As we were discussing, the D2C model has revolutionized the way business is getting done in India. While traditionally associated with the urban markets, it is high time we explore the D2C model’s potential for Indian rural suppliers to transform their operations and reach a broader customer base. 

But, with all major changes, it is not as easy as it sounds. There are both pros and cons that need to be carefully evaluated. In this case, it is even more critical, as the rural businesses (especially those led by women entrepreneurs) have just started to see the positives of self-employment and are gradually starting to climb the financial pyramid. Any large drop might bring about a major disruption in their lives.

One of the most popular benefits that is achieved through the D2C model is that it cuts off the middleman. And, indeed, rural suppliers often face challenges associated with middlemen, who can take a significant share of profits and control the supply chain. By adopting the D2C model, rural suppliers can bypass intermediaries and establish direct relationships with consumers, thereby retaining more control over pricing and distribution.

But this assumes that the rural business, still in its infancy, will be ready to establish the distribution channel with the same expertise. Those who work closely with rural businesses will also understand that there are several distribution channels that also aid in the financial literacy of rural business owners. To earn is not the only objective, to manage the increased earning in a manner that is beneficial for long-term growth, is also as important for rural entrepreneurs. While cutting off the seasonal brokers will help, it might be counterproductive to eliminate the chain of such distributors.

We all agree that a primary advantage of the D2C model is its ability to reach consumers regardless of geographical barriers. Rural suppliers can leverage digital platforms and e-commerce channels to showcase their products to a wider audience beyond their local markets. This expanded reach opens up new opportunities for growth and revenue generation. Moreover, rural suppliers have a deep understanding of the production process and can tailor their product offerings to meet the specific needs of their target audience. This customization can include variations in product sizes, packaging, and even product features, catering to diverse consumer preferences.

On the flip side, over-customization may lead to quality issues, leading to tarnishing of the brand image. Direct interaction with consumers in forums may lead to negative word of mouth if the quality suffers. While the distributors are normally strict with the rural suppliers to maintain stringent quality standards and ensure product authenticity, by eliminating intermediaries, the low-trained quality personnel may have to oversee every aspect of the production process, from sourcing raw materials to packaging and delivery, thereby generating a major risk in maintaining high-quality products that meet consumer expectations.

Summing up for this blog, I would like to state that we should welcome the D2C model for rural entrepreneurs, provided proper preparatory skills like financial literacy, quality assurance, and others are developed through proper developmental training.