytics in in CY22 vs CY21
CY23 vs CY22 CY23 vs CY22

Note(s): *Projected, **Estimated, ***Support services like repairs & maintenance, logistics, return & exchange etc. 1Artificial Intelligence © 1Lattice | 14
Source(s): Industry reports, 1Lattice & Sorin analysis
Inception of D2C as a Sales Channel in India

Since CY16, 600+ D2C brands have started operations, have received >US$ 4B
investment, & 9 companies have scaled up to become unicorns

#Brands entered in
D2C space since CY16

Value of overall D2C 600+ Surge in #D2C brands

India market in FY23 ~US$ entering the market in CY23
17B ~25%
Funding attracted
D2C brands by D2C brands in
adopting AI & ~US$
CY20-CY23
analytics in CY23 ~65% 4B
vs CY22
#Investment
Reduction in transactions
shipment ~730 during
costs in CY22 CY22-23
compared to ~20%
CY21 Average
investment
~US$ amount /
D2C brands 7M transaction1
integrating
in CY23
supply chain ~75%
tech like RFID3 &
#D2C focused
IoT4 for better 9 startups entering the
control in CY23
unicorn club during
CY16-23
~60%
D2C brands using ~3
third-party ~70% years Time taken by leading
logistics in CY23 D2C brands to reach US$
12M (INR 100Cr)2 in
revenue
D2C brands using social
media for distribution in CY22

Note(s): 1is calculated by dividing the total investments in a specific year / total # transactions in a specific year, 2US$ 1 = INR 82.25,
3
Radio-frequency identification, 4Internet of Things
Source(s): Industry reports, expert interviews, Press releases, 1Lattice & Sorin analysis © 1Lattice | 15
Agenda

India Retail Market Overview

India D2C Market Overview

India D2C Investment Landscape

India D2C Market Investment Scenario

D2C Investments Comparison

D2C Growth Drivers & Challenges

Segment Specific Deep-Dives

Benchmarking Sub-Segments Across the

D2C Landscape

Looking Back

Looking Ahead

© 1Lattice | 16
India D2C Market Investment Scenario

D2C companies have seen a cumulative D2C companies have seen a total of
investment of US$ 4B from CY20-23 ~730 transactions from CY20-23

India D2C Industry Investment Landscape India D2C Industry Investment Landscape
(US$ B, CY20-23) (#transactions, CY20-23)

The average investment amount per

transaction is constantly increasing. In
CY23, it reached ~US$ 7M per transaction
from ~US$ 3M in CY20
4.1 732
127
605
0.9
3.2
240
365
605
1.6 212
153 365
1.6 153 153
3.2

CY20 CY21 CY22 CY23

1.2
1.6
0.4 #Transactions in specific years
0.4 0.4 Total #transactions since CY20

CY20 CY21 CY22 CY23

In ~US$ M CY20 CY21 CY22 CY23
Investments in specific year
Total investments since CY20 Average Invest-
ment Amount / 2.8 5.5 6.7 7.1
Transaction*

Note(s): * is calculated by dividing the total investments in a specific year / total # transactions in a specific year
Source(s): Tracxn, 1Lattice & Sorin analysis © 1Lattice | 17
D2C Investments: Pre-COVID, During COVID, & Post COVID

Pre-COVID During COVID Post-COVID

(CY18-19) (CY20-21) (CY22-23)

Total
Investment
~US$ 0.8B ~US$ 1.6B ~US$ 2.5B

Number of
Transactions

269 365 367

Average
Investment
Amount /
Transaction* ~US$ 2.8M ~US$ 4.4M ~US$ 6.8M

Key Investment
Category
Fashion, BPC, Fashion, Fashion, BPC, & Home décor
Grocer, & BPC** & Electronics & Household Supplies

Illustrative
Investment
During the
Period

Notes: *is calculated by dividing the total investments in a specific year / total # transactions in a specific year, **Beauty & Personal Care
Source(s): Tracxn, 1Lattice & Sorin analysis
© 1Lattice | 18
D2C: Growth Drivers & Challenges

Growth drivers Challenges

Growth drivers Description Challenges Description

Marketplace • Leverage universe of OEM3 • Dependance on OEM3(s)

expansion E-Commerce platforms to dependency poses a risk as
drive incremental revenue manufacturers might
opportunities for best-selling independently produce
SKUs* generic products
- Engage with category • Require high investments
managers + adapt tools for R&D to create unique
/ enablers to drive offerings & self owned
category growth manufacturing facilities
Technology • Incorporate data analytics,
adoption AI1 & ML2 for Cost of • Rising customer
acquisition & acquisition costs & shifting
- Data driven
brand loyalty brand loyalty
decision-making
- Product optimization / • Requires diversification
SKU mapping beyond digital platforms
due to evolving privacy
- Customer experience
policies
enhancement
- Marketing optimization
- Supply chain efficiencies Talent • As the industry is in the
acquisition nascent stage, D2C
Nuance • Focus on developing a companies encounter
marketing brand identity difficulties securing skilled
strategies talent
• Incorporate different
content mediums for an • Require high fund & time
efficient marketing strategy investment for internal skill
development & fostering a
• Strategic partnerships with
culture of learning
companies / influencers
• Use real-time feedback to
adapt swiftly to market Market • Continuous marketing
trends saturation & expenditure needed to
rising drive customer acquisition
Customization • Leverage customer competition / engage customers for
& personalization feedback for consistent brand loyalty
product innovation
• Challenges in adopting
• Innovate / iterate product sustainable growth
offerings basis differing strategies like community
customer personas building, superior product
• Develop brand loyalty offerings, & expense
(repeats) via personalized management
loyalty programs

Customer • Develop a multi-channel Financial • Funding slowdown / reset

experience approach for sustainability in valuations have
communicating with impacted growth outlook
customers (specifically for of several D2C brands
after sales support)
• Lack of financial
• Provide a seamless prudence has dented
discovery / search potential runway of
experience across all brand several D2C brands
properties

Note(s): *Stock Keeping Units, 1Artificial Intelligence, 2Machine Learning, 3Original Equipment Manufacturer
Source(s): Press releases, 1Lattice & Sorin analysis
© 1Lattice | 19
Agenda

India Retail Market Overview

India D2C Market Overview

India D2C Investment Landscape

Segment Specific Deep-Dives

Electronics

Beauty & Personal Care

Fashion

Grocery

Benchmarking Sub-Segments Across the

D2C Landscape

Looking Back

Looking Ahead

© 1Lattice | 20
D2C Segment Deep-Dive: Electronics

India D2C electronics market Marketplace market share expected

expected grow at ~40% CAGR from to increase from ~75% in FY23 to ~80%
FY23-27 in FY27

