India’s D2C market is projected to reach ₹8.3 lakh crore (~$100 billion) by 2025, marking a massive leap from $12 billion in 2022. This growth is driven by rising internet users (900 million by 2025), increasing smartphone penetration, and a shift toward online shopping, especially in Tier-II and Tier-III cities.
Key Highlights:
- Market Size: $100 billion by 2025, up from $80 billion in 2024.
- Consumer Base: Over 125 million new online shoppers in the last 3 years, with 80 million more expected by 2025.
- Top Categories: Fashion, Food & Beverages, and Beauty & Personal Care.
- Regional Growth: Tier-II and Tier-III cities now contribute over 50% of D2C revenue.
- Supporting Ecosystem: SaaS platforms, logistics providers, and fintech companies are enabling efficient scaling.
D2C brands in India are thriving by focusing on personalization, direct consumer engagement, and leveraging digital infrastructure. The rise of non-metro consumers and demand for sustainable, eco-friendly products are reshaping the retail landscape. Dive deeper to explore the opportunities and challenges in this booming sector.
Indian D2C Market Size and Growth Numbers
Current Market Value and Future Projections
India’s Direct-to-Consumer (D2C) market is on a rapid growth trajectory, with its valuation projected to soar between ₹6.7 lakh crore and ₹8.3 lakh crore (around $80-100 billion) by 2025 [1][2]. This represents a remarkable leap from its $16.85 billion valuation in 2023 [3], showcasing the sector’s dynamic expansion.
Interestingly, these figures have surpassed earlier forecasts. Initially, the market was expected to hit $60 billion by 2027. However, it crossed the $80 billion mark in 2024 and is now on track to exceed $100 billion by 2025. This accelerated growth reflects strong market fundamentals and increasing consumer engagement with D2C brands.
Looking further ahead, projections estimate the D2C market in India could grow to as much as $300 billion by 2030. Even conservative estimates place the figure at $267.03 billion by the same year, with a compound annual growth rate (CAGR) of 25% [2]. Within specific segments, the numbers remain impressive - digital-first fashion brands in the D2C space alone are expected to generate $43.2 billion by 2025.
Globally, the D2C e-commerce sector hit $162.91 billion in 2024, with forecasts suggesting it could grow to $595.19 billion by 2033 [1]. India plays a significant role in this global boom, standing as the second most-funded country for D2C startups, trailing only the US and outpacing nations like China, the UK, and Italy [4].
The grocery segment of India’s D2C market further exemplifies this growth. It was valued at approximately $6.7 billion in FY23 and is expected to grow at a CAGR of 41% through FY27. These figures underline the sector’s potential across various categories.
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Market Performance Indicators
The rapid expansion of India’s D2C market is strongly tied to its digital infrastructure and evolving consumer habits. By 2023, internet penetration in the country had surpassed 700 million users and is expected to exceed 900 million by 2025. Similarly, smartphone penetration is projected to reach nearly 1 billion users by 2026. This increasing digital connectivity has significantly expanded the market, as more consumers turn to mobile platforms for shopping.
India currently hosts nearly 11,000 D2C companies, though only about 800 of these have secured funding as of 2024 [4]. This highlights both the accessibility of the sector for entrepreneurs and the selective nature of investment in the space.
Demographics also play a crucial role in this growth. Millennials and Gen-Z consumers make up approximately 70% of India’s digital consumer base [5]. Additionally, over 60% of new D2C customers are emerging from Tier 2 and Tier 3 cities, indicating a shift beyond traditional urban centres [5].
Direct e-commerce sales have seen a significant boost, growing from just 2-3% to 10-15% of India’s online retail market, which is valued at ₹5.86 lakh crore. This shift from traditional retail channels to direct sales underscores a fundamental change in consumer behavior and brand strategies.
While investment sentiment has become more cautious, it remains optimistic for businesses with sustainable growth models. This shift in focus from sheer valuation to sustainability and profitability signals a maturing market, where long-term growth takes precedence over short-term gains. These trends are supported by the robust performance indicators outlined above.
What’s Driving Indian D2C Market Growth
The rapid rise of India’s direct-to-consumer (D2C) market is no coincidence. It’s the result of several interconnected factors that are reshaping how Indians shop and how businesses connect with their customers.
Internet Access and Online Shopping Growth
India’s digital revolution is the backbone of the D2C boom. By 2025, the country is expected to have 900 million internet users and nearly a billion smartphone users. With mobile commerce leading the way, most online purchases now happen through smartphones [6]. This growing connectivity has opened up massive opportunities for D2C brands to reach new audiences.
