Koen van Gelder
Team Lead E-commerce
A growing direct online selling market is the nightmare scenario for marketplace giants like Amazon and Alibaba - a nightmare that is quickly becoming a reality. D2C e-commerce, short for direct-to-consumer e-commerce, is a sales channel that obliviates the need for online marketplaces and traditional online retailers. Manufacturers that sell their products directly to their consumers effectively “cut out the middleman”. In recent years, the technological threshold to enter the e-commerce game has been reduced significantly, leading to a massive D2C e-commerce market growth in the United States. The market was estimated to be worth nearly 200 billion U.S. dollars in 2024 – roughly double the size of the 2020 D2C market. Growth is forecast to continue in the future.
From retail giants…
Some of the most well-known names in e-commerce attribute a large share of their success to their D2C strategy. For instance, global sneakers market leader Nike now generates nearly half of its revenue through sales on its own website. Another famous example of how successful direct online selling can be is the Canadian athleisure company Lululemon. They also sell nearly 50 percent of their inventory through their own sales channels. Established players look at D2C as an additional revenue stream for good reason, as new generations of consumers are increasingly interested in the channel. Indeed, Gen Z consumers have a much higher preference for direct online commerce than older generations.…to small-scale entrepreneurs
While big FMCG manufacturers look at D2C as an additional revenue source, smaller e-commerce businesses often rely on direct selling as their only means of generating sales. For this market segment, direct selling comes with its own set of challenges. Setting up an online platform, organizing supply chain logistics, and reaching the target audience are crucial variables determining a small player’s success. Luckily, today’s small business owner has more possibilities than ever before. Firstly, setting up a website is easier than ever, with companies such as Shopify and WooCommerce offering a myriad of sales platform possibilities. Secondly, order fulfillment can be outsourced to various SaaS and shipping providers. Finally, target audiences are easier to find than ever before, thanks to the surge of social commerce. Social platforms like TikTok and Instagram allow for high audience segmentation, bringing niche products and consumers together.