India D2C Electronics Market Size India D2C Electronics Market Sales Channel Mix
(US$ B, FY23-27P*) (US$ B, FY23-27P*)

6.9
6.9
12%
CAGR 8%
~40%

81%
1.8 1.8
12%
12%
76%

FY23 FY27P* FY23 FY27P*

Marketplace Brand.com Offline

Note(s): *Projected
Source(s CII India D2C report, IAMAI DNB report, 1Lattice & Sorin analysis © 1Lattice | 21
D2C Electronics Segment: Key Trends

Increasing demand for premium products

• Increasing demand for premium products in metro & Tier 1 cities
- For e.g., air fryer, which was considered a premium product,
has now become a mass-used product due to high demand
/ product innovation

Varied use cases / tech enablement

• Emergence of smart-tech devices
• Rising popularity of wearable fitness & audio devices
• Higher repurchase frequency due to addition of new features

Increase in affordability
• Electronic devices have become more affordable
• Increasing demand & value engineering have
helped sellers achieve economies of scale

Shift towards local / Indian manufacturers

• Evolving consumer preference for Indian brands over
foreign brands
• Schemes like ‘Make in India’ driving a nationalistic
narrative aiding domestic brands

ET Retail article
Rising demand in Tier 2+ markets
• Rising urbanization & awareness amongst Tier
2+ customers
• Increase in access to internet & E-Commerce
platforms

Increased health awareness

• Increase in demand for smartwatches with health /
fitness tracking features
• Customers are willing to pay premium for health-related
products

Source(s): Industry reports, Press releases, 1Lattice & Sorin analysis

© 1Lattice | 22
D2C Electronics Segment: Market Landscape

Only Accessories

Only Wearables

Audio + Accessories

Audio + Wearables

Audio + Accessories + Wearables

Others*

Note(s): *Includes electric home appliances; This is not an exhaustive list of brands
Source(s): Company websites, 1Lattice & Sorin analysis © 1Lattice | 23
D2C Electronics Segment: Key Success Factors

Parameters Description Example

Achieving • Strategic product offering: Analyze Lifelong uses channel & customer
product-market fit customer needs, differentiate product, & insights for product development
enhance continuously
• Innovative product design: Develop
portable, adaptable, &
technology-driven solutions to address
consumer demands

User-driven • Feedback integration: Implementing boAt launched ‘Smart Ring’ to tap

real-time feedback mechanisms for the need of smart wearables
innovation
iterative product improvements
• Personalized customization: Tailoring
electronic devices to deliver unique user
experiences

Strategic pricing • Dynamic pricing strategies: Adapting Noise focused on pricing in the
optimization pricing in response to market shifts competitive audio market
through data-driven insights
• Efficient supply chain management:
Optimize costs & reduce operation
expense by direct supply chain control

Amplifying brand • Lifestyle messaging: Communicating boAt markets itself as a lifestyle

narrative how electronic products enhance daily brand, enhancing life quality
life & connectivity
• Compelling visual branding: Crafting
visually engaging narratives to establish
a consistent brand identity

Agile tech • Swift feature integration: Incorporating Brands offering wearables with
integration cutting-edge technology efficiently features like SpO22 & pulse rate
through agile processes
• AI1-driven experiences: Seamlessly
integrating AI for tailored & adaptive
user interactions

Engagement led • Responsive customer support: Offering Popular D2C brands have active
social media handles engaging
communication immediate assistance for timely query
users
resolution
• Community engagement focus:
Building digital communities for user
interaction and knowledge sharing
• Strategic influencer collaborations:
Expanding brand reach through
partnerships with influencers to attract
customers

Note(s): 1Artificial intelligence, 2Blood oxygen level

Source(s): Company websites, Press releases, Industry reports, 1Lattice & Sorin analysis © 1Lattice | 24
D2C Electronics Segment Case Study: Boat

Founders Launch year Years to INR 100Cr Revenue

Aman Gupta, 2016 ~2 years ~INR 3,403 Cr (FY23)
Sameer Mehta

Value proposition
• A youth centric lifestyle brand, selling affordable audio devices, wearables & accessories
• Targets mass market, while maintaining focus on style & innovation

Current offerings

Audio devices Smart Accessories Grooming

• Earwears wearables • Power banks devices
• Headphones • Watches • Cables • Trimmers
• Speakers • Rings • Car
accessories

Success enablers for boAt

• Market entry: Launched with indestructible iPhone cables,

became a major hit due to low durability of iPhone cables
previously

• Market need & whitespace identification: Identified need

for affordable high bass audio accessories
- Offering: Launched bass enriched, high quality audio
products at an affordable price point

• Expanding distribution network: Started offline retail by

partnering with large retail chains like Reliance Digital,
Croma, & retail stores
- As of CY22, has a pan-India network of 13K+ stores,
40+ modern retail chains & 40 distributors

• Endorsement & collaborations: To attract youth, signed

celebrities like Hardik Pandya, Kiara Advani, Diljit Dosanjh
- Collaborated with brands, events, movies, &
influencers, re-stating its youth centric & lifestyle
brand image, e.g. Marvel, Bira91, Masaba, Lakme
Fashion Week, etc

• Category expansion: Started as an accessories brand,

expanded to audio & wearables, now expanding in
personal grooming market, under the brand ‘MISFIT’

Source(s): Company websites, Press releases, 1Lattice & Sorin analysis

© 1Lattice | 25
D2C Electronics Segment Case Study: Lifelong

Founders Launch year Years to INR 100Cr Revenue

Atul Raheja, Bharat Kalia, 2015 ~3 years ~INR 341Cr (FY23)
& Varun Grover

Value proposition
• Consumer-durable brand selling a wide range of products
• Data-driven product development, targeting mass market with strong customer association

Current offerings

Kitchen (Oven, Home Fitness Grooming

kettle, gas appliances (Cycle, (Hair curler,
stove, mixers, (Fan, heater, treadmills, face spatula,
etc) stabilizers etc) yoga mats, trimmers, etc)
etc)

Lifestyle (Massagers, Smart home (Sensors, Accessories (Power

humidifier, steamer, bulbs, plug, doorbell, banks, wrist
etc) etc) watches, etc)

Success enablers for Lifelong

• Market entry: Launched with compact mixer grinders; expanded

to kitchen, home, grooming & lifestyle eventually

• Market need & whitespace identification: Identified need for

compact & innovative consumer durables at affordable
price-points
- Customer centric products: 60-90 days product development
cycle, revolves around identifying customer needs via channel
& product insights targeting tier 1, 2, & 3 cities

• Asset free manufacturing & lean supply chain: Lease factories to

manufacture exclusive Lifelong products. Eliminated middlemen
by focusing on D2C to offer competitive prices

