As per a report by Statista, the number of overall direct-to-consumer (D2C) brands in India is likely to increase to 200,000 to 250,000 in 2025. HRX, Faballey, Zivame, Clovia, Indya, Hopscotch, Chimp, Bewakoof.com, The Bear House are a few examples that show how D2C brands are growing in the market. On the other hand, there are thousands of emerging D2C brands that are creating their own space and are on their toes for success.
The popularity of these evolving D2C brands is continuously growing as they are making huge efforts, be it through their thrust on fresh designs and colour palettes, an understanding of global trends and size-inclusive clothing, their extra efforts for customer satisfaction by focusing on community building and more engagement with the customers, wanting to make them feel special.
Most of the emerging D2C brands have smaller production batches and believe in nearshoring, while for many, the focus is on organic/eco-friendly fabric, recycled or other such options that add value and make them the customers’ favourite. These brands mostly pick a niche category and perfect it before moving on to new product categories, so in this entire scenario, their sourcing becomes highly critical as all the above-mentioned efforts serve the purpose only when these brands have their sourcing in place. However, it is a known fact that new, small brands face plenty of challenges in this regard as sourcing itself is a complicated process. Here are a few of the observations about how D2C brands can overcome these challenges.
For emerging D2C brands, challenges can be related to their knowledge, product specification, network and scale of business. Like in the initial stage, they struggle to find and connect with good vendors, once anyhow they get vendors and start working with them, there are issues like timely availability of raw material, higher costing, lack of enough support for innovation, product development ensuring quality and delivery as per planning. Constantly exploring, developing new vendors and ensuring maximum use of latest technology, supporting each other wherever possible, nearshoring and working on consistent basis are a few of the solutions that ensure smooth sourcing.
(D2C), or digital-first brands, leverage the internet to sell directly, unlike traditional distribution network of wholesalers, stockists and retailers.
Develop vendors, manage reference
No doubt, normally the apparel manufacturers that have a good scale of operations don’t entertain the small order quantities/queries of D2C brands. In such cases, reference of industry professionals can help and a few of the brands are already working on the same.
Developing small but committed vendors can be a good option for D2C brands as such vendors need handholding in terms of orders, guidance to run business and allied issues. Brands can help them to make standard operating procedure (SOP) to improve their working and develop a long-term relationship. Few of the brands have vendors which have grown with their support only. As most of the small factories are not cash-rich, payment to them on time by the D2C brands will be a positive step.
There are many such important areas where emerging brands and their suppliers can support each other to create a win-win for all. Experienced vendors can support the emerging brands with their experience and learnings about product, market, sourcing and manufacturing aspects as many D2C brands have limited knowledge and learning.
Offering a wide range of menswear and womenswear in a variety of fabric base, Bengaluru-based Styched is one of the largest online youth fashion brands of India. It focuses on regular fortnightly and monthly connects to understand specs better, quality and rate scorecards and works closely with its suppliers on forecasting at a bi-weekly level to plan fabric lot types. More importantly, there is knowledge sharing on new fabric development, upcoming trends which customers are preferring, which helps suppliers in their sourcing.
Price is a big issue in apparel products and in case of small order quantity, the cost increases. So most of the brands offer extra price for smaller orders as they know the amount of efforts suppliers have to put in to cater to small orders.
As per Niket Lulla, Founder, Pop Station (which works with 40 D2C brands and supports these brands from design to delivery, to overcome price challenges in sourcing), a simple solution is to develop a long-term and consistent supply chain rather than jumping to new vendors for little price comfort. And paying higher price for smaller orders should not be a major concern for D2C brands as suppliers put in extra efforts for such orders.
Small but strong team
No doubt, D2C brands have limited resources and few of them have limited knowledge too but having a small and good team definitely can be a good advantage for brands as well as for their suppliers too. Harsh Somaiya, Co-founder, The Bear House firmly believes that if a strong team is there, most of the challenges can be sorted out. According to him, having services of freelance professionals is another option to add value as it will not be of high cost compared to hiring a full-time expert team member. The Bear House is one of the fastest-growing menswear brands in the country and is associated with six factories to source its products.
