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The survey released on Wednesday added that only 12% of the D2C businesses have reported being profitable, while 25% of the D2C businesses said that they don’t measure profitability since they are part of larger ecosystems.
Publicis Groupe CEO for South Asia, Anupriya Acharya said ecommerce is the fastest-growing segment for the company as the number of shoppers increases and consumer spending on e-commerce grows.Acharya said that the D2C Toolkit Advantage report has been launched since commerce has become one of the most important agendas for clients.
“A lot of our clients are seeking our expertise for their D2C strategy. Many of our clients have traditional infrastructure. They have moved to marketplaces, and now they want to move into D2C,” she added.
D2C is gaining prominence as an ecommerce channel with 43% of e-commerce funding in 2022 going to these businesses, overtaking marketplaces as the most funded e-commerce sub-sector.
Performics India CEO Lalatendu Das said very few companies have cracked the code to run a profitable D2C business due to high customer acquisition costs, unclear return on investment, and operational complexity.“Our survey shows that nearly 80% of D2C businesses are yet to attain profitability. About 12% of them are profitable, 63% are not profitable at all, and 25% said the D2C business is part of a bigger ecosystem, therefore they don’t measure profitability,” he noted.
Das mentioned that profitable D2C ventures are doing four things right.
“If these four things are done right, you are looking at an operating profit of roughly 8%,” he said.
This includes investing in consumer insights and using them in multiple ways to drive sales, collecting first-party data to understand consumers better, driving brand affinity, and driving product innovation based on consumer insights.
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