Introduction

Since the outbreak, technical advancements have made the process of launching a new internet business easier than ever. This year in India, several direct-to-consumer (D2C) businesses have prospered because of Shopify, a Canadian e-commerce technology firm. Shopify India achieved profitability with a net profit margin of 5.4% and a sales increase of 66%.

Since the outbreak started, Shopify's customer base in India has been steadily expanding, with about 10,800 firms joining (in the first quarter of March 2020). A database for online stores called Store Leads now has over 31,000 active users. One out of every five of these stores continues to specialize in clothing brands, while 10% of them sell "beauty and fitness" items.

Back in 2020, Shopify had just unveiled its third-party app store and its network of Web designers who served as Shopify partners for potential customers. Direct-to-consumer brands were becoming increasingly common in India at the time, and Shopify was at the forefront of the trend. The primary focus of the company, according to Sandeep Komaravelly, national manager of Shopify India, will be on growing volume by enlisting new companies and earning subscription income.

As of fiscal year 21, the Indian branch earned significant profits by providing services to sister firms. The most significant source of income, however, was subscriptions.

What will Shopify do next?

A new frontier in online business registration is the hiring of entrepreneurs who don't necessarily serve affluent urban clients in one of the top eight to ten metro regions of the nation.

The majority of India's small and medium-sized businesses are run by modest family businesses, neighborhood groceries and Kirana shops, and local brands well-known in a particular area or small town (SMEs). They have started to understand the necessity of coming online two years after the epidemic. Shopify will be ecstatic. The bad news for business owners is that there are now a lot more options for them to grow their brands online.

Everyone wants a piece of India's enormous retail and consumer industry, which is largely unorganized and run by micro, small, and medium-sized businesses yet is ripe for the taking (MSMEs). Startups like Shopsy from Flipkart and Meesho from SoftBank entice small business owners to launch an online business by utilizing their networks to access resources. These wagers have grown to be significant ones.

For a new business just getting off the ground, Shopify offers less expensive options for selling its items online.

The alternative strategy for Shopify may be to expand into larger direct-to-consumer (D2C) businesses, especially because major conventional FMCG companies are still launching or acquiring their digital brands.

According to Store Leads statistics, several businesses, including Himalaya Wellness and Hindustan Unilever's Lakmé, currently operate on Shopify. However, several other businesses have developed the technology internally. According to statistics, companies including Clovia, Wildcraft, Bewakoof.com, LimeRoad, and Asian Paints have created D2C (direct-to-consumer) capabilities on a "custom cart" platform.

Growing e-commerce and digital brand sales through aggressive internal goals will be a big trend in FMCG in the future. By 2024, Marico's digital brand acquisitions are anticipated to grow to a $400–500 crore business unit.

Conclusion

India's direct-to-consumer ecosystem has emerged over the last two years as it has in a decade. The use of plug-and-play systems has transformed once-complex tasks such as developing a website and getting payment processing, acquiring logistical partners, and using several marketing channels into easy processes. Due to the current D2C trend, Shopify India should benefit from this.

Due to the entry of capital-rich FMCG businesses and the increased dealmaking activity generated by Thrasio and Thrasio-style roll-ups, new direct-to-consumer brands will emerge. There is however an increased level of competition for Shopify India than in the past. There are many competitors in India's retail and consumer industry, but some have well-funded companies that may be able to surpass local rivals due to their financial resources. For reading more such blogs, you can follow Dhannay.