Fabric availability can be managed
As most of the D2C brands have thrust on innovation, niche offering, product development, they want to explore all possibilities including suppliers which can support them. This will help them to have a good pipeline of ready vendors and agile network. Developing products according to the available fabric or necessary changes in the existing fabric is what the D2C brands do to ensure easy and timely availability of fabrics.
“We have worked very closely with a large number of small to mid-size suppliers to make them understand our requirement, do trials to iterate specs and also ensure aggregate volume over a month yet smaller lots in a week,” informed Durga Madhab Dash, COO, Styched.
He further stated, “For the latest dyeing process for all our fabrics, we work very closely to develop GOTS-certified cotton and knitted types from Ludhiana, Tirupur to Surat, warp/weft types which provide more durability and flexibility and long-time suppliers also interact with brand’s merchandisers for knowledge exchange.”
Styched has a network of more than 75 fabric suppliers and most of them are small to mid-sized which have grown with the brand and distributors which have developed vertical integration capacity over the last three years with Styched, employing 100 to 500 workers at their backend.
|D2C market size
Apparel and footwear:
FY ’27 (p): US $ 14.19 billion
Suggesting way out for Trims
With some specific product categories like evening dresses with handwork and swimwear, there are challenges for trims availability too. Like Akash Mishra, Tanned Curves, Mumbai is on his toes to promote his swimwear brand and is also associated with a leading swimwear manufacturer/ exporter. “As I need quality trims from Indian design perspective, I am forced to depend on imported trims only. So far the Indian suppliers approached by me normally don’t offer high-quality trims and there are price issues too,” said Akash. Even for fabric, he depends on import as he is using Carvico Malaga fabric for swimwear.
Shoaib Malik, Mercury India Exports, Delhi having in-house manufacturing of high fashion evening dresses also has issue with trims in case of small orders. “We have to buy a certain quantity of beads, especially those we use for handwork, and in most cases, the remaining beads can’t be used for other dresses due to design element. It is an added cost for us.”
To overcome this issue, Shoaib suggests the available beads for smaller orders and in some cases, brands looking for small orders try to use the available beads.
Brands having reasonably good scale of operations also face issue of trims sourcing as in some garments, they have very limited use of trims and they use exclusive designs of the same in their products. In such conditions, brands order a reasonable size of trims and use them over a period of time and plan their designs accordingly.
Quality and delivery issues
Some of the D2C brands that are in the initial stage are struggling to find a good quality product and there are examples where the final product is not as per the sample and they feel helpless due to vendors’ limitation to deliver as per the commitments. Most of the small vendors often remain reluctant for testing and certifications which also add to the worry of such D2C brands. The solution in this scenario is to work with committed vendors and be very particular about the desired quality. Better communication and support between suppliers and brands can also be of help to avoid such issues.
Sourcing challenges also include larger lead times to produce finished products and ship to customers, delay (in few cases 2 to 3 times more) in new design development and to cater faster to changing customer needs where customers prefer more personalisation and comfort in youth fashionwear.
Ensuring use of latest technology
Brands should prefer to ensure maximum use of technology and work with vendors which have state-of-the-art units or maximum in-house processes and completely data-driven approach. Few of the D2C brands are following AI as their AI-driven backend predictively forecasts requirements for the upcoming week, and the SKU level predictions, which help reduce inventory costs, wastage and keeps production agile.
Harsh gives a good example saying that depending on the need and scale of business, the use of ERR is not a big issue, especially from the cost point of view and it really helps vendors and D2C brands in smooth execution of orders. There are various apps also that can help in this regard.
More adaptability now
Overall developments in apparel business, even those that have nothing to do with the Indian D2C business, are also impacting the sourcing in this segment. As opportunities in export business have not increased last year, some of the apparel exporters have started working with D2C brands while earlier they were reluctant for the same.
Agreeing with this, Niket said, “I have seen a lot of adaptability in the supply chain as unlike earlier, few of the bigger manufacturers are now doing the same.”