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D2C Pulse is a newsletter written by the team at GlobalBees, curating happenings in the direct-to-consumer ecosystem of India.

As the mercury soars this sweltering summer, it is not just the temperature that is hot. The hotly contested Indian e-commerce sector is going to be a 3 horse race according to a report by brokerage firm Bernstein.

The report says that Flipkart, Amazon and Reliance Industries which currently hold nearly 70% of the market are expected to dominate 90% of the share in the coming years.

🗞️Marketplace Updates

• Ajio has recently launched Ajio Street (Meesho competitor?). The platform boasts a vast selection of clothing and accessories, starting from a price point as low as Rs. 199. The roll-out of Ajio Street coincides with a confirmation from Shein, a dominant player in the global budget fashion market hailing from China, that it has partnered with Reliance to reestablish a presence in the lucrative Indian market. Interesting times in the Reliance stable. Watch out Meesho!

• All Hail the King: Brace yourselves for an exciting collaboration as Bollywood superstar King Khan steps into the limelight as the charismatic face of Myntra's much-awaited "End of Reason Sale." With this groundbreaking partnership, Myntra aims to set new records in the online retail space, offering irresistible discounts and exclusive deals on fashion and lifestyle products. Khan's legendary charm and mass appeal are set to captivate audiences, elevating the sale to extraordinary heights and ensuring a shopping extravaganza like never before.

• The Makeover: Nykaa's latest Q4 results have left analysts optimistic about the company's future, albeit with a twist. The highlight of Nykaa’s Q4 earnings was a sequential improvement in the EBITDA margin which improved 3 basis points quarter-on-quarter (QoQ) to 5.4%. However PAT fell by 71.83% YoY. While analysts maintain their bullish stance on Nykaa, they have lowered the target price 😕. The company said improvement in its numbers can be attributed to cost-cutting in fulfilment and marketing expenses.

• ONDC Magic: Magicpin is the dark horse ( note to self: no more horsing around with horse puns for the rest of this post ) in the ONDC game. With a strong presence in the food sector, Magicpin claims to have a network of 250,000 brands and retail stores. Paytm brought in Magicpin as a Technology Service Provider and embedded its user interface for its food vertical and simultaneously launched targeted marketing campaigns to capture the momentum. Consequently, ONDC saw orders grow an impressive 100-fold in the past month, surpassing its June target by reaching a daily order volume of about 20,000-25,000 ahead of schedule in mid-May.

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🍕D2C Bites

• Kidswear D2C brand Hopscotch raises $20 million led by Amazon. Mumbai-based D2C store Hopscotch sells kids’ clothes, footwear, and accessories in India, catering to style-conscious parents. Founded in 2015, Hopscotch competes against the likes of FirstCry, Babyhug and LuvLap with its wide collection of kids’ fashion wear and accessories. Hopscotch plans to deploy fresh funds to expand its offerings and reach with the latest trends in the kids’ fashion category. To date, the startup has raised $71 million.

• Ice Cream Summer: In a deliciously exciting turn of events, ice cream and QSR brand NIC has secured mouthwatering funding. This investment is set to fuel NIC's expansion plans and delight taste buds across the nation. With a vision of becoming the go-to ice cream destination, NIC aims to captivate ice cream lovers with its irresistible flavors and unique experiences. Backed by Jungle Ventures, NIC is ready to scoop up success in the competitive frozen dessert market, leaving a trail of smiles and satisfied cravings in its wake.

• Rising like a phoenix, D2C brand Souled Store is soaring to greater heights after sinking in huge losses in FY22. After realizing growth and profitability could go hand in hand, the founders reduced aggressive marketing and huge discounts to boost the startup's growth by 70-80% in FY23. The founder has claimed a 2% positive EBITDA margin for FY23, while the startup eyes a 15% EBITDA margin for FY24.

• Paperboat surpassed Rs 330 crore in revenue in FY22 while continuing to trim losses. The company claims that to have crossed Rs 600 crore revenue milestone in the fiscal year ending March 2023. Founded by former Coca-Cola executives Neeraj Kakkar and Niraj Biyani, Paper Boat sells packaged juices, coconut water, traditional Indian snacks, and dry fruits. The sale of juices accounted for 95% of the operating revenue in FY22. The company has been around for over a decade selling its packaged juices with nostalgic stories, and in the last few financial years, PaperBoat has consistently trimmed its losses, which is a great sign for the D2C brand.

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Brands that caught our eyes 👀

🌈Nostalgia Chroma

Speaking of nostalgia, Thela Gaadi, a direct-to-consumer (D2C) brand specializing in socks, is making bold moves by tapping into the power of nostalgia. With a vibrant range of products that evoke fond memories, ranging from tote bags and boxer shorts to handkerchiefs and eye masks, this innovative startup is set on a mission to double its revenue in the fiscal year 2024.
Thela Gaadi's socks, inspired by the charm of yesteryears, have struck a chord with customers seeking a dash of nostalgia and a pop of colour in their everyday lives. With its sights set on expansion and innovation, Thela Gaadi is paving the way for a nostalgic revolution in the world of fashion and personal expression.

Reads and Recommendations 📚

• Here are some ideas on how to plan your Instagram Layout

• LVMH and H&M are among a group of companies piloting a new framework for how businesses can protect nature. Check out the Big Brands’ mantra for sustainability.

• Paid advertising on Google, Facebook and other platforms no longer provide as clear a path to growth for direct-to-consumer brands as they once did. So how does one build a challenger D2C Brand?

• If only QR Code search interest was a stock chart.

That’s all for this week! Bye!

Stay tuned for more.

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