• Endorsement & collaborations: Collaborated with Milind Soman

launching range of fitness products. Signed celebrities like Vinay
Pathak & Pooja Gor as brand ambassadors

• Digital first approach: Digital content focusing on product

installation, self service of appliances has helped Lifelong to limit
overheads & increase product reach

Source(s): Company websites, Press releases, 1Lattice & Sorin analysis

© 1Lattice | 26
Agenda

India Retail Market Overview

India D2C Market Overview

India D2C Investment Landscape

Segment Specific Deep-Dives

Electronics

Beauty & Personal Care

Fashion

Grocery

Benchmarking Sub-Segments Across the

D2C Landscape

Looking Back

Looking Ahead

© 1Lattice | 27
D2C Segment Deep-Dive: BPC1

India D2C BPC market expected to Marketplace market share expected

grow at a CAGR of ~40% from FY23-27 to increase by ~3% from FY23-27

India D2C BPC Market Size India D2C BPC Market Sales Channel Mix
(US$ B, FY23-27P*) (US$ B, FY23-27P*)

7.6
7.6

24%
CAGR
~36%
22%

2.2 2.2
25% 54%
24%
51%

FY23 FY27P* FY23 FY27P*

Marketplace Brand.com Offline

Note(s): 1Beauty & Personal Care, *Projected

Source(s): CII India D2C report, IAMAI DNB report, 1Lattice & Sorin analysis © 1Lattice | 28
D2C BPC1 Segment: Key Trends

Leveraging digital channels & technology

• Social media & influencer marketing helping drive
a connect with target audience, especially in tier 2+
cities
• Strategic partnerships with E-Commerce platforms
to expand their reach & improve distribution

Offering personalization & subscription-based solutions

• Focus on offering personalized & customizable products
to cater to diverse preferences
• Brands are analyzing consumer data to create targeted
products & recommendations

Increasing demand for sustainable products

• Growing awareness & demand for clean & sustainable
beauty products. Focus is on natural ingredients
- Eg: Ayurvedic & natural products are often positioned
as premium, catering to growing concerns about
ingredients

Increased R&D in product awareness

• Conducting market research, focus groups, &
surveys to understand how consumers’ perceptions
about products & brand image
- Eg: Recognizing the diversity of Indian skin tones,
Plum invests in R&D to formulate products
suitable for various skin types

Expansion of men’s grooming

• Brands are targeting male consumers with
specialized products catering to their needs,
including skincare & haircare
- Eg: Brands like Beardo, Ustraa, Man Matters
have positioned their offerings targeting men

Note(s): 1Beauty & Personal Care

Source(s): Industry reports, Press releases, 1Lattice & Sorin analysis © 1Lattice | 29
D2C BPC1 Segment: Market Landscape

Men’s Grooming

Men’s Wellness

Women’s Grooming (Cosmetics)

Private Label

Personal Care

Subscription model Personalised model

Note(s): 1Beauty & Personal Care, This is not an exhaustive list of brands
Source(s): Company websites, 1Lattice & Sorin analysis © 1Lattice | 30
D2C BPC1 Segment: Key Success Factors

Parameters Description Example

Innovation & product • Persistent innovation: Continuously Leverages virtual try-on

development evolving products, packaging, & technology through its “Try It On”
feature on website/app
marketing strategies to address
dynamic demands of consumers
• Extensive product range: Offering a wide
array of options tailored to various skin
tones, hair types, & individual
preferences

Localization & • Cultural sensitivity: Recognizing & Nykaa Private Label caters to
different regional preferences with
cultural sensitivity catering to diverse cultural preferences localized content
prevalent across different regions of India
• Tailored localization: Adapting marketing
messages & product offerings to suit the
unique tastes & preferences of local
Private Label
markets

Creating customer • Customer alignment: Focusing on Man-matters offers toxin free

resonance products that resonate with the values &
products, personalized basis
requirements
identities of the target audience
• Niche targeting & unmet needs: Crafting
product lines tailored to specific
communities rather than the general
market, such as ‘men’s wellness
products’, & providing personalized
subscription services

Customer • Online channel utilization: Establishing a Beardo has built a community of

male grooming enthusiasts on
engagement strong online presence through social social media
media platforms, E-Commerce outlets, &
leveraging influencer partnerships for
enhanced visibility
• Compelling content: Engaging
consumers through interactive content &
customized experiences, emphasizing
community-building initiatives

Sustainability • Embracing natural ingredients: Meeting mCaffeine offers natural & vegan
beauty products
increasing demand for toxin-free, vegan,
& organic products by incorporating
natural ingredients
• Social responsibility: Commitment to
sustainable practices to align with the
growing preference for eco-friendly &
socially responsible brands

Note(s): 1Beauty & Personal Care

Source(s): Company websites, Press releases, Industry reports, 1Lattice & Sorin analysis © 1Lattice | 31
D2C BPC1 Segment Case Study: Mamaearth

Founders Launch year Years to INR 100Cr Revenue*

Ghazal Alagh, 2016 ~3 years ~INR 1,515Cr (FY23)
Varun Alagh
Value proposition
• A natural ingredients & toxin-free personal care brand
• Started as a baby care brand, later branched out into skin care, hair care, body care, fragrances
& color cosmetic

Current offerings

Babycare (Shampoo, Skincare (Facewash, Haircare (Shampoo,

oralcare, oil, lotion, serum, lotion, soap, conditioner, oil, serum,
etc.) etc.) etc .)

Color cosmetics Fragrances

(Lipstick, foundation, concealer, etc.) (Perfume & deodorants)

Success enablers for Mamaearth

• Market entry: Entered the market by offering plant-based & chemical free
baby care products catering to millennial parents
- Initial products were inspired from traditional DIY beauty recipes

• Market need & whitespace identification: Recognized the demand for

personal care items that are clean, non-toxic & organic, targeting specific
needs & demands
- Offering: Offered baby care products & further diversified into skin care,
hair care, body care, fragrances, & color cosmetics

• Endorsement & collaborations: To stay relevant among millennial parents,

Mamaearth signed actress Shilpa Shetty to communicate with their
consumers directly from a mother’s point of view

• Expanding distribution network: Expanded to offline retail & partnered with

large retail chains like Shoppers Stop, Apollo Pharmacy, & other small retailers
- As of CY22, has pan-India network of 120K+ stores

• Business expansion: After reaching ~INR 100Cr revenue mark, expanded to

different brands & product offerings targeting specific customer requirements
- In CY20, launched The Derma Co, in CY21 launched Aqualogica & Ayuga
- In CY23, released IPO, proceedings from which was used for advertising
setting up new exclusive brand outlets & investment in subsidiaries

Note(s): 1Beauty & Personal Care, *Revenue is for parent company Honasa Consumer Limited
Source(s): Company websites, Press releases, 1Lattice & Sorin analysis
© 1Lattice | 32
D2C BPC1 Segment Case Study: Minimalist

Founders Launch year Years to INR 100Cr Revenue

Mohit Yadav, 2020 ~2 years ~INR 188Cr (FY23)
Rahul Yadav

Value proposition
• Minimalist positions itself as a “transparent beauty” brand
• Recentering skincare conversations on science to dispel misconceptions with transparent &
data-driven approaches

Current offerings

Skincare (Sunscreen, Haircare (Serum, Bath & Body (Lotion,

serum, cleanser, Shampoo, hair deodorant, body
moisturizer, lip balm, eye mask, etc.) wash, exfoliator, etc.)
cream, etc.)