India’s e-commerce market is on track to hit $111 billion by 2024 and could grow to $200 billion by 2026. By 2030, an estimated 500 million Indians will be shopping online. This digital shift is creating a fertile ground for D2C brands to thrive.
New Consumer Markets
The rise of Tier-II and Tier-III cities is another major factor driving the D2C wave. As disposable incomes grow in these regions, they are becoming key markets for D2C brands. Local e-commerce markets in these cities are expanding at an annual rate of 23% [7].
Consumers in these cities are adventurous and willing to try new experiences, including exploring international flavors in food and beverages. Social media plays a pivotal role here - 7 out of 10 people say they try a product for the first time after seeing it on social platforms [8]. While these consumers are price-sensitive and value-driven, they are also looking for personalized experiences, ethical products, and convenient shopping options.
Move from Traditional Retail to Direct Sales
The shift from traditional retail to D2C models reflects changing consumer needs and smarter business strategies. By cutting out middlemen, D2C brands can offer competitive prices, which is a big draw for cost-conscious shoppers. This model also allows brands to connect directly with customers through websites and social media, enabling faster feedback and quicker product adjustments.
The success of major D2C players showcases the potential of this model. For instance, Lenskart reported ₹5,500 crore in revenue, boAt reached ₹3,121 crore, and Mamaearth achieved ₹2,488 crore in FY2024 [9]. D2C brands not only break geographical barriers but also offer fresh, personalized experiences that make traditional retail feel outdated. With projections suggesting that nearly 1 in 10 retail dollars will be spent on e-retail by 2030 [10], the D2C model is perfectly aligned with India’s digital and demographic transformation.
Top Growing D2C Categories in India
India’s D2C market is booming, with three standout categories leading the charge. These sectors not only mirror shifting consumer behaviors but also set the stage for the evolving competitive landscape.
Fashion and Apparel
Fashion continues to dominate India’s D2C space, driven by a growing appetite for personalized and affordable options. With a predominantly young and tech-savvy audience, brands in this sector are thriving by weaving compelling stories and maintaining transparency. Interestingly, nearly 70% of Indian shoppers are highly price-conscious, pushing D2C fashion brands to cut out middlemen and offer high-quality products at attractive prices. As consumer interests broaden, the spotlight also turns towards food and beverages.
Food and Beverages
The Food and Beverage industry is on an impressive growth trajectory. This surge is being powered by a shift towards healthier eating habits and changing lifestyle choices. Products focused on wellness and even the rising demand for pet food are key drivers of this growth. Additionally, urban areas beyond major metros are increasingly contributing to this momentum. With 80% of consumers prioritizing same-day delivery, D2C brands in this sector are heavily investing in logistics to ensure fresh, high-quality products reach customers quickly. Meanwhile, the beauty and personal care segment is undergoing its own transformation, keeping pace with modern consumer demands.
Beauty and Personal Care
The Beauty and Personal Care segment is one of the fastest-expanding D2C categories in India. Valued at USD 4.09 billion in 2025, it is expected to skyrocket to USD 35.92 billion by 2032, growing at a staggering 36.4% CAGR[11]. This growth reflects a shift towards personalized skincare, clean beauty, and evolving beauty standards. Sustainability is also becoming a major focus, with over 60% of consumers willing to pay extra for eco-friendly products. To meet these expectations, many D2C beauty brands are adopting sustainable packaging and ethical sourcing practices. Social media and influencer collaborations are playing a pivotal role, helping brands connect with younger audiences in meaningful ways. Notably, women-led D2C brands are excelling, with 65% of their 2023 customers coming from non-metro cities.
Regional Markets and Geographic Distribution
India’s D2C market is undergoing a fascinating transformation, with smaller cities stepping into the spotlight as key drivers of digital commerce. While metro cities continue to lead in innovation, the real growth story is unfolding in Tier-II and Tier-III cities. This dynamic shift highlights how these regions are reshaping the future of D2C in India.
Tier-II and Tier-III Cities as Growth Areas
The numbers paint a clear picture of change. Tier-II and Tier-III cities now account for more than 50% of D2C revenue[12]. This shift underscores how these regions are becoming central to India’s retail evolution.
Shopping events reveal the scale of this transformation. For instance, during the Big Billion Day Sale, Jaipur saw a 35% rise in online sales, while Indore experienced a 40% surge during The Great India Sale[7]. Surat went even further, recording a 50% increase during the Prime Sale. These statistics show how smaller cities are embracing eCommerce with enthusiasm.
