After seeing yet another misclassification of D2C as “Online only” in The Economic Times, I wrote the following letter to its editor.

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From: Ketharaman Swaminathan [s.ketharaman@gtm360.com]
Sent: Monday, 22 November 2021 4:53 PM
To: editet@timesgroup.com
Subject: Small Towns Bring Big Bucks to Direct-to-Consumer Brands | Letter to Editor

Dear Editor of Economic Times:

This has reference to the article entitled “Small Towns Bring Big Bucks to Direct-to-Consumer Brands” by Ratna.Bhushan@timesgroup.com in today’s edition of The Economic Times.

Like many articles in the Indian media, this one too gets D2C wrong when it says “D2C – where many brands are online only”.

D2C does not mean “online only”.

By definition, a Direct-to-Consumer brand is one that bypasses the distributor-wholesaler-retailer triad and sells directly to Consumers (Source: https://whatis.techtarget.c…. Nowhere in the definition of D2C does it say that D2C has to be online only. In fact, D2C pioneers like Warby Parker sell a lot of their products via brick-and-mortar stores. The acid test for D2C is that the online and offline properties must be owned by the brand.

If those selling venues are owned by retailers rather than the brand, the basic definition of D2C is not fulfilled, the brand is a good old FMCG brand and cannot be called D2C. As corollary, a brand that sells via Amazon or some other third party ecommerce website does not qualify as D2C. What it does qualify to be called is “newbie FMCG brand that does not yet have the wherewithal to attract a third party distribution channel”.

For those wondering how terminology matters, well, it does, at least in this case: D2C and FMCG companies have very different business models and existential matters like valuation and availability of venture capital are determined by their exact classification.

This misclassification of D2C is fairly common in the popular discourse in India but, as a leading business publication, Economic Times might want to take the lead in ending it by using the correct definition of D2C going forward.

Thanks and Regards.

KETHARAMAN SWAMINATHAN
Pune, INDIA

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Going by my past experience of pointing out faux pas in its own reporting, I don’t expect Economic Times to publish my letter. However, I do expect it to correct its D2C reporting in the future, as it did when I pointed out its frequent conflation of private sector bank with private bank in the past.