Success enablers for Minimalist

• Market entry: Entered the market with a range of serums targeting particular
skin concerns
- All products featured ingredient lists with percentages & benefits backed
by scientific data & test reports

• Market need & whitespace identification: Recognizing the necessity for

scientifically backed skincare
- Offering: Initially offered skincare further expanded into a diverse product
portfolio (~42 products) including hair & body care

• Marketing strategies: Established robust social media presence with an active

community over various platforms such as Instagram, Facebook, etc.
- Centering conversations on product science and emphasizing safety &
effectiveness on platforms like YouTube

• Expanding distribution network: Expanded to multiple marketplaces such as

Amazon, Nykaa Private Label & Flipkart, which has led to increased demand
from the brand is all parts of the country
- Expected to expand into offline retail with plans to unveil its first outlet in
March 2024

• Business expansion: Secured funding from different investors to increase

manufacturing capabilities & launch new offerings
- Set to increase manufacturing capacity to support the ~10K orders per day
mark
- As part of Minimalist 2.0, launching new products & reformulating
bestselling serums

Note(s): 1Beauty & Personal Care

Source(s): Company websites, Press releases, 1Lattice & Sorin analysis © 1Lattice | 33
Agenda

India Retail Market Overview

India D2C Market Overview

India D2C Investment Landscape

Segment Specific Deep-Dives

Electronics

Beauty & Personal Care

Fashion

Grocery

Benchmarking Sub-Segments Across the

D2C Landscape

Looking Back

Looking Ahead

© 1Lattice | 34
 D2C Segment Deep-Dive: Fashion

India D2C fashion market expected to Brand.com’s market share expected

grow at a CAGR of ~35% from FY23-27 to increase by ~10% from FY23-27

India D2C Fashion Market Size India D2C Fashion Market Sales Channel Mix
(US$ B, FY23-27P*) (US$ B, FY23-27P*)

14.9 14.9
9%

CAGR
~34% 35%

4.6 4.6
11% 56%
25%

64%

FY23 FY27P* FY23 FY27P*

Marketplace Brand.com Offline

Note(s): *Projected
Source(s): CII India D2C report, IAMAI DNB report, 1Lattice & Sorin analysis © 1Lattice | 35
D2C Fashion Segment: Key Trends

Integrating technology for better experience

• Brands are increasingly leveraging AI1, big data
analytics & other tech to get better customer insights
& introduce new offerings
• Creation of new designs that best meet customer’s
needs

Shift towards sustainable fashion

• Emergence of cause-based brands to provide
sustainable clothing items with a zero-exploitation policy
• Focused on reducing environmental impact & improve
stakeholder support
- No Nasties, 11.11, Doodlage are some brands offering
sustainable clothing

Personalization & customization of offerings

• Brands are offering unique tailor-made solutions to
address unique customer preferences & demands
- Bombay Shirt Company, The Pant Project &
TIPSYFLY are some brands offering customizable
options

Celebrity & influencer owned labels

• Celebrities are launching their own labels or investing in
brands opposed to merely endorsing one
• Social media impacts customer buying preference

Affordability
• Trendy & affordable products are gaining traction due
to changing customer behaviour, especially amongst
the Gen Z
• Influence of frequent & hyped launches by fashion
brands

Note(s): 1Artificial Intelligence

Source(s): Industry reports, Press releases, 1Lattice & Sorin analysis © 1Lattice | 36
D2C Fashion Segment: Market Landscape

Apparel

Accessories

Footwear

Jewelry

Women’s wear Men’s wear Ethnic wear

Intimate clothing Baby/kid’s wear Athleisure

Note(s): This is not an exhaustive list of brands

Source(s): Company websites, 1Lattice & Sorin analysis © 1Lattice | 37
D2C Fashion Segment: Key Success Factors

Parameters Description Example

Revenue • Capitalizing on lucrative margins: Fashion sector Margins typically are:- 50-
60% (Apparel & footwear),
optimization inherently yields high AOVs & substantial profit 25-30% (jewelry)
margins
• Agile pricing strategies: Employ dynamic pricing
methods that adjust prices & discounts based on
real-time customer demand, preferences, & market
dynamics

Demand-driven • Continuous design innovation: Sustain consumer Suta leverages data

analytics to gauge product’s
product engagement & drive repeat purchases through order metrics
assortment constant stream of fresh design iterations
• Data-driven decision-making: Harness
comprehensive data analytics to derive
actionable insights into consumer preferences,
guiding informed product development strategies

Product innovation
• Pioneering product offerings: Foster innovation by Using advanced yarns &
textile tech (wrinkle-free, flex
introducing novel styles, materials, & design tech waist, thermo-
concepts regulating, breathable
material) for stretchy, comfy
• Revitalizing underexplored segments: Revitalize pants
dormant market segments such as men's jewelry
& accessories to unlock untapped potential

Enhanced • Enhanced customer experience: Elevate customer Bummer focused on building

customer quirky innerwear to attract
satisfaction levels through improved sizing youth
experience guidance, personalized tailoring options, &
hassle-free return / exchange policies
• Discreet product exploration: Facilitate discreet
shopping experiences, fostering customer comfort
in exploring diverse offerings especially in hush
categories like innerwear

Personalization & • Personalized offerings: Implement customization Lenskart offers virtual try-on
technological feature, allowing customers
models, to cater evolving consumer preferences
to try various frames
integration • Interactive catalog experience: Integrate virtual digitally
try-on functionalities to enrich product cataloging,
empowering customers

Trust- building • Establishing trust: Provide authentication Caratlane offers

measures authenticity certificates with
certificates for jewelry items, instilling confidence each article of jewelry sold
& trust in consumers
• Synergistic omni-channel presence: Strive for a
strategic blend of online & offline touchpoints to
augment brand accessibility & consumer
engagement across diverse channels

Source(s): Company websites, Press releases, 1Lattice & Sorin analysis © 1Lattice | 38
D2C Fashion Segment Case Study: GIVA

Founders Launch year Years to INR 100Cr Revenue

Ishendra Agarwal, 2019 ~3 years ~INR 167Cr (FY23)
Nikita Prasad, Sachin Shetty

Value proposition
• Positions offering of hallmarked jewelry as accessible elegance
• Offers customer-centric innovation through personalized communication, easy returns &
warranties

Current offerings

Rings Earrings Necklaces & Bracelets Others (Anklets, charms,

pendants mangalsutras, etc.)

