A regular dose of D2C-centric resources & tools for Growing Brands, Startups & Entrepreneurs.

Navigating the world of Direct-to-Consumer (D2C) e-commerce in India is both exciting and challenging. With the sector expected to grow at a CAGR of 25% and reach $100 billion by 2025, there's immense potential. However, not all advice is beneficial. 

Here, we dissect some of The Worst Advice D2C Brands in India often receive and provide insights on what you should do instead.

1. "Bootstrapping is Bad"

The Advice

❌ Avoid bootstrapping and seek venture capital from the get-go ❌

The Reality

Because who needs financial discipline and control when you can swim in investor money and lose sight of profitability? 

Bootstrapping encourages efficient use of resources and fosters a strong foundation. Relying too heavily on external funding can lead to reckless spending and diluted ownership.

Funding Impact

Real-Life Example

Zoho, a major player in the tech industry, bootstrapped its way to success, maintaining control and profitability. But if you enjoy answering to investors and spending lavishly, avoid bootstrapping at all costs.

2. "Spend More on Acquiring Customers, Ignore Retention"

The Advice

❌ Focus all your resources on acquiring new customers. Retention can come later ❌

The Reality

Acquiring a new customer can cost five times more than retaining an existing one. A 5% increase in customer retention can boost profits by 25-95%. But hey, who needs profits when you can just set your money on fire? 

Cost Comparison

Example

Consider Sugar Cosmetics, which focused heavily on customer retention through personalised emails and loyalty programs. As a result, their repeat purchase rate surged to 54%, significantly reducing their overall marketing costs. But if you prefer the thrill of constant new customer hunts, ignore this.

3. "Discounts Are the Only Way to Drive Sales"

The Advice

❌ Constantly offer discounts to attract customers and drive sales ❌

The Reality

Yes, because devaluing your brand and training customers to never pay full price is the ultimate business strategy. While discounts can boost short-term sales, they can erode your brand’s value and condition customers to wait for sales. Instead, value proposition and product differentiation are key.

Discount Impact Analysis

Example

D2C brand Licious focused on quality and freshness instead of frequent discounts. This strategy helped them build a loyal customer base and maintain a healthy profit margin.

4. "One Size Fits All Marketing Strategy"

The Advice

❌ Use a single, broad marketing strategy for all customer segments ❌

The Reality

Because everyone loves a generic, one-size-fits-all approach in a country known for its diversity. India’s diverse demographic requires targeted marketing. Personalisation can increase conversion rates by up to 10%.

Marketing ROI

5. "Ignore the Power of Local Influencers"

The Advice

❌ Focus on big influencers with millions of followers ❌

The Reality

Micro and local influencers often have higher engagement rates and more trust with their audience. Collaborating with local influencers can result in better ROI and more authentic connections.

Influencer Engagement Rates

Example

Mamaearth collaborated with local influencers in different regions of India, which led to a more authentic reach and higher engagement, contributing to their rapid growth.

6. "Social Media is the Only Channel You Need"

The Advice

❌ Just focus on social media; it’s the only place you need to be ❌

The Reality

Depending entirely on a platform where algorithms change overnight and your reach can be throttled is a foolproof strategy, not. Relying solely on social media is a strategy fraught with risk. Diversifying your channels, including WhatsApp, email marketing, SEO, and content marketing, ensures you aren't at the mercy of social media whims.

Channel Performance Metrics

Example

Nykaa utilises a robust multi-channel strategy, incorporating WhatsApp, social media, email newsletters, SEO, and content marketing to ensure consistent customer engagement and growth. But hey, if you want to put all your eggs in one unstable basket, who are we to stop you?

7. "The Customer is Always Right"

The Advice

❌ Always bend over backwards for the customer, even if their demands are unreasonable ❌

The Reality

While customer satisfaction is crucial, it's important to set boundaries. Overextending to appease unreasonable requests can harm your business and morale. Establish clear policies and communicate them effectively to maintain a balance.

Example

Urban Ladder implemented a structured customer support policy, resulting in higher satisfaction rates and lower staff turnover, proving that clear boundaries are beneficial.

8. "Focus Only on Performance Marketing"

The Advice

❌ Allocate your entire marketing budget to performance marketing. Branding can wait ❌

The Reality

Branding builds trust and recognition, which are critical for long-term success. A mix of performance and brand marketing ensures sustained growth.

Marketing Budget Allocation

Example

boAt, the consumer electronics brand, invested in both performance marketing and brand-building campaigns. Their strong brand presence contributed significantly to their rapid growth and customer loyalty.

9. "Outsource Everything to Cut Costs"

The Advice

❌ Outsource all operations to minimise costs and focus only on core activities ❌

The Reality

While outsourcing can be cost-effective, it can also lead to quality control issues and misaligned priorities. Keeping key operations in-house ensures better control and consistency.

Outsourcing Impact

Example

Chumbak initially outsourced their manufacturing but faced quality issues. Bringing production in-house improved product quality and customer satisfaction.

10. "Rapid Expansion is Key to Success"

The Advice

❌ Expand quickly into as many markets as possible to dominate the industry ❌

The Reality

Because nothing could go wrong with spreading yourself too thin, right? Rapid expansion without a solid foundation can lead to operational challenges and resource strain. Sustainable growth with a focus on core markets ensures long-term success.

Expansion Impact

Example

Bewakoof expanded cautiously, focusing on building a strong brand and operational efficiency before entering new markets, ensuring stable growth.

11. "Ignore Data, Go with Your Gut"

The Advice

❌ Rely on instinct and experience rather than data analytics ❌

The Reality

Because who needs facts and figures when you have a gut feeling? Data-driven decisions lead to better outcomes. Ignoring data in favor of gut feelings can result in missed opportunities and misguided strategies.

Decision-Making Impact

Example

Zivame uses data analytics to understand customer preferences and optimise their product offerings, resulting in higher customer satisfaction and sales. But if you trust your gut over hard data, by all means, dive into the darkness.

That’s the end of our talk on “The Worst Advice for D2C Brands in India.”...

☕ See you on the next coffee date!

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