D2C Enablement is the next Fintech 🚀
Deep dive into some of the SaaS companies in D2C space, and industry trends.
We’re back again! 👋
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Now, back to our story 🤗
D2C has been a buzzword in the start-up space in the last few years. Brands like boAt, Lenskart, and Mamaearth touching ₹500 crores annual revenue mark in one-tenth the time as traditional legacy brands, prove that it is no longer a fledgling industry and is here to stay.
But building a D2C brand ain’t as sexy as it used to be. It's true, a lot has changed in the last few years. With new brands popping up every day in this space, it has become increasingly difficult to stand out. CACs are through the roof (almost 3X of what they used to be a few years back) and amidst the funding winter, several brands have shut shop since they could not raise more capital.
Leveraging technology for growth 📈
Well, the good news is that the overall industry has matured. Conversations in the D2C space have now shifted from valuations to profitability and business owners are realizing that it’s not just about building an online brand but creating a sustainable business with tangible revenues and profits.
There are two key drivers when it comes to driving profitability:
✅ Increasing revenue
✅ Reducing operating costs
Both can be solved by using technology 💡
Technology can be the biggest growth driver in this industry and with each passing year, it will continue to change how consumer businesses are run.
Here’s what our favorite shark Peyush Bansal, the CEO & Co-founder of Lenskart had to say about technology in the consumer business.
Many D2C brands are turning to SaaS-based solutions to manage their business, and this trend is like to continue. Rightly so, as SaaS solutions are fast, affordable, and scalable. With the help of SaaS solutions, companies can automate their processes and save on costs. They allow companies to focus more on growth instead of spending time managing technology infrastructure. From CRM and marketing automation to payment processing and inventory management, SaaS solutions are changing how companies operate and grow.
Rise of SaaS in D2C 🚀
We take a look at some of the leading SaaS companies in India that are making strides in the D2C (retail) space and how their business has grown in the last 2-3 years.
Shopify 🛍
The OG SaaS in D2C, Shopify has been the go-to platform for consumer brands to set up an online store and sell products at scale. Since its launch in 2006, Shopify has helped more than 3.9M merchants build their online stores and manage everything from inventory to sales. With its native app store that provides everything from SEO tools to payment processors, business owners can build their online store with easy-to-use customizable templates without having to hire developers or designers.
The company is currently valued at $41 billion and clocked more than $4.6 billion in revenue in 2021 and it has been consistently growing post-pandemic.
Did you know that Shopify processes more than $307 billion worth of sales every year? And their gross merchant volumes are on track to surpass Amazon in the next couple of years.
Shopify competes with other ecommerce platforms like BigCommerce, Magento, and WooCommerce. Even homegrown Kirana-tech companies such as Dukaan have pivoted their business models to compete against Shopify in India.
Here's an interesting article by Morning Context on how Dukaan wants a piece of the growing D2C SaaS market in India: Dukaan wants to be a real SaaS company
The founder has openly criticized Shopify multiple times on Twitter, claiming that it suffers from serious performance issues and how Dukaan is solving for D2C brands.
You miss 100% of the shots you don't take, ehh Suumit? 😂
Razorpay 💳
What started as a simple payment gateway for merchants to accept & process payments digitally back in 2013, has now become one of the most valuable fintech startups in India. Today, it facilitates more than $60 billion in payment volumes (that’s like 4X credit card transaction volume at offline retail POS) and has over 8M merchants on its platform.
It also offers a suite of financial services such as debit cards, savings accounts, and insurance along with payroll management & tax invoice services for SMBs.
Razorpay is currently valued at $7.5 billion and is backed by Sequoia, Google Capital, Tiger Global, and Matrix Partners among others. It has also expanded outside India and is now present in other emerging markets such as Southeast Asia, Latin America, and Africa.
Will it be India's answer to the US-based behemoth Stripe? Only time will tell.
Shiprocket 📦
Recently turned unicorn Shiprocket has been making strides lately with a series of acquisitions including its competitor Pickrr & other logistic SaaS companies. It initially started as a 3PL logistic aggregator and now evolved into a SaaS platform offering a full suite of delivery solutions across the country, including last-mile deliveries and warehouse management services. Even payments!
The truth is India’s D2C fairytale is built on robust logistic infrastructure and Shiprocket is at the forefront of this movement. The company currently has operations in 100+ cities and handles over 25 million shipments every month for all major D2C brands in the country. And it’s just getting started.
What’s the future going to look like? 🔮
As D2C brands in India continue to grow at unprecedented speed, the biggest beneficiaries will be SaaS companies serving these clients. With the government’s efforts to digitize and build an infrastructure conducive to ecommerce, the retail SaaS sector will likely continue to thrive.
That’s it for now folks!
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