While these cities drive sales, they are also emerging as hubs for D2C brands. Our data from D2CStory reveals a significant number of brands headquartered in these key Tier-II cities, underscoring their growing importance in the ecosystem.
| City | Number of Brands (on D2CStory) |
|---|---|
| Ahmedabad | 25 |
| Jaipur | 24 |
| Pune | 24 |
| Surat | 13 |
Several factors are propelling this growth. Internet penetration in these regions has reached nearly 60% as of 2023, supported by affordable smartphones, better digital infrastructure, and rising disposable incomes. Together, these elements have created fertile ground for D2C brands to thrive.
“Offline shopping has always been constrained by a fundamental limitation - the need to have a sufficient population in the vicinity to support a brick-and-mortar store. The fixed operating costs associated with running a physical store make it unfeasible to establish outlets in every village and city. Online shopping has emerged as a game-changer, breaking free from the shackles of geographical boundaries. Regardless of their location, customers can now easily purchase products from online stores. This benefits not only the customers themselves but also the online retailers, particularly in Tier II and Tier III cities where marketing costs are significantly lower compared to metropolitan areas.”
- Ilesh Ghevariya, founder and CEO, French Crown
Consumer behavior in these cities reflects high engagement levels. Cities like Guwahati, Coimbatore, and Lucknow are leading in online shopping engagement[13]. This isn’t just casual browsing - it translates into real business opportunities. For example, over 60% of SUGAR’s sales come from non-metro cities like Siliguri, Karnal, and Bhatinda[13].
D2C brands are responding with thoughtful strategies. Plum, a vegan beauty brand, plans to open 100 stores by 2024, including locations in tier-2 cities such as Surat, Kanpur, and Kochi, complementing its digital presence with a robust omnichannel approach.
The potential for growth is immense. The e-commerce market in Tier-II and Tier-III cities is expanding at an annual rate of 23% and is projected to reach ₹8,30,000 crore by 2026[7]. For brands willing to invest in understanding these markets, the opportunities are enormous.
Major Cities as Business Centers
While smaller cities are driving growth in sales volume, major metros like Bengaluru, Mumbai, and Delhi NCR remain vital for innovation and strategic direction. These cities serve as hubs for talent, funding, and infrastructure, making them integral to the D2C ecosystem.
Metropolitan areas offer unique advantages, such as access to early adopters who help refine products before they are rolled out to broader markets. They are also home to venture capital firms, accelerators, and other resources that support startups in scaling their operations.
The relationship between metros and smaller cities is evolving. By 2025, Tier-I cities are expected to hold a 50% market share, with Tier-II cities at 35% and Tier-III cities at 15%. This narrowing gap highlights the growing importance of smaller cities without diminishing the strategic role of metros.
Success stories from across the country illustrate the diversity of India’s D2C landscape:
| City | Online Sales Increase | Top-Selling Categories |
|---|---|---|
| Jaipur | 35% (Big Billion Day Sale) | Fashion, Handicrafts |
| Indore | 40% (Great India Sale) | Electronics, Apparel |
| Surat | 50% (Prime Sale) | Fashion, Home Decor |
| Chandigarh | 30% (Big Billion Day Sale) | Electronics, Fashion |
| Coimbatore | 45% (Great India Sale) | Textiles, Electronics |
| Patna | 40% (Big Billion Day Sale) | Electronics, Fashion |
“Tier II and III markets remain a core priority as we aim to reach out to new customers and advertise our brand in areas that do not offer contemporary trade stores and e-commerce penetration is minimal.”
- Kaushik Mukherjee, co-founder & COO, SUGAR [13]
The geographic spread of D2C success reflects a broader democratization of commerce in India. Over 60% of new D2C consumers now come from Tier-II and Tier-III cities, thanks to better digital infrastructure and logistics.
To tap into these markets, companies are adopting sophisticated regional strategies. This includes creating localized marketing campaigns, producing content in regional languages, and collaborating with local influencers to build trust. These efforts acknowledge that India’s diversity demands a tailored approach, taking into account the unique preferences and shopping behaviors of each region.
B2B Companies Supporting D2C Brands
The growth of direct-to-consumer (D2C) brands is being fueled by B2B service providers that enable these businesses to scale efficiently. With the D2C market in India projected to reach a valuation of ₹4,50,000 crore by 2027, the role of B2B enablers is more critical than ever. Parallel to this, the Indian SaaS market is expected to exceed $70 billion by 2030, and the e-commerce logistics sector is estimated to grow from ₹33,000 crore in 2025 to ₹58,500 crore by 2030 [14]. This simultaneous expansion highlights the interdependence between D2C brands and their B2B partners.
