CRED Rides D2C Wave With New Store, And Here’s Why Brands Are In Line
Kunal Shah, one of India’s B2C unicorns, which ranks as a fintech startup, began by giving out reward points to credit card users. He recently started peer-to-peer lending, and now – he even has a store.
âWith the store, we are creating an entertaining first shopping experience where members can try new products, which are filtered for quality at member-exclusive prices,â said a spokesperson for CRED, in a detailed questionnaire shared through Your story.
CRED, which is only used by credit card users, i.e. the nation’s luxury shopping population, has direct-to-consumer (D2C) startups lining up to access to the country’s latest digital platform.
With CRED’s platform, D2C brands are eager not only to reach high-end customers – who are most likely to buy their products at a premium price – but also to create brand visibility. The chic design of the fintech platform, grouping products by categories and star brands, offers them differentiated visibility.
CRED currently sells over 2,000 products in the areas of personal care, electronics,
and grooming, among other categories. Image credit: YourStory Design
Currently, more than 400 brands are on the CRED store waiting list, waiting to be loaded onto the store platform. The company also sells other luxury brands, including Bulgari and Tommy Hilfiger.
Digital brands, including skin care brandsand Dot and Key, electronic reader , premium coffee brand Blue Tokai Coffee Roasters and men’s grooming brand Bombay Shaving Company are among the 500 brands referenced on the store.
CRED currently sells over 2,000 products in personal care, electronics and grooming, among other categories.
The pandemic propeller
The pandemic epidemic and the resulting lockdowns and quarantines have seen many homebound and bored consumers resorting to online shopping, and how!
While the D2C brands, which already had an online presence, took the opportunity to double their digital channels – the major FMCG brands including Hindustan Unilever (HUL) and Tata Consumer Pvt. Ltd. (TCPL), among others, began to promote existing and new brands in marketplaces and their own stores.
âOver the past 12 months, when we look at the amount spent by these legacy brands on Facebook, Google and other markets, it’s difficult for brands like ours to get premium banner space. They have diverted a good chunk of their online marketing budgets over the past year, and all D2C brands are under great pressure, âsaid Vineeta Singh, CEO and co-founder of SUGAR Cosmetics. Your story in a previous interaction.
Digital is the lifeline
An aggressive digital presence is more of a necessity than a choice for any consumer brand these days. And this growing demand for online storefronts has made acquiring customers online more expensive.
Some D2C brands we spoke to that did not want to be named saw their customer acquisition costs (CAC) double from the days before the pandemic, while a few other established players were able to keep their CACs. under control.
D2C brands are lining up to enter the CRED store. Image Credit: YourStory Design
Ecommerce marketplaces, including Amazon and Flipkart, also charge a commission on sales, ranging from 15-20% depending on the product and category. This made it increasingly necessary to find an alternative sales channel for D2C brands.
Enter CRED with a chic new store, and unlike other ecommerce platforms, CRED is determined not to treat all D2C brands the same.
âWe work with a diverse set of brands, which are in different stages of growth. We understand their metrics for success and help develop respective growth plans on the platform, âthe CRED spokesperson said.
For example, a six-year-old personal care D2C startup, which is a well-established name in the ecosystem, is expected to cover the cost of last mile delivery. CRED not only offers its digital real estate for free, but also pays the full cost even if the product is promoted on the platform.
âWe treat CRED like a market, just like we would on Amazon or Nykaa. Since we are not a discount brand, whenever they (CRED) sell our products at a discount we always receive full payment. The discount is facilitated by CRED points, âsaid the founder of the personal care startup, who requested anonymity.
However, this is not the case for another D2C brand. The recognizable three-year-old brand operates in the same category but has to bear the discounts and last mile delivery costs, while CRED gives them real estate for free.
âCRED knows the value of its clientele and the D2C brands are aimed only at this clientele. So, they (CRED) make different deals with different players because they don’t work like other ecommerce platforms, where building brand visibility has become very expensive. They want to give D2C startups what they want, but on their own terms, âexplains a D2C startup investor on condition of anonymity.
While this is only the early days and there are plenty of D2C brands still waiting to be listed, the jury is still out. But the personalized treatment granted by CRED will ensure its users a more organized shopping experience, a first of its kind in India.
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