Highlights
- India's $1.7 trillion retail market is rapidly shifting toward organised and online retail, driven by a fast-growing internet population and accelerating e-commerce adoption, with online spending expected to grow from $39 billion to $200 billion over the next five years.
- Consumer behaviour is evolving, with women driving a significant share of household decisions and online shopping, while demand for niche, customised products continues to outpace the offerings of traditional incumbents.
- Improved digital and payment infrastructure has enabled the rise of D2C brands that build strong consumer connections through distinctive branding, agile operations, data-led insights and rapid product innovation.
- India's D2C market is estimated to reach $100 billion by 2025, supported by a brand-starved consumer base and the emergence of category-defining companies across beauty, food, fashion and lifestyle.
- Investor interest in D2C brands is expected to remain strong, with increasing funding activity, consolidation over the next few years and potential IPOs in a 3-5 year timeframe, positioning D2C as a key driver of value creation in the consumer sector.
Direct-to-consumer brands are gaining strong global momentum and represent a $100 billion opportunity in India by 2025, supported by a large unorganised retail market, rising e-commerce penetration and visible white spaces across categories. Shifting consumer behaviour, improved ecosystem support and accelerated digital adoption, especially during COVID-19, have enabled D2C brands to scale rapidly by differentiating through sharper customer insights, marketing, technology and operations. Strong category tailwinds in beauty, food and fashion, alongside increasing funding, consolidation and strategic interest from incumbents, position D2C as a powerful engine of value creation in India.
Category deep dive
Beauty & Personal Care
The global Beauty & Personal Care market is over $500 billion, led by the US and China. D2C brands, emerging globally since 2010, are thriving in India’s growing market due to clear brand propositions, agile operations, asset-light models, and flexible distribution. A D2C strategy combining online traction, omnichannel scale, and a house of brands can drive significant growth.
Food and Beverages
The global Food & Beverage market exceeds $12 trillion, with India ranking as the third largest. D2C brands have driven significant value globally, and India’s branded packaged foods are growing steadily, supported by favourable macro trends. While F&B has traditionally been a challenging category, multiple tailwinds create strong opportunities for D2C success across segments such as meat and alternatives, dairy, snacks, and health-focused products.
Fashion
The Indian fashion market, over $100B and growing 13% annually, offers high potential in underpenetrated women’s and kids’ segments. Online fashion is expected to reach $32B by 2025. D2C brands, tailored to local market nuances, leverage agile supply chains and a mix of website and marketplace distribution for scale and strong unit economics. Sub-sectors like eyewear, women’s innerwear, activewear, and western wear benefit particularly from the D2C model.
Key D2C players in other sectors
Scaled D2C companies in other sectors include FirstCry, India’s leading parenting ecosystem and kids’ commerce platform; Boat, a millennial-focused audio products brand; and Atomberg, known for high-performance, energy-efficient fans, among others.
Conclusion
In a brand-hungry market, consumer brands—both MNC and indigenous—have historically generated significant and sustainable investor value. Looking ahead, D2C brands are poised to drive the next decade of value creation. Unlike traditional distribution channels, which face limited retail space and high commissions, D2C companies leverage their digital strengths to establish themselves as strong contenders. By combining their own digital platforms, large marketplaces, and selective omnichannel strategies, they can scale efficiently, applying lessons learned from the failures and excessive customer acquisition spend of Western D2C brands.
Authors
Digital, Technology & Consumer Investment Banking
Pankaj Naik
Neeraj Shrimali
Simranjit Kaur
Namita Dhepe
Udit Ahuja
Gaurav Sharma
Manisha Verma
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