Success enablers for GIVA

• Market entry: Started with affordable silver jewelry, was inspired from the
average spend on fine jewelry being three times more in India than compared
to the west

• Customer awareness: Dispelled misconceptions1 about silver jewelry amongst

Indian consumers through partnerships with influencers & celebrities like
Anushka Sharma

• Customer feedback & engagement: GIVA recognised trust-centric nature of

jewelry business & initially engaged with customers individually
- To address issues of scale, GIVA hired marketing automation services, which
increased repeat customer rate from once / year to at least twice / year

• Product innovation: GIVA focused on creating customer centric offerings

- Provided lifetime plating services & 6-month warranty on articles sold
- Built an in-house design team, launching 50+ articles each week

• Omni-channel approach: Shifted focus to an omni-channel approach, GIVA

expanded beyond exclusive online presence
- As of CY23, it boasted 80+ operational offline stores in major India cities

• Category expansion: GIVA after success in silver jewelry space, launched it’s
14K & 18K gold jewelry, featuring responsible diamonds

Note(s): 1Tarnishability, durability, etc.

Source(s): Company websites, Press releases, 1Lattice & Sorin analysis
© 1Lattice | 39
D2C Fashion Segment Case Study: HRX

Founders Launch year Years to INR 100Cr Revenue

Afsar Zaidi, Hrithik Roshan, 2013 ~5 years ~INR 3,610Cr* (FY23)
Kamal Punwani & Sid Shah

Value proposition
• Homegrown activewear brands owned by Hrithik Roshan
• Offers products including footwear, men & women activewear, backpacks, accessories,
equipment, etc.

Current offerings

Clothing (T-shirts, joggers, Footwear

innerwear, jackets, etc.)

Accessories (Eyewear, smartwatch, Equipment (Yoga mat, bicycle,

audio, bags, mask, etc.) dumbbells, shaker etc.)

Success enablers for HRX

• Market entry: Launched by offering affordable activewear

- Positioned as a collection inspired from Hrithik Roshan’s style & his lifelong
dedication in achieving fitness

• Brand awareness: Strategic partnerships with Myntra & Cultfit helped in

achieving rapid user acquisition & build brand awareness
- Created engaging content, including workout videos, fitness tips, &
motivational messages to builds brand loyalty & keeps customers engaged

• Collaboration: Became official fan merchandise partner for four teams in the
Indian Premier League (IPL) in CY23

• Product expansion: Evolved from fitness brand to a lifestyle brand, providing

value-for-money, high quality alternatives to international brands
- Created affordable fitness accessories in collaboration with Xiaomi
- Launched HRX Active Fragrances line in collaboration with Baccarose

• Business expansion: Launched offline stores in CY19, expanded presence in

cross-category product lines
- Ventured into healthy food habits, by launching HRX by EatFit in CY22
- Launched HRX Cafe in Bangalore, partnered with Curefoods to bring in
fusion of fitness, wellness & culinary excellence in CY22
Note(s): Revenue of Myntra which acquired HRX in 2016
Source(s): Company websites, Press releases, 1Lattice & Sorin analysis
© 1Lattice | 40
Agenda

India Retail Market Overview

India D2C Market Overview

India D2C Investment Landscape

Segment Specific Deep-Dives

Electronics

Beauty & Personal Care

Fashion

Grocery

Benchmarking Sub-Segments Across the

D2C Landscape

Looking Back

Looking Ahead

© 1Lattice | 41
 D2C Segment Deep-Dive: Grocery

India D2C grocery market expected to Channel-wise market share expected to

grow at a CAGR of ~40% from FY23-27 remain constant from FY23-27

India D2C Grocery Market Size India D2C Grocery Market Sales Channel Mix
(US$ B, FY23-27P*) (US$ B, FY23-27P*)

26.0 26.0

14%

CAGR 15%
~41%

6.7 6.7 71%

15%
16%
69%

FY23 FY27P* FY23 FY27P*

Marketplace Brand.com Offline

Note(s): *Projected
Source(s): CII India D2C report, IAMAI DNB report, 1Lattice & Sorin analysis © 1Lattice | 42
D2C Grocery Segment: Key Trends

Unadulterated & fresh offerings

• Brand focus on natural & fresh
products
• Farm to home & unprocessed
integrated supply chain models
are becoming popular

Subscription & customization model

• Subscription models emerging to
drive repeat customers & higher
purchase frequency

Transparency in product offering

• Honest advertising in terms of food
ingredients & communication,
focus on natural ingredients
• Brands like Country Delight offer
self-test kits to build trust

Conscious snacking options

• Products made from millet, ragi, etc.
are preferred based on their health
benefits
• Vegan & cruelty-free products are
gaining traction

Consultation or diet plans

• Platforms like Ketofy offer
personalized diet plans
enabling users to consult with
certified experts

Source(s): ): Industry reports, Press releases, 1Lattice & Sorin analysis © 1Lattice | 43
D2C Grocery Segment: Market Landscape

Meat / Meat Alternatives

Dairy / Dairy Alternatives

Beverages

Packaged Foods

Subscription model Personalised model

Note(s): This is not an exhaustive list of brands

Source(s): Company websites, 1Lattice & Sorin analysis © 1Lattice | 44
 D2C Grocery Segment: Key Success Factors

Parameters Description Example

Quality & • Unique value proposition: Develop differentiated The whole truth offers
differentiation chemical-free healthy snacks
offering centered around natural ingredients, with clean* packaging
aimed at attracting & retaining loyal customer
base
• Rigorous quality assurance: Employ cutting-edge
technologies for regular product testing, ensuring
consistently high-quality products

Optimizing • Enhanced platform performance: Optimize Licious has an easy-to-use

E-Commerce website & a user-friendly
product listings, images, & descriptions to bolster app
platform visibility, enhancing conversion rates
• Intuitive user experience: Implement secure &
user-friendly online shopping interfaces to
facilitate seamless transactions

Supply chain • Technological integration: Integrate advanced Dairy & meat D2C brands
management technologies within the supply chain to bolster have tech integrated supply
chain
efficiency & uphold product quality standards
• Strategic supplier relations: Foster robust
relationships with suppliers to secure a diverse &
reliable range of products

