As the retail landscape continues to evolve, it’s crucial for retail executives and small business owners to stay informed about emerging business models. In this post, we’ll explore three key trends reshaping the industry: social commerce, video commerce, and direct-to-consumer (DTC) commerce. We have addressed the phenomenon of quick commerce in a separate post
The growth of newer models is
1. Social Commerce: Leveraging Social Networks for Sales
Social commerce is an innovative approach that blends social media with e-commerce, creating new channels for product discovery and purchase. This model takes three primary forms:
1.1 Influencer-Led Commerce
This approach utilizes social media influencers to promote and sell products directly to their followers. Platforms like Instagram and TikTok have become powerful tools for this type of marketing and sales.
1.2 Reseller Model
Platforms such as Flipkart’s Shopsy and Amazon’s Glowroad enable individuals to create product catalogs and sell through their personal networks. This model empowers entrepreneurs to start their own micro-businesses with minimal upfront investment.
1.3 Community Buying
This emerging trend involves groups of shoppers collectively making purchases, often to secure bulk discounts or share shipping costs.
2. Video Commerce: Bridging the Gap Between Online and Offline Shopping
Video commerce aims to recreate the physical shopping experience in a digital environment using technologies like virtual reality (VR) and the metaverse. While this model hasn’t gained significant traction in India yet, it holds potential for providing immersive shopping experiences that could revolutionize online retail.
3. Direct-to-Consumer (DTC) Commerce: Cutting Out the Middleman
DTC commerce involves brands selling products or services directly to consumers without intermediaries like retailers or wholesalers. This model has seen significant growth in India, with several successful examples such as Nykaa, Mamaearth, Lenskart, Sugar Cosmetics , Wakefit, The Sleep Comapny etc
Key features of successful DTC brands include:
- Co-creation with customers
- Cost-effectiveness
- Attractive and user-friendly websites
- Unique brand positioning
- Strong social media engagement
- Focus on innovation
- Unmet Needs
Market Potential
According to Mordor Intelligence, the Indian DTC market is expected to grow from its current size of $70 billion to $250 billion by 2030, with a compound annual growth rate (CAGR) of 25%. The beauty, personal care, and fashion sectors are likely to lead this growth.
Avendus Capital reports that there are already over 80 DTC brands in India’s beauty and personal care industry alone, with this number expected to increase rapidly in the coming years.
Implications for Traditional Retail
The rise of DTC brands poses a potential threat to traditional distribution and retail channels. By building direct relationships with customers and bypassing intermediaries, these brands can offer competitive pricing and create strong brand loyalty.
DTC companies leverage social media, content marketing, influencer collaborations, and targeted advertising to communicate their unique value propositions and enhance customer engagement.
Conclusion
As the retail landscape continues to evolve, it’s essential for businesses to adapt and consider how these emerging models might fit into their strategies. Kiranas can collaborate to explore elements of social commerce, preparing for the potential of video commerce, or considering DTC to build thier own brands, staying informed and agile will be key to success in the digital retail future.
We at Kiranmitr will be publishing more details in the coming weeks