These B2B providers form the backbone of the technology, logistics, and financial systems that allow D2C brands to thrive.
Software Solutions: The Backbone of Scalable D2C Growth
Technology platforms are indispensable for managing the complexities of multichannel operations. SaaS solutions simplify processes like inventory tracking and customer analytics, enabling brands to focus on scaling their businesses.
Take Unicommerce, for example. This platform processes 20-25% of dropshipping orders in India and supports over 260 integrations, including marketplaces, webstores, logistics providers, and POS/ERP systems. Impressively, more than 30 brands featured on Shark Tank India rely on Unicommerce to streamline their operations [15].
These SaaS platforms offer multi-channel integration, consolidating marketplaces, logistics, and enterprise systems into a single dashboard. This helps brands manage orders, inventory, and customer data with ease, even as they scale rapidly. Shopify, for instance, powers over 99,000 live stores in India as of 2025 [16], showcasing the extensive reliance on robust software ecosystems. In another case, a 2024 D2C brand reduced its return time by 50% within two weeks by optimizing its backend operations using retail tech SaaS [17].
As D2C brands expand into omnichannel operations, including offline retail, integrated software systems become even more essential for avoiding operational bottlenecks.
To help brands navigate the technology landscape, D2CStory tracks the software stack of over 1300+ Indian D2C brands. You can explore the full list on our Ecommerce Tools page.
Here are the top 8 most adopted tools across our tracked brands:
| Tool | Category | Used By |
|---|---|---|
| Shopify | Ecommerce | 1159 brands |
| Microsoft Clarity | Analytics | 493 brands |
| Judge.me Product Reviews | Reviews | 426 brands |
| GoKwik | Miscellaneous | 299 brands |
| PayPal | Payment Processors | 190 brands |
| Shopflo | Payment Processors | 137 brands |
| Snowplow | Analytics | 132 brands |
| Razorpay | Payment Processors | 130 brands |
Shipping and Order Fulfillment: Bridging the Logistics Gap
For D2C brands, especially those targeting Tier-II and Tier-III cities, having a strong logistics framework is key. The challenge isn’t just about moving packages but creating cost-effective, reliable networks that can navigate India’s diverse geography.
Ekart has established an extensive logistics network covering over 15,000 pin codes and offers Grade A warehousing facilities in more than 20 Tier I and Tier II cities. This strategic distribution allows brands to store products closer to their customers, improving delivery efficiency. Brands using Ekart’s services have reported a 30% improvement in second-day deliveries, a 40% increase in zonal coverage, and up to a 10% reduction in logistics costs [18]. These improvements directly impact customer satisfaction and retention.
AI-powered predictive analytics further enhance delivery accuracy and warehouse operations, allowing brands to tap into new markets without building logistics capabilities from scratch. With the rise of quick commerce, there’s growing demand for warehousing in smaller cities. Interestingly, India is set to become one of the top six users of warehouse automation systems globally by 2026, with the market expected to reach $2 billion annually.
“Our reliability has earned the trust of major brands. We are recognized for our responsiveness and swift issue resolution, proactively engaging with customers. Our mantra - Reliability, Response, and Resolution - keeps us highly customer-focused.”
- Mani Bhushan, Chief Business Officer, Ekart [18]
Efficient logistics solutions also address issues like inaccurate addresses, infrastructure challenges, and delivery delays, which are common in Tier-II and Tier-III cities. Considering that over 60% of new D2C consumers come from these regions, modern fulfillment providers now offer integrated solutions covering inventory management, returns processing, and customer communication to ensure smooth scaling.
Financial Services: Fueling D2C Growth
Access to capital and seamless payment processing have historically been challenging for D2C brands. However, fintech companies are stepping in with tailored solutions to meet these needs.
India’s fintech sector, with a market value of approximately $120 billion and an adoption rate of 87% - well above the global average of 64% - is empowering D2C brands with advanced financial tools.
Payment infrastructure forms the foundation of D2C operations. Razorpay, for instance, provides multi-payment gateways supporting UPI and card payments.
Flexible financial solutions are becoming increasingly common. MobiKwik, with its digital wallets and buy-now-pay-later services, helps boost conversion rates and average order values. CredAble, India’s largest working capital software platform, supports businesses ranging from MSMEs to large corporates. This kind of flexible capital access is crucial for brands dealing with seasonal demands or rapid growth.