Customer • Dynamic online presence: Cultivate a strong Sleepy Owl Coffee has an
relationship social media presence to engage & educate active social media page,
boosting engagement
management consumers effectively
• Interactive customer engagement: Drive
engagement through targeted promotions, loyalty
programs, & personalized recommendations

Innovation & • Continuous product innovation: Stay aware of Rage Coffee offers a large
product selection of flavors in instant
market trends & consumer preferences,
coffee
expansion innovating product offerings accordingly
• Strategic product line expansion: Expands
product portfolio to offer a comprehensive array of
flavors & tastes

Customer reviews • Proactive improvement initiatives: Solicit & act Country Delight utilizes
& feedback customer reviews for
upon customer feedback to continually enhance promotional material
products & services
• Harnessing positive feedback: Encourage &
leverage positive customer reviews to bolster
brand trust & credibility

Note(s): *No hidden ingredients

Source(s): Company websites, Press releases, 1Lattice & Sorin analysis © 1Lattice | 45
D2C Grocery Segment Case Study: Country Delight

Founders Launch year Years to INR 100Cr Revenue

Chakradhar Gade, 2015 ~4 years ~INR 547Cr (FY23)
Nitin Kaushal

Value proposition
• Provides natural, fresh, & unadulterated milk directly to the doorstep of consumer
• Offers bread, ghee (clarified butter), paneer (cottage cheese), yogurts, & healthy smoothies

Current offerings

Milk & Milk product Ghee & Fruits &

coconut (Yogurt, oils vegetable
water paneer, etc)

Bread & Other (Pulse, cereal, seeds,

eggs pre-mix, spices, snacks, etc)

Key levers for Country Delight

• Market entry: Started by providing milk sourced directly from farmers,

guaranteeing freshness & freedom from harmful chemicals or additives
- Diligent quality assurance process with 107+ tests everyday

• White space identification: Identified loopholes in traditional milk supply

chain, eliminated middlemen, ensured customers receive high-quality
products directly from the source

• Subscription model: Customizable subscription plan allowing customers to

receive fresh milk every day & view their monthly grocery spending
- ~6K delivery workers fulfilled ~5M orders monthly, serving more than 30K
households in CY22

• Product expansion: Started supplying fresh produce to the Delhi-NCR

market
- Launched dry fruits in the month of October of CY22 to coincide with
Diwali
- Plans to broad its offerings like jams & pickles, among other products

• Market reach: Network of 10K+ farmers, presence in ~11 states, delivers in

~25 cities, major presence in northern parts of India
- ~10% month-on-month revenue growth across geographies in CY23

Source(s): Company websites, Press releases, 1Lattice & Sorin analysis

© 1Lattice | 46
D2C Grocery Segment Case Study: Akshayakalpa

Founders Launch year Years to INR 100Cr Revenue

Dr. G.N.S. Reddy, 2010 ~11 years ~INR 194 Cr (FY23)
Shashi Kumar

Value proposition
• Provides products free from antibiotics, synthetic additives, hormones & chemical pesticide residue
• Offers milk, bread, ghee (clarified butter), paneer (cottage cheese), yogurts, honey, vegetables, etc.

Current offerings

Milk & Milk product (Greek yogurt, Ghee &

coconut paneer, buttermilk, cheese, oils
curd, etc)

Vegetable Bread & Other (Dosa batter,

eggs honey, mango drink, etc.)

Key levers for Akshayakalpa

• Market entry: Entered the market offering organic, antibiotics, &

hormone-free dairy products
- Incubated rural entrepreneurship by radically redefining dairy processes

• Value chain enhancement: Supported farmers in establishing their farms to

generate viable income, currently working with ~750 farmers
- Arranged microfinance for farmers through campaigns on P2P* lending
platforms

• Organic marketing: For the first ten years, focused only on Bangalore market
& zero marketing spends, relied on word-of-mouth & personal networks
- Took consumers to their farm to demonstrate processes & practices
- Have started producing explanatory videos & campaigns on social media
platforms

• Market expansion: Serves ~60K customers daily through app, ~2K retail
outlets & E-Commerce platforms like Bigbasket, Swiggy Instamart, others
- Currently available in 40+ cities & plans to extend in more tier-2 cities

• Sustainability: Recycle used milk pouches, gable top packaging that is 100%
recyclable & 92% biodegradable
- Encourage localization of all resources & technological advancement to
cultivate chemical-free produce

Note(s): *Peer-to-peer
Source(s): Company websites, Press releases, 1Lattice & Sorin analysis
© 1Lattice | 47
Agenda

India Retail Market Overview

India D2C Market Overview

India D2C Investment Landscape

D2C Segment Deep-Dive

Benchmarking Sub-Segments Across the

D2C Landscape

Looking Back

Looking Ahead

© 1Lattice | 48
Benchmarking Consumer Segments across the D2C Landscape

Consumer Segment Benchmarking across the D2C Landscape

Parameters BPC Fashion Electronics Grocery

D2C Market ~US$ 8B ~US$ 15B ~US$ 7B ~US$ 26B

Size, FY27

Expected CAGR 36% 34% 40% 41%

(FY23-FY27)

Average
INR 300 – 2,000 INR 400 – 2,500 INR 500 – 5,000* INR 200 – 1,000
Order Value

Purchase Monthly Quarterly Yearly Weekly

Frequency

High repeat Product Product High chances

across offering comparison comparison of repeat
Repeat Purchase before before purchase due
purchase purchase to taste
specifications

Category Gross 65-75% 50-60% 40-50% 35-45%

Margin

High brand Seasonal Moderate to Brand

loyalty due to brand loyalty, low brand loyalty due
Brand Affinity customer’s frequent style loyalty to repetition
trust in changes
offerings

Medium shelf Long shelf life, Long shelf life, Perishable

Inventory life & fast seasonal slow turnover products, fast
Management turnover turnover turnover

High in- High High Medium

category & in-category & in-category & category
Product cross-category medium limited expansion
Expansion
expansion cross-category cross-category scope
scope expansion expansion
scope scope

Time to INR 100Cr

Revenue ~2-3 years ~4-5 years ~3-4 years ~4-5 years

Category Very High Very High Moderate Moderate

Attractiveness

Very high High Moderate Low

Note(s): *White products sell for higher prices, D2C electronics AOV is estimated in the INR 500 - 5,000 range
Source(s): Industry reports, 1Lattice & Sorin analysis
© 1Lattice | 49
Agenda

India Retail Market Overview

India D2C Market Overview

India D2C Investment Landscape

D2C Segment Deep-Dive

Benchmarking Sub-Segments Across the

D2C Landscape

Looking Back

D2C Key Success Factors

D2C Enablers Support

Looking Ahead

© 1Lattice | 50
D2C Key Success Factors

D2C brands should focus on creating unique offerings & organic brand building
practices for sustainable growth in the long run

