The froth has gone out of D2C, and brands that want to last will have to earn it slowly. That was the message from Ananth Narayanan, Founder and CEO of BRND.ME, at the 17th edition of YourStory's TechSparks.
In a fireside chat with Shradha Sharma, Founder and CEO of YourStory and The Bharat Project, Narayanan said the shift towards profitable businesses began two to three years ago. "Without product-market fit, just scaling, which a lot of D2C brands used to do, I don't think is valued anymore," he said. "You need real cash flows, you need real product love, which is very hard."
There is no shortcut, he added, "I don't think there is a get-rich-quick on brand building." In his experience a brand takes seven to 15 years to earn real loyalty and cohorts that last five or ten years. Patient capital is becoming easier to find, he said, through FMCG majors such as Unilever and P&G buying D2C brands, and through a coming wave of IPOs. Founders can help themselves by being frugal. "Most of the large FMCG businesses never took any money. Is it possible for D2C to do the same? I think the answer is yes. It's hard. It's very unsexy."
Think global from day one
Narayanan believes India's next big brands will be built for overseas shoppers. The old barriers of consumer understanding and distribution are easing, he said, with Amazon Global Selling for reach and AI agents trained on Reddit threads and Amazon reviews to stand in for foreign consumers. BRND.ME, which earns more than half its revenue outside India, uses such agents in product development.
His example was Majestic Pure, the group's aromatherapy brand. India is one of the world's top essential-oil producers, and the two biggest aromatherapy brands, doTERRA and Young Living, both American, source over 30% of their production here. Majestic Pure sells comparable products at around $25 against their $65. "It is not the same packaging," he said. "There is a story that you have to learn to tell to command the price premium."
His tip for founders: look at what India exports in bulk, and ask whether a brand can be built on top of it. He named categories like pet care and health and wellness.
Focus, R&D and packaging
BRND.ME has cut down its portfolio to MyFitness, Majestic Pure, Botanic Heart and Party Props. "Our overall business is larger, but the number of brands that we have is smaller," he said. He also called for more real R&D from Indian FMCG firms, citing Botanic Heart's two-year push on efficacy testing so that its claims hold up in the US.
On packaging, he admitted the company still hires a US agency for design. "Packaging is marketing," he said. "You're competing with the Korean brand, the European brand."
"The celebrity may add recall, but the product sells"
On celebrity-led brands, Narayanan was blunt. "A face can give you initial momentum, but I don't think it can get you repeat consumers." Paying an ambassador for a campaign is fine if the return on spend justifies it, he said. Making a celebrity a partner is a different matter, and works only if the star fits the brand and a seasoned business person makes the product, marketing and pricing calls. Otherwise, "you think the celebrity sells, but reality is the product sells." Sharma called it the headline of the session.
Brands that mislead consumers, he said, do not last. "Maybe you can fool consumers once, but I don't think you can fool them again." His advice was to keep 8 to 20% of revenue coming from a brand's own channel, since quick commerce and marketplaces give little feedback, and to be honest about reviews and ratings.
Quick commerce and the cash-flow game
Quick commerce is here to stay, Narayanan said, and works best where speed changes the purchase, as with Party Props. For an FMCG item bought once or twice a month, shelf space is tight and the platforms will take more of the value. He rejected the idea of a monopoly. "There is no monopolistic world in India. If you can compete here, you can compete globally."
He does not judge founders who build to sell, but said that "eventually all valuation games have to be cash flow games, because the only real exit eventually is an IPO." His own aim is a long game. His parting advice to founders was to build with heart: "Build products that you love. Otherwise you are becoming a bit of a machine that churns out unit economics."
Brand India and early-stage funding
Asked how he would pitch India as a brand, Narayanan said it stands for talent today and should now move on to culture, from yoga and Ayurveda to mindfulness. "Why can't we make the Indian way of living the most important thing in the digital age?"
Answering an audience member who said pre-seed D2C funding is hard to come by, he disagreed. "There is a lot of money available if you have a good idea for a consumer brand. In fact, the later stage is much harder. Early stage, it's an idea, and most people like ideas."