ETBWS 2025: Why ‘Zero to One' is still the most exciting stage for D2C

Time of India

07-07-2025

At the seventh edition of the
ET Brand World Summit 2025
, hosted by ETBrandEquity, a packed room of marketers and startup founders gathered for an engaging fireside chat titled 'Pitch Perfect: A VC's Lens on India's D2C Equity.' The session featured
Chandrasekhar Venugopal
, Principal at venture capital firm Z47, in conversation with Krystyna Devina Lason, Senior Anchor and Producer at The Economic Times.
Venugopal described his career as a journey marked by a consistent focus on "zero to one" value creation. His path, which he attributes to "serendipity," began at BCG. He then led growth strategies at Foodpanda before venturing into his own start-ups in food and digital marketing. Prior to Z47, he also ran
Glance Collective
. Venugopal expressed a deep affinity for this foundational stage, stating, 'I'm not an operator or a founder or a VC; I'm just in love with the stage. I think it's a beautiful stage. In 'zero to one,' you just get to see magic created from nothing and that's what got me here.'
Reflecting on the current consumer landscape, Venugopal noted that the environment for building brands has never been more promising. 'I have been acquiring consumers since 2014 across various sectors, and it has never looked this good. What once required immense effort to reach a five-lakh monthly run rate is now comfortably reaching one crore. Contribution margins are improving, customer acquisition costs are declining, return on ad spends are rising, and retention and repeat purchases are increasing across categories. It is truly an optimistic time to build in India.'
India's D2C market
is on a distinctive path, according to Venugopal, prompting discussion about whether it will follow the lead of the US or China. 'I don't think our supply backend is the same as some of these other countries and their trajectory,' Venugopal explained. He pointed out a unique paradox in India: despite being "brand-starved" with a largely unorganised and fragmented market, its supply chain infrastructure isn't yet fully developed, resulting in a substantial "influx of material from outside." He emphasised that to effectively serve India's enormous consumer base, "you do need innovation on the supply chain backend and get new price points in."
Venugopal offered an interesting example from Z47's portfolio: Country Delight. "Country Delight started off selling milk. Now it does everything from veggies to, you name it." This expansion, he clarified, "required deep, absolutely deep backend sort of vertical integration to make the quality of milk right, or to get the freshness of the fruits and veggies right, or to get the staples right."
He highlighted that "for Country Delight to unlock a new price point and repeat behaviour, it took a tonne of work on vertical integration." He also praised
Lenskart
for its similar approach, noting that "every large sort of outcome, you'd see this sort of deep vertical integration to sort of crash price points and reach India in the right sort of positioning." This focus on vertical integration is presented as a vital differentiating factor for successful D2C brands within the Indian landscape.
On what makes a brand VC-backable, Venugopal cautioned against a one-size-fits-all approach. 'We have done a disservice by grouping very different businesses under the D2C label. Everything from
Unilever
to Nike to Decathlon gets lumped together, but they are not the same. Public market investors understand these nuances, and we need to apply the same lens. Metrics like retention and revenue are important, but their significance varies by category. A tile brand and a skincare brand will never have the same retention, but both can build meaningful businesses.'
For marketers and founders, he encouraged a greater focus on what he termed 'the hidden potential of the long tail.' 'Marketers in large companies focus on the big levers that can move the needle by ten times. But in startups, there is value in the overlooked insights found in the long tail. These can lead to breakthroughs that do not come from conventional strategy. It is often in these small, seemingly unscalable moments that the biggest growth levers lie.'
Addressing the scaling challenge from the first thousand to the first million customers, he advised founders to stay close to their users. 'Do not delegate customer conversations too early. That is where your product-market fit lives. Also, while growing fast, do not lose sight of financial discipline. It is easy to compromise on terms in the short run, but that can come back to bite you. Finally, strategic thinking should not be postponed. If your business becomes too dependent on one channel or partner, it can create risk. Take time to step back and assess whether your trajectory is sustainable and well-positioned.'
Venugopal believes AI will be a monumental force in D2C, creating entirely new brands and sales channels. He highlights a historical pattern: every major shift in distribution (from newspapers to mobile) has led to new brands emerging. While AI will boost productivity, Venugopal urges founders and marketers to think bigger: how can AI enable entirely new frameworks? He points to areas like personalised experiences in local stores or property tech, which are still rudimentary. AI could transform these into truly one-to-one interactions.
A key example for India is bridging the digital divide in "Bharat." Current app interfaces are often intimidating due to their Western UI/UX. Vernacular, voice-powered AI could be a game-changer, leveraging the comfort people have with phone conversations. This seemingly "unscalable" approach could forge entirely new, accessible commerce channels and, consequently, new brands. As he puts it, "Do things that don't scale in the beginning. You'll be surprised at what gets created."
When asked what category he would choose if he were to start his own
D2C brand
today, Venugopal offered a framework rather than a specific sector. 'If you look at the most successful brands of recent times-Decathlon, Lenskart, Zudio, Country Delight, they all combine vertical integration with control over distribution. These are not just brands; they are full-stack businesses. On the backend, they own their supply chain. On the frontend, they own their customer interface through apps or stores. When a consumer sees a retail experience, but the business owns the full profit and loss like a brand, it creates a powerful advantage. If you find a category where you can do both, I would love to hear about it.'