“D2C market in India is poised to become a $100 bn addressable market by 2025”

Adgully is back with a new edition of its annual feature – TRENDING NOW – where we present the strategies and views of a cross-section of industry leaders as they go about reclaiming lost time and market opportunities and build for a stronger future, armed with the lessons of the pandemic period.

Over the next few weeks, Trending Now will bring insights from industry leaders on how their organisations are gearing up to seize the opportunities in 2022, break through the Covid disruptions and find growth and remain resilient.

In conversation with Adgully, Chaitanya Ramalingegowda, Director & Co-Founder, Wakefit.co, speaks about the growth in the D2C market sector in 2022, the factor contributing to this growth, how the pandemic spurred growth in the home solutions market, and more.

What are the trends that you expect to dominate in your sector in 2022?

The D2C market in India has been buoyant, thanks to several success stories of start-ups, and the sector is poised to become a $100 billion addressable market by 2025. The pandemic has accentuated the need for the D2C way of doing business. This has contributed to the emergence of horizontal and vertical e-commerce players, social media marketing, plug-and-play supply chain, and logistics options. The growth of the digital infrastructure and the widespread adoption of D2C brands, especially among Tier 2 and 3 cities, seems to be the biggest trend that has emerged in the last couple of years.

As per reports, the Indian furniture market is anticipated to achieve a Y-o-Y growth rate of 14.3% in 2023, as compared to the previous year. With more people working from home, products such as sofas, work desks, wall shelves, bookshelves, coffee tables, dining tables, wardrobes, etc., have witnessed an increased demand and this has worked well for us, following our foray into the home solutions segment.

The home solutions market is ripe for disruption and will likely see an increase in the number of organised players in the segment. At Wakefit.co, our endeavour has been to cater to the ever-evolving consumer demands in the most intuitive and cost-effective manner. Ergonomic home solutions, including furniture, bed spaces, and sleep solutions have become important priorities for consumers. We are aiming to cater to this dynamic demand through robust back-end integration and our research and innovation focus.

 What are the challenges and new opportunities that you see emerging in the year ahead?

With the onset of the pandemic, the supply chains were disrupted, resulting in logistical backlogs across several sectors. However, with time the bottlenecks have been identified and companies are now integrating technology to ensure business continuity. At Wakefit.co, we were able to address this by implementing AI technology and using predictive forecasting models to streamline front and back-end operations.

We have also witnessed a shift in the buying behaviour of consumers today. The migration of the Indian workforce to their hometowns during the first and second waves of the pandemic has resulted in faster digital adoption in non-metro cities. This has helped customers from these regions avail home solutions, essentials, and wellness products and services online. Better connectivity has also contributed to the growing demand from non-metro regions.

For instance, the demand for Wakefit.co products in non-metros rose from 30% to 45% since the pandemic began. Given our steady growth, we believe this is the right time to target Tier 2 and 3 markets aggressively. Strategic collaborations with multiple logistics partners have enabled us to deliver across 19,000+ pincodes in the country so far and are helping us grow our brand further in these micro-markets. We aim to bolster our presence in these markets by enhancing our robust distribution and delivery system, thereby increasing the demand to 50% from these regions alone.

How strong will this sector’s growth be compared to the last two years as well as the pre-Covid period?

As per reports, online spending in India is expected to reach $200 billion from $39 billion over the next 5 years. Therefore, the D2C segment is bound to enhance the customer experience, to cater to this market opportunity. We believe technology will play a pivotal role in developing the market and helping businesses reach remote areas of the country.

More and more Indians today are looking to enhance their homes by upgrading them with more functional features. This will create the necessary demand to aid the sector’s growth. At Wakefit.co, we largely focus on offering our customers world-class quality at affordable rates. With our backend integration, we are able to manufacture most of our products in-house ruling out the involvement of middlemen, thereby ensuring high-quality products at fair prices. As a D2C brand, we have witnessed a Y-o-Y growth of 2.5x to 3x every year. We ended FY2021 at Rs 416 crore in revenue and have set a target of Rs 700 crore for FY2022.

We are in the process of bolstering our manufacturing facilities and expanding our product lines to further our vision of being the most loved home solutions brand in India. We are bullish on the next couple of years generating exponential growth, as we continue to remain focused on our omnichannel expansion plans, supply chain and logistics management, technological enhancement, and superior customer experience.