Budding brands Growing brands Established brands

(Yearly revenue < US$ 6.0M) (Yearly revenue US$ 6.0M –12.0M) (Yearly revenue > US$ 12.0M)

Focus on product market fit Customer acquisition & Increase efficiency &
& brand building growth omni-channel presence

Marketing • Website traction & • Paid advertisements & • Personalized marketing

Initiatives content marketing partnerships & loyalty programs
- Develop customers - Focus on increasing the - Create brand loyalists
organically & cost- customer outreach for & drive repeat
effective manner more brand trial purchase

Operating • Process & inventory • Process & warehousing • Logistics optimization &
Activities optimization streamline presence expansion
- Focus on core - Use inventory - Optimize logistics &
offerings & effectively management tools & create omni-channel
manage inventory software for better presence, geographical
control & planning expansion

Technology • Website optimization & • Automation & data • Integration & Forecasting
Usage tracking analytics - Integrate all business
- Utilize DIY1 platforms - Automate platforms to functions, optimize
like Shopify & Wix, gather data on different resource allocation,
track website traffic metrics, analyze to deploy demand
& conversion create personalized forecast models
offerings

Team • Founders & • Department structure & • Cross functional team &
Building core team specialized roles leadership development
- Small, lean team - Create separate - Create collaborative
focusing on essential departments with roles with focus on
roles, developing defined roles & knowledge sharing,
interchangeable responsibilities investment in training &
skills development

Funding • Business incubators, • Angel investments, • Private equity

Medium microloans, accrued venture capital, accrued investment, debt raising,
cashflow cashflow sustainable growth
- Focus on raising - Capital expansion for - Large capital source,
funds effectively business growth focus on growing
without diluting the sustainably maximizing
equity profits

Note(s): 1Do it yourself, US$ 1 = INR 82.25

Source(s): Press releases, Expert interviews, 1Lattice & Sorin analysis
© 1Lattice | 51
Agenda

India Retail Market Overview

India D2C Market Overview

India D2C Investment Landscape

D2C Segment Deep-Dive

Benchmarking Sub-Segments Across the

D2C Landscape

Looking Back

D2C Key Success Factors

D2C Enablers Support

Looking Ahead

© 1Lattice | 52
D2C Enablers: Solving D2C Pain Points & Supporting Scalability

D2C enablers help brands optimize operations, enhance personalization capabilities,

& drive business growth

Product Development
• Gather insights into target audience behaviors
• Identify & address usability issues, optimizing user flows
• Conduct tests & track changes to improve product
• Leverage segmentation & personalization capabilities

Website/App Building
• Built-in interface & templates accelerating website launch
• Easy to use CMS allowing to update product information
• Built-in product management tools
• Marketing tools & analytics to track website performance

Marketing
• Simplify content scheduling & audience analytics
• Insights into website traffic, user behavior & conversion
funnels
• Segmentation based on demographics, interest & purchase
• Help allocating marketing budgets strategically

Sales (Payments)
• Caters to diverse customer preferences & reduces cart
abandonment
• Streamlining order fulfilment & financial management
• Automate inventory updates based on sales
• Integrating data allowing personalized offers & promotions

Logistics
• Track inventory, optimize storage, & picking
• Transparent & up-to-date tracking information on orders
• Utilize data & analytics assisting in logistics strategies &
investments
• Maintain control over supply chain

Customer Support
• Offer seamless support across multiple channels
• Delegate repetitive tasks to chatbots & automated
workflows
• Gather customer feedback through surveys & reviews
• Foster closer connections with customers

Omni-channel Expansion
• Help digital native brands expanding offline
• Offers services like retail space leasing, retail strategy,
store designing, & launch
• Helps in-store operations, day-to-day management, staff
training, & infrastructure management

Note(s): This is not an exhaustive list of enablers

Source(s): Industry report, 1Lattice & Sorin analysis © 1Lattice | 53
Agenda

India Retail Market Overview

India D2C Market Overview

India D2C Investment Landscape

D2C Segment Deep-Dive

Benchmarking Sub-Segments Across the

D2C Landscape

Looking Back

Looking Ahead

© 1Lattice | 54
Predicting the Way Ahead for D2C Brands [1 / 2]

Parameters Description Example

Process • Automating key decision support systems Ultrahuman collaborated with

automation that enable the brand to make right decision
basis different parameters
• Prioritizing channel & marketing campaigns
basis product performance
Tradexa (automation platform)
to expand reach in E-Commerce
domain

Rampant • Generative AI enables brands to create Noise IntelliBuds provides

adoption of AI* compelling & personalized content utilizing customized EQ, voice control, &
smart gesture control
vast datasets catering to specific audience
preferences
• Predictive AI helps decoding consumer
behavior by analyzing historical data &
patterns to anticipate consumer needs, &
forecast trends

Sustainability & • Growing demand for eco-friendly products Vedix uses only plant-based
ethical sourcing & ethical manufacturing practices ingredients in their products

• Brands are focused on promoting domestic

craftsmanship, recyclable materials, &
ensuring fair wages for workers

Social commerce • Seamless integration of social media Sugar Cosmetics hosts live
integration platforms with E-Commerce for product commerce events on social
media allowing direct purchase
discovery & purchase
• Brands effectively leveraging social
commerce expected to gain vast potential of
online shoppers

Omni-channel • Increased adoption of omni-channel Lenskart now operates >1K offline

approach approach, integrating physical stores & retail stores which has helped in driving
revenue growth
spaces
• Facilitates access to a wider demographic,
especially in areas with limited online
engagement

Note(s): *Artificial Intelligence

Source(s): Industry reports, Media publications, 1lattice analysis © 1Lattice | 55
Predicting the Way Ahead for D2C Brands [2 / 2]

Parameters Description Example

Hyper- • Hyper-localization strategies to cater to the Mamaearth offers vernacular

localization diverse preferences & increase reach to Tier 2 language support to reach wider
audience in Tier 2-3 cities
& 3 cities
• Localized marketing campaigns,region-
specific product variations, & partnerships
with local suppliers

Emergence • Localizing presence in high-demand regions Zippee provide D2C brands

of dark stores to help brands facilitate quick fulfilment of network of dark stores & last-mile
delivery
online orders
• Assist brand in having greater control over
inventory quality, cutting down on
operational costs

D2C brands • Legacy heritage brands are acquiring D2C Acquired D2C health food brand
acquisition brands to undergo crucial digital True Elements & Just Herbs in
CY22
transformation
• Serve as a strategy initiative for heritage
brands to stay relevant & connect with
consumers

