Summary of How to Export | Find Foreign Buyers | Indian D2C Going Global | Sarthak Ahuja #008

Summary of "How to Export | Find Foreign Buyers | Indian D2C Going Global | Sarthak Ahuja #008"

This video features an in-depth discussion with Ake, co-founder of Shiprocket, on how Indian D2C (Direct-to-Consumer) brands can expand globally, focusing on markets like the US, UK, UAE, Canada, and others. The conversation covers key strategies, category insights, market selection, compliance, pricing, shipping, and unit economics for Indian brands going international.

Main Financial Strategies and Business Trends

  1. Right to Win Criteria for Global Expansion
    Indian brands should focus on categories where they have a "right to win," based on:
    • Price Competitiveness: Ability to manufacture cheaper in India than abroad (e.g., handwork, embroidery, customization).
    • Product Quality: Indian products gaining reputation as best-in-class in categories like leather goods and durable products.
    • Intrinsic "Made in India" Advantage: Products with geographic or cultural authenticity, e.g., Ayurvedic products, wellness, yoga-related goods.
  2. Category Insights
    • Ayurveda & Wellness: High potential, especially in markets like the US where products like Ashwagandha have massive demand.
    • Fashion & Apparel: Challenging due to sizing and returns; recommended to focus on free-size items like scarves, shawls.
    • Leather Goods: Seen as gifting items with good potential.
    • Home Décor: Growing demand for lightweight, design-sensitive products.
    • Jewelry & Accessories: Largest shipping category on Shiprocket; success possible via marketplaces like Etsy and eBay, relying heavily on reviews and brand building.
    • Occasion Wear: Opportunity through trunk shows and influencer-led offline events in international cities.
  3. Market Selection & Geography Strategy
    • US: Largest and most competitive market; highest potential but also highest cost and complexity.
    • UK & UAE: Easier access, especially UAE due to proximity and diaspora.
    • Canada: Lower priority due to high compliance and lower premium consumption; largely driven by students buying Indian-specific products like books and homeopathic items.
    • Emerging Markets: Saudi Arabia and Indonesia show promise but require strong local partnerships and have opaque distribution channels.
    • Continental Europe: Difficult due to cultural and regulatory complexities.
  4. Compliance & Regulatory Costs
    • Compliance is highest for personal care, health supplements, and ingestible products due to health risks and labeling laws.
    • Consulting fees for compliance range from $10 to $100 per SKU depending on the market (US being the most expensive, UAE the least).
    • Compliance involves professional consulting for packaging, labeling, and legal disclaimers, not necessarily government certifications like in India.
  5. Selling Channel Strategy
    • Traditional approach: Start with marketplaces (Amazon, Walmart), build reviews and volume, then move to D2C channels, and finally offline retail/distribution.
    • Recent shift: Marketplaces have tightened compliance, making it harder to list or keep products live. Brands are now advised to start with D2C (social media, influencer marketing) to build brand presence before or alongside marketplace listing.
    • Influencer marketing has become more affordable and effective due to AI-enabled content creation.
  6. Step-by-Step Process for Going Global (Typical 3-Month Exercise)
    • Select target geography based on data and market fit.
    • Analyze supply chain costs and choose logistics partners (Shiprocket, DHL, FedEx, etc.).
    • Work with compliance consultants to ensure product and packaging adherence to local laws.
    • Prepare product listings with optimized content and visuals for marketplaces.
    • Plan advertising and marketing strategy (organic and paid).
    • Budget approximately ₹1 crore (~$120k) for first 6 months for a 10-product portfolio.
  7. Unit Economics and Pricing Benchmarks
    • Indian domestic selling price multiplied by 2.5x to 3x for international markets (e.g., ₹100 in India becomes ₹250-300 abroad).
    • COGS remains roughly the same but becomes a smaller % of selling price internationally (~10-15%).
    • Shipping costs are significantly higher internationally (up to 40% of selling price for drop shipping).
    • Marketplace commissions add another ~20%.
    • After shipping, COGS, and commissions, brands typically have ~30% gross margin before advertising.
    • Advertising spend recommended at ~10% of revenue to build market presence.
    • Initial Return on Ad Spend (ROAS) expected around 2-3x in first 6 months; target 4-5x ROAS by 6-12 months to continue scaling.
    • Amazon FBA model reduces shipping cost but adds warehousing fees.

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