Daalchini Technologies organized a webinar on ‘D2C Brands’ dilemma: LUP (“the Chota Pack”)- a Supply-chain laggard or a Customer-acquisition engine?’ today. Prerna Kalra, Co-founder and CEO of Daalchini Technologies
At the webinar, the panellists shed lights on the below mentioned key points:
· How low-unit packs drive sales,
· sales challenges for chota-pack for D2C brands,
· out-of-box strategies with LUPs and
· Intelligent Retail & LUP for sustainable supply-chain and customer growth.
Key insights: Why LUPs?
Low unit Packs or Chhota Packet is quite popular in metros as well as rural areas. Even during the Economic Slowdown, these packs experience a higher growth rate as compared to other packs. This encourages the brands to focus on Low Unit Packs. With LPUs, they offer a trial of products and then convert consumers into higher SKUs subsequently. While acquiring retailers sensitive to Working Capital.
A report by Avendus has revealed that India is one of the largest retail markets in the world, which is expected to surpass $1.7 Tn by 2025. India is also seeing the growth trajectory of D2C brands across categories and is likely to become a USD 100 Bn addressable market by 2025. This demonstrates the growth potential of D2C brands driven by the growth in millennial population, evolving consumer needs and changes in dietary preferences.
Driven by the growth of small sizes packets, manufacturers and D2C brand owners have been coming up with deals of innovative sizes and prices to accelerate the sales. The panellists discussed that Low-unit packs (LUPs) can be sustainably retailed by leveraging the technology in order to entice the customers.
Key Highlights of the Webinar & Case-study of Daalchini’s in-house brand survey:
Supply chain challenges reduce the brands likelihood to sell LUPs through select distribution. Daalchini’s survey highlighted that a pure digital distribution have lesser likelihood of selling LUPs as compared to Intelligent Retail.
Specifically for F&B Industry, Logistic Cost per Volume and Margin per Volume, became the key cited reasons for likelihood of brands selling via own websites and e-commerce vs. intelligent retail. 83% of total participating brands highlighted the ability to sell a LUPs via Intelligent Retail is one of the drivers to select it as a Channel.
As per an in-house survey by Daalchini with responses from 250+ D2C brands, 58% of brands found difficult to or lesser likelihood of selling LUPs via their own website while 53% find it difficult or unsustainable sale via e-commerce hence they sold bundle packs.
Daalchini’s in-house survey revealed the same, highlighting the robust growth potential of intelligent retail as it enables the D2C brands to make data-driven product and merchandising decisions with valuable consumer insights.
Prerna Kalra, Co-Founder & CEO of Daalchini Technologies stated, “Brands who sell directly to the consumers (D2C) have been witnessing a tremendous growth over the last couple of years as they cut out the middleman’s role and reach out to the customers directly and faster. In India, the direct-to-consumer marketplace has been growing exponentially across categories including food retail, FMCG, healthcare, personal care and others.”
“Aimed at recognizing the potential of LUPs, we intend to discuss on the subject matter with the industry experts in order to drive conversation.”
Vidya Bhushan, Co-Founder & COO of Daalchini Technologies stated “The pandemic has accelerated the online traction and direct connection with brands. Leading food retail brands are also adding direct-to-consumer model to their distribution channels to target a wider consumer base. Owing to the access to customer data, D2C brands get to leverage consumers’ consumption insights, their feedback to address their needs.”
“We will continue to focus on coming up with new ways to reach out to the wider base of consumers to drive industry growth”
Daalchini already has 610+ smart stores in 14 cities and more than 1.6 lakh Monthly-active-users. It also has 200+ franchises and 65+ brands and Cloud Kitchens selling on its platform.
Since its inception in 2017, Daalchini has also deployed the smart vending machines hospitals, manufacturing plants, office, co-living spaces and educational institutes. With this new-age sustainable high-growth potential business model, Daalchini has $2 Million Annual Revenue Run Rate and has Achieved Operational EBITA positive in Q2 FY22.