Cashfree Payments is another key player, offering services like payment collections, vendor payouts, wage disbursements, quick loan disbursements, e-commerce refunds, and more. The trend of embedded finance - integrating these financial tools into platforms already used by D2C brands - reduces friction and simplifies capital access and financial management. In April 2025 alone, India’s fintech sector attracted $141 million in funding across 11 startups, with the Payments segment leading the way at $63 million, followed by Lending [19]. This investment reflects the growing sophistication and accessibility of financial services for D2C brands.
Conclusion: Indian D2C Market Opportunities
India’s direct-to-consumer (D2C) market is on a remarkable growth trajectory, with projections estimating it will reach a staggering ₹8,25,000 crore ($100 billion) by 2025. This growth signifies a transformative shift in how Indian consumers discover, evaluate, and purchase products.
Several factors are fueling this momentum. The country’s robust digital infrastructure is a key driver, enabling seamless online shopping experiences. Additionally, more than 60% of Indian consumers are now willing to pay extra for eco-friendly products. This evolving landscape underscores the growing demand for personalized shopping experiences and sustainable offerings.
Success stories like Wakefit highlight the potential in this space. Starting as a mattress company, Wakefit expanded into a complete home solutions brand by leveraging real-time data and focusing on customer needs. Such examples demonstrate the power of adaptability and customer-centric strategies.
To thrive in this dynamic market, forming effective B2B partnerships is essential. Service providers specializing in logistics, payment processing, and digital marketing play a crucial role in helping D2C brands scale efficiently and overcome operational hurdles.
As brands grow, sustainability and personalization remain at the forefront. Companies like Conscious Chemist and Bare Necessities are leading the charge with initiatives like biodegradable packaging and ethical sourcing. Embracing these practices not only aligns with consumer expectations but also sets up brands for long-term success.
“Sustainability, innovation, and personalized experiences are expected to be kingmakers for the D2C Brands in the coming years.” - Bala Sharda, Founder of VAHDAM [20]
Despite challenges like rising customer acquisition costs, which have increased by about 30% annually [5], brands focusing on personalized retention strategies and smarter discounting are better positioned to foster loyalty and sustain growth.
India’s D2C market is undergoing a profound transformation, growing from an estimated $12 billion in 2022 to a projected $60 billion by 2027. This evolution presents immense opportunities for brands that prioritize data-driven strategies and sustainable practices.
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FAQs
What is driving the rapid growth of India’s D2C market, and how are smaller cities playing a key role?
India’s D2C market is experiencing a surge, fueled by greater digital access, higher disposable incomes, and evolving consumer preferences. One of the key drivers of this growth is the rising influence of Tier-II and Tier-III cities, which are becoming pivotal for e-commerce and D2C brands.
These cities boast a young, tech-savvy population with growing spending power. Thanks to better internet connectivity and the convenience of online shopping, consumers in these areas are increasingly exploring and purchasing products across categories like fashion, beauty, and food. This trend presents a massive opportunity for D2C brands to broaden their reach and connect with a more varied customer base throughout India.
How are Indian D2C brands using technology and partnerships to grow efficiently?
Indian D2C brands are tapping into technology and building key partnerships to grow their businesses efficiently. They use advanced SaaS tools for managing customers, analyzing data, and automating marketing efforts. These tools help create personalized experiences and make operations smoother, ultimately improving how brands engage with their audience.
Teaming up with logistics providers like Shiprocket and Delhivery is another smart move. These collaborations ensure quick and affordable deliveries, which are essential to staying competitive. Coupled with innovations in supply chain management, these efforts enable brands to reach customers in Tier-II and Tier-III cities, fueling growth in India’s ever-evolving e-commerce landscape.
Through a combination of technology and partnerships, Indian D2C brands are building a strong foundation that supports growth, improves customer experience, and opens doors to new opportunities.
What challenges do Indian D2C brands face, and how are they addressing issues like sustainability and high customer acquisition costs?
Indian D2C brands are grappling with two significant hurdles: the steep rise in customer acquisition costs (CAC) and the increasing emphasis on sustainability. With CAC climbing by 30-60% each year, businesses are rethinking their strategies to focus more on retaining existing customers. To achieve this, they’re turning to tools like CRM platforms, tailored shopping experiences, and loyalty programs. These approaches not only encourage repeat purchases but also reduce reliance on constantly acquiring new customers.
On the sustainability front, brands are making notable changes. Many are streamlining their supply chains, switching to eco-friendly packaging, and embracing shared logistics solutions. These efforts not only lessen their environmental footprint but also help cut operational expenses and foster deeper customer trust. By blending retention-focused strategies with sustainable practices, Indian D2C brands are finding ways to tackle these challenges head-on while staying competitive in a crowded market.