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22 February 2022, Mumbai:
The current D2C market in India is being driven by Gen Next enterpreneurs who are inspiring traditional conglomerates with their New Age approach.
Tata and Reliance have already announced plans to launch super apps while the Aditya Birla Group has decided to increase focus on the D2C and e-commerce space.
Aditya Birla Fashion and Retail (ABFRL) recently announced plans to set up a new subsidiary for building a portfolio of New Age, digital brands (D2C) across fashion, beauty and allied lifestyle segments.
To be known as the House of Brands, the initiative will help it align itself with evolving markets, says an Inc4 report. ABFRL will join startups such as Globalbees to build a new brand portfolio, says Ashish Dikshit, Managing Director, ABFRL.
New Age consumers in focus
Many of these brands may not be able to expand their operations in digital space. Yet, they can leverage ABFRL’s tradition, experience and network by acquiring a plethora of brands like the company.
They also plan to help ABFRL grow its brand portfolio by investing in other selective brands, adds Dikhshit.
ALSO READ: Aditya Birla Fashion and Retail (ABFRL): To consolidate D2C play eyes at multiple digitally native brands
The House of Brands business of Aditya Birla Fashion subsidiary will initially include 8 to 10 brands acquired through own capital. These small companies will have the required potential to become large brands over the next 5-10 years.
E-commerce majors take to D2C
With an expected market size of $100 million by 2026, D2C brands are expected to be the biggest drivers of retail market. In 2021, these brands clinched around 174 deals to raise $1.81 billion capital. This not only resulted in the creation of thousands of new brands but also gave enablers and digital sellers new growth opportunities by launching new disruptive models such as ecommerce roll-ups, houses of brands, etc.
The first D2C Fulfilled by Amazon (FBA) brand was acquired by US-based Thrasio. The concept was later popularized by other models set up by Nykaa, GlobalBees, Mensa Brands, etc.
In 2022, Mensa Brands acquired Florona and TrustBasket.
Last January, Amazon India also introduced the Amazon Global Selling Propel (AGSP) Accelerator with around 10 startups.
Best products at affordable rates
Through its D2C foray, Aditya Birla Fashion aims to become not just a marketplace or a platform for brands but also facilitate brand-building and provide consumers with the best products at affordable prices.
The brands recently acquired by ABRFL for its D2C foray have already raised investments worth millions from VCs.
The company plans to use these funds for expansion over the next 12-18 months. It will raise external funds once it manages to scale up its D2C operations.
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