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Budget 2024: Ecommerce hubs to spur D2C export

The move to roll out ecommerce hubs for exports will add heft to the overseas play of the direct-to-consumer brands

Published: Jul 23, 2024 04:38:46 PM IST

The move will open opportunities for Indian players to boost their reach globally, and enhance the ease of doing business and accessing new markets. Image: Getty Images

The government’s move to establish ecommerce hubs for exports has drawn praise from booming direct-to-consumer (D2C) players. With the Indian ecommerce industry projected to surpass the $350-billion mark by 2030, the proposal to set up an export hub will propel the industry.

“The establishment of ecommerce hubs and reduction of TDS rates for ecommerce operators will provide a significant boost to the growth of D2C sector,” says Priyanka Salot, co-founder of The Sleep Company, a sleep and comfort tech solutions company which is backed by biggies such as Premji Invest, Fireside Ventures and Alteria Capital. The move, adds Salot, will go a long way in boosting the efficiency of D2C players and enhancing market accessibility for them. “This is a stimulus for the country's economic development and will strengthen India's status as a global ecommerce player,” she adds.

A hub for ecommerce exports will also increase the competitive preparedness and intensity of the domestic players. “It will significantly empower MSMEs, traditional artisans, and D2C players to compete internationally,” says Amit Khatri, co-founder of Noise, one of the top wearable brands in India. While the move will open opportunities for Indian players to boost their reach globally, it will also enhance the ease of doing business and accessing new markets. India has long been an attractive consumer market for international brands, supported by collaborative and business-friendly policies that enable seamless operations. “The export hubs are an efficient step in unlocking similar avenues for homegrown companies,” says Khatri, adding that such hubs will allow a global stage for homegrown players to showcase their innovation and entrepreneurial mindset, and will strengthen India’s position in manufacturing.

The Indian D2C market value is projected to surpass $60-billion mark by 2027, according to a report by KPMG. The big challenge for D2C players now is profitability. According to a recent report by MMA Global India and Publicis Commerce, over 80 percent of D2C ventures are yet to post profits. Titled “D2C Advantage: Guide to Maximise RoI of e-commerce investments,” the study highlights a slew of factors that drag the bottomline of D2C players such as high-user acquisition costs, complexities in operations, and unclear returns on investments.

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