Established • Established brands are also introducing their HUL has launched it own D2C
players launching own D2C brands to align with evolving brands such as Dove baby,
Simple & Dermalogica
D2C brands consumer tastes
• By forging direct links with consumers, these
brands acquire valuable insights, customize
offerings, & swiftly adapt to changing trends

Note(s): *Artificial Intelligence

Source(s): Industry reports, Media publications, 1lattice analysis © 1Lattice | 56
What we heard from the D2C Ecosystem

“A critical winning factor right now is finding a
strong brand market fit; this can happen by
identifying an under-served customer niche
and understanding a product problem that
you can fix.”
- Founder, Electronic brand
“Brands should cultivate a digital-first
mindset from the outset, this entails a
grasp of fast supply chain dynamics,
proficiency in marketing, and brand
positioning in the digital space. Effective
storytelling is key to establishing a brand's
presence in the digital world.”
- CEO, Online marketplace
“In modern marketing, influencers wield
considerable influence over consumers'
purchasing choices. Initially recognized for
product promotion, influencers have evolved
to deeply engage with their followers,
leading to the rise of influencer marketing
as a credible advertising avenue.”
-CEO, Online marketplace
"Learn from the mistakes of others and
avoid repeating them. Instead of making the
same errors, leverage those lessons to
enhance your business. If you're going to
make mistakes, let them be new ones,
rather than repeating past ones.“
- Founder, Innerwear brand

“Omni-channel has gained significant

“Brands explore offline avenues as not all
traction. Seamless integration between
purchasing habits have migrated online.
online & offline channels is essential for
Maintaining an offline presence is vital for
success. Without this cohesion, it merely
expanding market share. Until the entire
resembles a multichannel approach rather
market adopts online practices, consumers
than authentic omni-channel retailing.”
will continue to utilize omni-channel
- CMO, Apparel Brand approaches.”
-Founder, Wellness brand
“D2C is a journey of brand wherein your
target audience trusts you, this requires
“The product captures customers'
consistent communication with your
attention, the story convinces them to buy,
customers, a good social media presence
and data ensures their loyalty. At every
& efficient after-sales support.”
stage of expansion, leveraging insights
- Director, Footwear brand from data analysis is crucial for improving
customer satisfaction and maintaining
brand integrity.”
“Product innovation serves as the main
-Founder, Jewelry Brand
catalyst for launching a business, with
product differentiation and targeting
specific consumer segments being crucial
factors. Sustaining a brand relies on
customer satisfaction and their perception
of the product's quality and taste.”
- Founder, Dairy brand

Sources: Expert interviews, 1Lattice & Sorin analysis

© 1Lattice | 57
About the Authors

Mandar Dandekar Anshul Bansal Harsh Khara

Partner Principal Vice President

Ashish Dhir Abhishek Maiti Fanindra Tibrewal

Senior Director Director Project Manager
Consumer & Retail Technology & Internet Technology & Internet

Meghna Arya Vansh Rastogi

Business Analyst Analyst
Technology & Internet Technology & Internet
What is Toplyne?
Topyne is used by D2C brands to drive more purchases from their high-value
customers and to find more like them through Google & Meta ads. Toplyne
learns from website data to predict the lifetime value (LTV) of each visitor and
gets ads in front of the right buyers at the perfect time

How does Toplyne work?

Toplyne is used by brands to generate retargeting and prospecting audiences
for Meta and Google campaigns. This happens in three quick steps:

1
Capturing website behavior - The Toplyne Pixel, installed
either through GTM or custom code on websites, tracks
user behavior across sessions.

2
Model training - During a learning period, Toplyne’s AI
understands user behavior, propensity to purchase, and
starts to predict LTV and AOV of each website behavior.

Syncing audiences - A one-click integration to Meta &

3 Google ads enables brands to tag these first-party AI

audiences to their ad campaigns, leading to 35%-70%
higher Return on Ad Spend (ROAS) within 30 days.

Toplyne provides a 30-day free trial, enabling brands to

A/B test their campaigns with first-party AI audiences
and measure changes in their ROAS.
 200+ 30%
annual engagements faster to outcomes

8 600+
practices years domain expertise

130+ 98%+
team members accuracy

100+ 2.5M
towns & cities panel members

15+ 40:60
languages covered she/he ratio

What We Do
Making organizations effective through data-driven insights,
Vision innovative tech solutions and proven expertise to
enable better decisions

To provide technology led solutions that unlock that power of

Mission
trustable data, actionable research, and deep network of experts

Technology
What We Do
Data + People/
Accumulated Professionals/
knowledge Service
providers

Research

© 1Lattice | 59
At 1Lattice, we address the problem statement and serve as the
one-stop platform for all your knowledge and decision support
requirements

Market Customer Channel partner Brand

01 02 research 03 Research (B2B 03
Intelligence Health Track
(B2C research) Research)

• Market Potential • Customer behavior • Channel/ Business • Sources of

Assessment (TAM, (Needs, preferences, partner feedback Awareness
SAM, Attractiveness) Willingness to pay) (recurring sales track)

• Market/ Sector scans • Customer journey • Channel/ Business • Usage & attitude
(360 Market overview) mapping (purchase- partner Audit
to-pay journeys)

• Competitor structure • Price sensitivity • Mystery Shopping • Competitor

and benchmarking analysis benchmarking (Price,
product, services)
• Target Segment • Net Promoter Score • Channel NPS and • Marketing campaign
identification (NPS) and customer satisfaction evaluation (Purchase
(Personal and satisfaction shift pre & post
potential mapping) campaign)
• Forward Trends • Charmer vs Churner • Channel marketing • Brand Reputation
Analysis (Market and study (Switching and and KPI tracking (Net Sentiment)
customer trend retention)
forecasting)

IPO program
05 Advisory 06 Expert network 07
management

• Concept Validation • 30K+ diversified network • Authentic and detailed

members industry reports

• Concept / Product Testing • Depth across industries & • Flexibility of customization

seniority

• Go-to-Market (product • Variety of use cases: • Storyboarding and strawman

launch, customer consultations to long projects with stakeholders
segmentation, pricing
strategy)

• Impact assessment • Transparent pricing from • Financial and operational

(campaigns, products, experts benchmarking against
services) industry peers

© 1Lattice | 60
 We are here for you
Let us know how we can meet your
business requirement?

Ashish Dhir
Senior Director, Consumer & Retail
E: ashish.dhir@1lattice.com

Abhishek Maiti
Director, Technology & Internet
E: abhishek.maiti@1lattice.com

For media queries, Vaishnav Kumar Rai

please contact Manager – Corporate Communications
E: communications@1lattice.com
M: +91 782 794 4925

www.1lattice.com

Disclaimer: This material has been prepared by 1Lattice, which is the trade name of Lattice Technologies Private Limited
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