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Jan, 2021     

A peek inside the growth of D2C & DNB brands

D2C are brands that do >10% sales from their native platform, and DNB are brands that do >60% sales online.


Each sector performed differently during Covid but the pandemic accelerated adoption of ecommerce which in turn gave a major boost to Direct-to-Consumer Brands (D2C) and Digitally Native Brands (DNB) brands. Although these brands have been performing well over the last few years, 2020 was a crucial year that has shown tremendous growth potential for these brands. It can be said that the booming of D2C and DNB brands have been one of the most significant trends that emerged in e-commerce post pandemic.

Here are some of the important insights which emerged from our research-

1. Direct to Consumer (D2C) and Digitally Native Brands (DNB) in India are growing 3-6x faster than offline peers

Indian online retail market split by brand type, USD Bn, 2018,19,20

Some of the popular D2C brands include Licious, Xiaomi, Zivame, Bewakoof, and DNB brands include HRX, Wrogn, Dressberry among others. To put it simply, D2C are brands that do >10% sales from their native platform, and DNB are brands that do >60% sales online.

Their growth has been a pleasure to watch over the last one year as they now account for 30% sales on India ecommerce.

2. Electronics top for D2C & DNB brands with 40% online GMV

Market size by category, USD Bn, CY 19

Our research shows that electronics is the most penetrated category for D2C as well as DNB with 40% online GMV. Moreover, beauty and personal care categories also come very very close.

3. However, growth of categories differ from one another due to many factors

GMV for the top D2C+ DNB brands by category1, Market Share, 2019

Although overall, the brands have seen huge growth, the growth varies from one category to another owing to a number of factors like supply chain issues, availability of products, trust factor among others. Of all the categories, food, grocery and electronics are top heavy while apparel and BPC are more fragmented.

4. D2C & DNB gained massive boost post Covid, but still significant headroom for growth

According to our research, DNB brands emerged in two forms –Private labels for horizontals and marketplaces, niche brands solving specific consumer problems. On the other hand D2C brands are still nascent but gaining prominence, especially post-Covid as players emerge with differentiated offerings to benefit from the larger online user base.

These brands have a long way to go and this year will be one of the crucial years for these brands as some mature while some are still paving their way through the cluttered market and making their own niche.