The D2C sector continues to make a lot of buzz in the industry. As per the latest report, the sector is expected to touch $100 billion by 2025. This entails a massive change in how a sector operates may be in terms of consumer engagement, and logistical and warehousing solutions, among others. So the question arises why the D2C sector has been growing so rapidly and whether is it sustainable in the long run?

Vivek Gupta, Co-Founder of meat delivery start-up and India’s first D2C unicorn Licious stated, “D2C is a very important thing. Indian consumer ecosystem has always been taken for granted. The Indian consumer is evolving very fast. So a lot of problem statements in India need Indian solutions and that is where D2C plays a very important role. That is why I feel the D2C ecosystem is here to stay.”

The need for providing ‘India-specific solutions’ is an actual thing. This is because many of the so-called products that are being brought to the Indian market as ‘innovation’ is in fact either an exact replica or an adaption of an already successful product in the external market. Hence, in order to understand the consumers and bring real innovation and real solutions which are specific to the Indian demography, the D2C model of business is ideal.

Solving The Real Problem

The fact the D2C sector is rapidly booming with new entrants surfacing every day in the market has created an aura of uncertainty in the sector. According to a report, there are over 800 D2C brands in India with 77 brands surfacing in 2021 alone. 

Abhay Hanjura, Co-Founder of Licious elaborated, “It is the question about every day a company can come or not. The question is whether these companies have a real differentiation in terms of technology, innovation, and supply chain. That’s what is really missing. People are not fundamentally trying to differentiate – they are like ‘behti ganga mein chalo haath dho lete hai’.”

“What these companies should do is solve the real problems. If the problems are artificial then only artificial problems will get built further. Build businesses on the right important metrics like consumer happiness, consumer repeat, unit economics, larger market, etc. For many niche businesses, D2C will be very costly and hard to build. Some of the ways in which Licious has created differentiation in the industry is by building a solid quality control in all its processes and by bringing innovation and technology,” Hanjura further stated.

Speaking about differentiation, the way Licious has been able to get an edge in the market is by setting the right quality standards and bringing in the innovation and technology that brought disruption in their industry.

“The fact that Licious owns every step of the way and every single gram of meat that’s sold on its platform is sourced, manufactured and quality checked and delivered by the brand itself. This was imperative because this is what the consumers deserved in the context of the category because the problem in the category was inconsistency and non-standardization. How do you solve that? What is a brand? The brand is one that offers a consistent and reliable experience repeatedly. You are not a brand if you don’t control that," Hanjura asserted.  

“Fundamentally we think technology is at the heart of the proposition itself – there is a reason why Licious is direct to consumers, why Licious is on the internet – because the internet makes the entire shopping experience super-efficient. So the way we look at the offline is the way it promotes the core Licious franchise,” Hanjura further stated.

The brand brings in quality at two levels: Quality check (QC) and Quality Assurance (QA). “We as an organization have matured from a QC to a QA system. Some of the systems we have are so advanced and matured from a food safety perspective,” the company stated. 

Bringing A Disruption

When you are building a brand, particularly if it is in the D2C line of business, bringing differentiation so much that it creates a sort of disruption in the industry is always favorable. Licious has actually done the same for the meat consumption industry.

In recent times, bringing convenience in not just getting the food delivered but delivered in a condition where it is easier to cook. The brand has really pressed the accelerator on its innovation as it has launched multiple categories around ready-to-cook and ready-to-eat segments. Today, 40 percent of its first-time users add a value-added product to their basket.

In India, per capita meat consumption is very low – 7 to 8 kgs a year. America’s per capita meat consumption is 112 kgs. For China, it is 62 kgs. So 80 percent of Indians are protein deficient. We are far away from reaching some stability and then declining. Per capita meat consumption is directly related to per capita income.

“If any such trend picks up in India, we will be the first one to provide that kind of solution to consumers. Because we understand meat really well, we will understand the alternative of meat replicas very well. Talks and data are very different,” concluded Gupta.