Digital Native Brands: Rise Of DNBs In Digital Commerce Ecosystem

The total market of Digital Native Brands includes channels such as direct online channels, and online marketplaces and can also be extended to traditional offline stores. 

The number of DNB brands is rising in Indian digital commerce ecosystem.

Source : Getty

By Amit Relan

The Digital Native brands in the digital commerce ecosystem are the revolutionary force in the eCommerce arena. The changing consumer behaviour and extensive range of choices are the driving force behind the global expansion of the digital commerce landscape. Let’s dig a little deeper into the world of Digital Native Brands to understand where it stands and where it is heading in the future.

Interpreting The Evolving DNB Landscape

First, let’s clear the air on what a digital native brand means. It is simply a business that starts it selling its products or services online first either on its website or on the eCommerce marketplaces.  And its majority of sales come through online channels. They generally have an online distribution channel with no intermediaries involved between the manufacturer or brand and the final customer or consumer. The total market of Digital Native Brands includes channels such as direct online channels, and online marketplaces and can also be extended to traditional offline stores. 

Here are some key highlights of the DNBs market: 

• Growing at a CAGR of ~40 per cent, DNB market is a ~$12.3-billion opportunity in FY22 and is expected to reach ~$61-billion market by FY27.
• The direct online channel (DOC) market for traditional and DNBs is a ~$4.6 billion market in FY22. It is expected to grow at a CAGR of ~35 per cent and reach $22 billion by FY27.
• DNB brands are witnessing rapid growth and scale. Several brands have crossed Rs 100 crore in revenue, taking on average 4-5 years to reach this mark.

eCommerce market of $70 billion categories includes personal care, apparel, and footwear, grocery and gourmet, jewellery, electronics, health care, home décor, and household supplies has around estimated US$ 28 Billion out of which Traditional brands selling online holds market $17.5 billion. In comparison, DNBs stand strong at $10.5 billion. According to Industry reports by IBEF, Invest India, and 1Lattice. 

Growth Drivers For DNB Brands In India

The number of DNB brands is rising in Indian digital commerce Ecosystem, catering to a very distinct and unique market segment along with the traditional eCommerce market segment.  The key factors which drive DNB brands’ growth are:

Multiple avenues for advertising & promotion: Brands also focus on advertising their brands through influencers on social media catering to young audiences who love to follow their words leading to the rise of social commerce and live commerce platforms in the omnichannel sales ecosystem. The presence of multiple avenues for promotion has also immensely bolstered the reach of brands.

Identify white spaces: Innovative DNB brands are identifying market prospects in India's tier II & III cities.  Target untapped audiences and scale up their business thanks to the growing buying potential and smartphone penetration.

Technology-driven growth: With over 825 million internet subscribers in 2021, India is becoming one of the largest and fast-growing markets for digital consumers. This digital revolution is acting as a catalyst for growth for DNB brands as a majority of their sales are online. Various government schemes also help promote tech usage.
Personalisation: The demands of the customers are evolving as they are preferring customised products over ‘one for all’ products. DNB brands are utilising this opportunity by analysing customers’ data and their preferences to customise products.

Major Success Factors For DNB Brands

The key factors that contributed to brand success include:

Brand awareness: Creating brand presence & visibility online through appealing marketing, customer interaction & social media engagement. High focus on quality content-oriented marketing, SEO services and digital advertisements. Influencers helping the new DNB brands reach out to wider shoppers' demographics on social media.

User interface/experience & content: Appealing website U/ UX to attract more prospects. It makes Compelling taglines and descriptions. Usage of tech tools (website building, etc.) Promo codes with a brand name or campaign to drive recall.

Omnichannel approach: The Focus is on a multi-channel approach to provide multiple touch points. Marketplace to increase brand recognition and reduce customer acquisition costs.

Adapting to new trends: Keeping up with up-and-coming trends and customer spending habits. Personalisation, health-conscious products, and sustainable packaging are some trends DNB brands are focusing on.

Innovation: Bridging gaps across consumer needs focusing on innovation & creating a unique product or service to make the brand stand out. Identifying the gaps in different product categories and bridging them. Quickly integrate customer feedback in products or services.

The rise of DNBs in India has brought about a significant transformation in the retail industry. As consumers increasingly embrace the convenience, value, and personalised experiences offered by DNB brands. This trend is here to stay. Brands need to keep a close eye on the competition and market trends to maintain or achieve pole position in the fiercely competitive eCommerce landscape. As the retail landscape in India will continue to evolve, with the digitally native brands leading the way in innovation, and optimising customer experience.

(The author is the CEO & Co-Founder of mFilterIt)

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