D2C brands are preparing for the next 200 million internet shoppers

Online shoppers

The current base of internet shoppers is likely to double to 400 million in the next 5-7 years, according to investors' estimations. However, catering to the next wave of shoppers, a majority of who will be the Gen Z population, will require D2C (direct-to-consumer) startups to make products that are healthier, have a more appealing packaging or can be used multiple times.

The new breed of shoppers is more aware of the ingredients in their food packets because they're health conscious, as per PC Musthafa, CEO at iD Fresh Food, who was part of a panel at the Moneycontrol Startup Conclave on July 7, 2023, along with Meghana Narayan, co-founder, Wholsum Foods, Gaurav Singh Kushwaha, founder of BlueStone and Sibabrata Das, co-founder of Atomberg.

“We were developing a new product - tender coconut. When I asked my son to taste it and he did, he told me that he wouldn't buy this product because it’s not hygienic and has fibre left at the bottom," Musthafa told Moneycontrol.

“I had never thought from that perspective; I always felt my products were very hygienic. But now, it is important for me to know what the Gen Z population thinks. I have to improve my products to make them more appealing,” the CEO of the batter-to-bread maker added.

Speaking about the pricing and quality, Meghana Narayan of Wholsum Foods believes that Indian consumers are fully ready to pay a premium on their purchases. However, the premium depends on how much value the product adds.

"Indian consumers are value-conscious more than price-conscious,” said Narayan, the CEO of Wholsum Foods which makes millet-based food items and more.

(Left to right) Dipanjan Basu, co-founder, Fireside Ventures. Meghana Narayan, co-founder, Wholsum Foods, PC Musthafa, CEO at iD Fresh Food, Gaurav Singh Kushwaha, founder, BlueStone and Sibabrata Das, co-founder, Atomberg

Changing shopping patterns are not just limited to the food industry. Lifestyle startups, too, are seeing a shift in consumer behaviour.

Shoppers from the younger population are buying jewellery that is different from what people were purchasing earlier, as per BlueStone’s Kushwaha.

“Some years ago, 80-90 percent of the jewellery shopping revolved only around weddings and big events. This has shifted to 50-50, where 50 percent share stands with the wedding jewellery while the rest accounts for casual jewellery,” Kushwaha said.

The idea is to buy jewellery that costs lesser and can be worn on an everyday basis, rather than buying high-value items that can be used only during the wedding and then put away. That also ensures there are more repeat purchases and higher chances of referrals, he added.

The shift in preference totaled to about $30 billion in a market which is $80 billion in size, according to his calculations.

Looking back

Asked what each founder would do differently in hindsight, Musthafa from iD said that he was late in forming a professional management team and would choose to do that sooner if given the chance.

Narayan from Wholsum Foods said her company should have begun as an online-first company and then embarked on the omnichannel journey a few years later, and should have not tapped into both channels at the same time from the very beginning. On the contrary, Kushwaha from BlueStone said his company should have opened offline channels sooner than it did, along with an online presence.

And lastly, Atomberg’s Das said he would have raised capital earlier in his company’s journey because it would give his company a clear edge over traditional players like Crompton, Orpat, Havells etc. Atomberg was founded in 2012 and was bootstrapped for the initial 3-4 years.